Interest in lithium-ion batteries for material handling equipment is growing. Will they be limited to niche applications, or could they eventually replace lead-acid batteries?
Contributing Editor Toby Gooley is a writer and editor specializing in supply chain, logistics, and material handling, and a lecturer at MIT's Center for Transportation & Logistics. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
The first lithium-ion battery-powered lift truck made its debut in Japan in 2008. Pallet jacks and automated guided vehicles (AGVs) powered by lithium-ion batteries have been scooting around European DCs for a few years now. But here in North America, we're a little late to the party. Interest in lithium-ion batteries and battery management systems may be high, but sales remain slow.
Proponents of this energy-dense, highly efficient power source say that's about to change. For the past couple of years, manufacturers and designers of batteries, chargers, and lift trucks have been testing lithium-ion (li-ion, for short) batteries, and some are now commercially available here. While it's generally agreed that li-ion batteries are very promising for material handling applications, how much of the market they'll eventually capture is far from certain.
KUDOS ...
One reason for the growing interest in li-ion batteries is that they have a very high energy density—about triple the capacity of a similar lead-acid battery, says Arlan Purdy, product manager of energy storage systems for lift truck manufacturer The Raymond Corp. They're also attractive because they do not require any watering and give off no gases, he says. And, unlike some other alternative power sources, he adds, lithium-ion batteries "have a little bit of a convenience factor because they use the same electric grid that people are used to"; in other words, the charging process will already be familiar to operators. Lithium-ion batteries are much smaller and lighter than their lead-acid counterparts—perhaps lithium-ion's greatest appeal, notes Mark Tomaszewski, manager, emerging technologies, for the battery maker EnerSys.
In addition, li-ion batteries can be opportunity-charged during operator breaks without adversely affecting battery life, have much longer run times than their lead-acid counterparts, and can be charged quickly, says Steve Dues, vice president at lift truck maker Crown Equipment Corp. That means there is no need to swap out batteries during a shift—or to remove a battery at all, even in a 24/7 operation.
How fast can li-ion batteries be charged? Much depends on the particular cHemiätry of the material inside, but Trineuron, a Belgian supplier of batteries for AGVs, among other applications, claims that the nano lithium-titanate-oxide technology it has adapted from the energy-storage and automotive markets allows for a full recharge in less than nine minutes, and that total time on charge for AGVs with any type of li-ion battery typically is less than one hour a day. On its website, the company cites the example of a Belgian food distributor that put 30 Jungheinrich AGVs with li-ion batteries to work in a new warehouse and projects savings of 1 million euros (approximately US$1.1 million) due to shorter charging times and lower electricity costs.
Food and beverage distributors as well as grocery industry players are particularly interested in li-ion batteries because they maintain their capacity in cold temperatures better than conventional lead-acid batteries do, says Purdy. The Raymond Corp. currently is partnering with the New York State Energy Research and Development Authority (NYSERDA) to test lithium-ion batteries in a cold storage environment. They have performed well so far, but more research is required, he says.
... AND CONCERNS
All this may sound too good to be true. There must be a catch, right? Indeed there is—there are several, in fact.
One concern is that as demand for mobile devices and electric and hybrid vehicles increases, there could be more competition for the batteries' raw material. Lithium is recovered from brine in saline lakes and flats or extracted from hard rock using open-pit or underground mining methods. The main producing areas are Chile, Argentina, Australia, China, and Zimbabwe, and to a lesser extent, Nevada. There's no immediate danger of a shortage, but any time a market becomes dependent on a material that originates in a limited number of remote areas, there's reason for caution.
Once extracted, the lithium is combined with various minerals and chemicals to create the material used in batteries. Which "recipe" is used depends on the battery application. That has an impact on safety, a major consideration for battery users. Everyone's heard about overheated or damaged laptop and cell phone batteries bursting into flames or exploding, a phenomenon known as "thermal runaway." But lift truck batteries are different from the ones used in consumer electronics, and reputable battery manufacturers and assemblers are diligent about the safety of their products. For example, Flux Power, a Vista, Calif.-based provider of li-ion battery packs, has said that the lithium iron phosphate it uses is not prone to thermal runaway, and that its battery management system will shut down the battery pack if the sensors in any individual cell detect temperatures outside a prescribed range. Similarly, Chicago-based AllCell Technologies incorporates a proprietary passive thermal management system into its battery packs. That system uses a graphite composite material to surround individual lithium-ion cells, physically isolating them and absorbing and conducting heat away from them to prevent fire or damage.
In fact, an appropriately designed battery management system is a necessity when lithium ion is involved. In a discussion about safety on its website, Denmark's Lithium Balance says that li-ion batteries do not tolerate overcharging and that safe operation requires constant monitoring to protect the battery pack from excessive current flow, as well as a switching circuit to connect and disconnect the battery from the electrical load. A battery management system should provide these controls, it says.
Because lithium-ion batteries have a sharp "shut-off," operators won't see the performance decline they experience with lead-acid batteries, says Raymond's Purdy. They'll need the kind of alerts that control systems on lithium-ion batteries in consumer applications provide, but lift trucks designed for traditional batteries "are not set up to listen to that kind of communication," he observes. Raymond is devoting considerable resources to developing and testing the communication interface between the truck and li-ion batteries, with the hope that it will become a public standard, he says. Another potential drawback of li-ion batteries when used in industrial lift trucks is the significant difference in weight between lithium-ion units and their lead-acid counterparts. While lightness can be an advantage at times—such as in the automotive industry—many lift trucks depend on heavy lead-acid batteries to counterbalance load and operator weights, says Tomaszewski of EnerSys. If the manufacturer has to add a heavy weight to the truck in addition to the li-ion battery and its compartment, it "could potentially compromise the economics of truck design and manufacturing," he says. For that reason, lithium-ion batteries have largely been relegated to pallet trucks and AGVs. Lithium-ion batteries also come with a hefty price tag, the single biggest factor holding back the adoption of lithium-ion in material handling applications. An often-quoted 2013 report by Navigant Research estimated that li-ion batteries cost around $400 to $700 per kilowatt-hour, compared with $150 to $400/kwh for lead-acid batteries. Prices fluctuate, but currently, price differentials are "in the range of four to five times the cost of lead-acid when calculated on a watt-per-hour basis," estimates Steve Dues of Crown. Proponents, however, counter that li-ion actually compares quite favorably on total lifetime cost, owing to its energy density, maintenance-free characteristics, low electricity requirements, high productivity, and a lifespan that's three to five times that of comparable lead-acid batteries.
Regardless of the potential benefits, lithium-ion will go nowhere unless the lift truck and AGV manufacturers approve their use in individual vehicle models sold in specific markets. That's a process that is necessarily rigorous and time-consuming because both customer safety and product integrity are at stake. Toyota, for instance, offers several lithium-ion battery products in Europe but has approved just one in North America. Scott Carlin, electric product planning and product support manager for Toyota Material Handling, U.S.A. Inc., says his company is "working to verify that the suppliers and their products meet safety standards and testing protocols" for equipment sold here.
GAINING CONVERTS
Navigant Research's 2013 report forecasts that revenues from the sale of new electric-power technologies for forklifts in North America, including certain types of fuel cells, fast chargers, and li-ion batteries, will grow to $556 million in 2020 from $121 million in 2013. Lithium-ion is expected to make up just a sliver of that total market, perhaps 4 percent. Still, evidence abounds that equipment makers and their customers see a future in this technology. Here are a few examples:
Yale Materials Handling Corp. now offers a walkie pallet truck with the first commercially available li-ion battery pack recognized by Underwriters Laboratory (UL) in the forklift industry. The lighter, smaller battery allows for a shorter, more maneuverable truck and is backed by a five-year warranty.
Flux Power introduced a beta version of its 500Ahe LiFT Pack battery for end-rider pallet jacks at the 2015 ProMat show. The company says Toyota and Crown Equipment have approved its battery packs for use in certain pallet jack models and that it has lined up battery distributors and forklift dealers to sell its products. The publicly traded company reports growing quarterly sales but is still in the red.
Earlier this year, the snack maker Mondelez bought li-ion batteries and battery management systems from Electrovaya for its Toronto DC, and the Norwegian wholesaler Europris reported that in a six-month trial, batteries from GNB Industrial Power "significantly" lowered its forklift fleet operating costs.
A growing number of vendors, including Storage Battery Systems (SBS) and GS Yuasa, have added li-ion batteries for AGVs to their product lineups.
Applied Energy Solutions reports that several major retailers are testing its Superion lithium-ion battery and charger pack, which has won two MHI innovation awards.
When asked where the market for lithium-ion batteries will be five years from now, the experts we consulted for this article were cautious in their assessments.
Purdy believes considerably more research and testing will be required to ensure that the batteries—both current and future designs—are properly matched to specific lift truck applications. But if prices come down, he expects that within five years, sales will be "at least equal to fuel cells."
Tomaszewski, meanwhile, says EnerSys sees possibilities in lithium-ion, but right now the company is using it in nonmotive applications only. "Until the cost comes down, we will consider it to be an emerging technology," he says.
In Carlin's opinion, the fact that forklift manufacturers are hiring employees specifically to support lithium-ion and other new technologies suggests that they believe acceptance will grow. "I would expect that over the next five years, testing will continue, and as people become more confident in the overall benefits of the newer technologies, lithium-ion will be embraced as a major alternative to lead-acid," he says.
Steve Dues of Crown agrees that alternative power sources will gain market share as they prove they can solve customers' problems at a competitive cost. But don't count lead-acid batteries out just yet, he says. The hybridization of lead-acid with other technologies like super capacitors, together with improved battery management solutions, could deliver meaningful power and efficiency gains. Lithium-ion may be getting some well-deserved attention, but solutions involving traditional lead-acid batteries, he predicts, "are what will be applicable to the significant majority of the forklift market."
Each of those points could have a stark impact on business operations, the firm said. First, supply chain restrictions will continue to drive up costs, following examples like European tariffs on Chinese autos and the U.S. plan to prevent Chinese software and hardware from entering cars in America.
Second, reputational risk will peak due to increased corporate transparency and due diligence laws, such as Germany’s Supply Chain Due Diligence Act that addresses hotpoint issues like modern slavery, forced labor, human trafficking, and environmental damage. In an age when polarized public opinion is combined with ever-present social media, doing business with a supplier whom a lot of your customers view negatively will be hard to navigate.
And third, advances in data, technology, and supplier risk assessments will enable executives to measure the impact of disruptions more effectively. Those calculations can help organizations determine whether their risk mitigation strategies represent value for money when compared to the potential revenues losses in the event of a supply chain disruption.
“Looking past the holidays, retailers will need to prepare for the typical challenges posed by seasonal slowdown in consumer demand. This year, however, there will be much less of a lull, as U.S. companies are accelerating some purchases that could potentially be impacted by a new wave of tariffs on U.S. imports,” Andrei Quinn-Barabanov, Senior Director – Supplier Risk Management Solutions at Moody’s, said in a release. “Tariffs, sanctions and other supply chain restrictions will likely be top of the 2025 agenda for procurement executives.”
As holiday shoppers blitz through the final weeks of the winter peak shopping season, a survey from the postal and shipping solutions provider Stamps.com shows that 40% of U.S. consumers are unaware of holiday shipping deadlines, leaving them at risk of running into last-minute scrambles, higher shipping costs, and packages arriving late.
The survey also found a generational difference in holiday shipping deadline awareness, with 53% of Baby Boomers unaware of these cut-off dates, compared to just 32% of Millennials. Millennials are also more likely to prioritize guaranteed delivery, with 68% citing it as a key factor when choosing a shipping option this holiday season.
Of those surveyed, 66% have experienced holiday shipping delays, with Gen Z reporting the highest rate of delays at 73%, compared to 49% of Baby Boomers. That statistical spread highlights a conclusion that younger generations are less tolerant of delays and prioritize fast and efficient shipping, researchers said. The data came from a study of 1,000 U.S. consumers conducted in October 2024 to understand their shopping habits and preferences.
As they cope with that tight shipping window, a huge 83% of surveyed consumers are willing to pay extra for faster shipping to avoid the prospect of a late-arriving gift. This trend is especially strong among Gen Z, with 56% willing to pay up, compared to just 27% of Baby Boomers.
“As the holiday season approaches, it’s crucial for consumers to be prepared and aware of shipping deadlines to ensure their gifts arrive on time,” Nick Spitzman, General Manager of Stamps.com, said in a release. ”Our survey highlights the significant portion of consumers who are unaware of these deadlines, particularly older generations. It’s essential for retailers and shipping carriers to provide clear and timely information about shipping deadlines to help consumers avoid last-minute stress and disappointment.”
For best results, Stamps.com advises consumers to begin holiday shopping early and familiarize themselves with shipping deadlines across carriers. That is especially true with Thanksgiving falling later this year, meaning the holiday season is shorter and planning ahead is even more essential.
According to Stamps.com, key shipping deadlines include:
December 13, 2024: Last day for FedEx Ground Economy
December 18, 2024: Last day for USPS Ground Advantage and First-Class Mail
December 19, 2024: Last day for UPS 3 Day Select and USPS Priority Mail
December 20, 2024: Last day for UPS 2nd Day Air
December 21, 2024: Last day for USPS Priority Mail Express
Measured over the entire year of 2024, retailers estimate that 16.9% of their annual sales will be returned. But that total figure includes a spike of returns during the holidays; a separate NRF study found that for the 2024 winter holidays, retailers expect their return rate to be 17% higher, on average, than their annual return rate.
Despite the cost of handling that massive reverse logistics task, retailers grin and bear it because product returns are so tightly integrated with brand loyalty, offering companies an additional touchpoint to provide a positive interaction with their customers, NRF Vice President of Industry and Consumer Insights Katherine Cullen said in a release. According to NRF’s research, 76% of consumers consider free returns a key factor in deciding where to shop, and 67% say a negative return experience would discourage them from shopping with a retailer again. And 84% of consumers report being more likely to shop with a retailer that offers no box/no label returns and immediate refunds.
So in response to consumer demand, retailers continue to enhance the return experience for customers. More than two-thirds of retailers surveyed (68%) say they are prioritizing upgrading their returns capabilities within the next six months. In addition, improving the returns experience and reducing the return rate are viewed as two of the most important elements for businesses in achieving their 2025 goals.
However, retailers also must balance meeting consumer demand for seamless returns against rising costs. Fraudulent and abusive returns practices create both logistical and financial challenges for retailers. A majority (93%) of retailers said retail fraud and other exploitive behavior is a significant issue for their business. In terms of abuse, bracketing – purchasing multiple items with the intent to return some – has seen growth among younger consumers, with 51% of Gen Z consumers indicating they engage in this practice.
“Return policies are no longer just a post-purchase consideration – they’re shaping how younger generations shop from the start,” David Sobie, co-founder and CEO of Happy Returns, said in a release. “With behaviors like bracketing and rising return rates putting strain on traditional systems, retailers need to rethink reverse logistics. Solutions like no box/no label returns with item verification enable immediate refunds, meeting customer expectations for convenience while increasing accuracy, reducing fraud and helping to protect profitability in a competitive market.”
The research came from two complementary surveys conducted this fall, allowing NRF and Happy Returns to compare perspectives from both sides. They included one that gathered responses from 2,007 consumers who had returned at least one online purchase within the past year, and another from 249 e-commerce and finance professionals from large U.S. retailers.
The “series A” round was led by Andreessen Horowitz (a16z), with participation from Y Combinator and strategic industry investors, including RyderVentures. It follows an earlier, previously undisclosed, pre-seed round raised 1.5 years ago, that was backed by Array Ventures and other angel investors.
“Our mission is to redefine the economics of the freight industry by harnessing the power of agentic AI,ˮ Pablo Palafox, HappyRobotʼs co-founder and CEO, said in a release. “This funding will enable us to accelerate product development, expand and support our customer base, and ultimately transform how logistics businesses operate.ˮ
According to the firm, its conversational AI platform uses agentic AI—a term for systems that can autonomously make decisions and take actions to achieve specific goals—to simplify logistics operations. HappyRobot says its tech can automate tasks like inbound and outbound calls, carrier negotiations, and data capture, thus enabling brokers to enhance efficiency and capacity, improve margins, and free up human agents to focus on higher-value activities.
“Today, the logistics industry underpinning our global economy is stretched,” Anish Acharya, general partner at a16z, said. “As a key part of the ecosystem, even small to midsize freight brokers can make and receive hundreds, if not thousands, of calls per day – and hiring for this job is increasingly difficult. By providing customers with autonomous decision making, HappyRobotʼs agentic AI platform helps these brokers operate more reliably and efficiently.ˮ
RJW Logistics Group, a logistics solutions provider (LSP) for consumer packaged goods (CPG) brands, has received a “strategic investment” from Boston-based private equity firm Berkshire partners, and now plans to drive future innovations and expand its geographic reach, the Woodridge, Illinois-based company said Tuesday.
Terms of the deal were not disclosed, but the company said that CEO Kevin Williamson and other members of RJW management will continue to be “significant investors” in the company, while private equity firm Mason Wells, which invested in RJW in 2019, will maintain a minority investment position.
RJW is an asset-based transportation, logistics, and warehousing provider, operating more than 7.3 million square feet of consolidation warehouse space in the transportation hubs of Chicago and Dallas and employing 1,900 people. RJW says it partners with over 850 CPG brands and delivers to more than 180 retailers nationwide. According to the company, its retail logistics solutions save cost, improve visibility, and achieve industry-leading On-Time, In-Full (OTIF) performance. Those improvements drive increased in-stock rates and sales, benefiting both CPG brands and their retailer partners, the firm says.