The “Robotics as a Service” model provides users with autonomous bots for a monthly subscription fee, allowing them to swiftly scale up their operations for peak season.
Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
The first snowflakes of the season are falling in many parts of the country, which means that warehouse operators and parcel carriers alike are hiring tens of thousands of temporary workers to cope with the demands of the peak holiday shopping season.
That task is proving harder in 2019 than in past years, as record-low unemployment rates are making it hard to hire enough workers to fully staff fulfillment centers. That's forcing employers to brace for a blizzard of overtime bills and to crank up the thermostat on an already hot job market by raising wages.
However, providers of warehouse robots say there's a better solution. Many robot vendors are now renting or leasing robots to their customers on a short-term basis, allowing DCs to ramp up their operations during peak periods and then scale back once the activity dies down.
There are several variations on the approach, but the most common is called "Robotics as a Service," or RaaS. These services are usually offered on a subscription basis, with customers paying monthly fees instead of buying their robots outright. In exchange, vendors deliver autonomous mobile robots (AMRs) and then provide tech support as well as regular updates to the hardware and software that enable them to navigate DCs.
BOTS KEEP THEIR HEADS IN THE CLOUD
Companies that choose the RaaS option are typically logistics or retail operations that are already using bots in their warehouses but need additional support during peak periods or in times of severe labor shortages, according to 6 River Systems Inc., a Waltham, Massachusetts-based warehouse robotics startup that offers its "Chuck" series of AMRs on an RaaS basis.
For operations with existing robot fleets, commissioning additional units is a simple matter, vendors say. Once a warehouse technician switches them on, the newly arrived robots connect to a DC's wireless network and link to critical information like an inventory floor map, the location of electrical outlets for recharging, and an interface with the building's warehouse management software (WMS).
The robots access that data but never download it from the cloud, so the only information physically stored on a robot is its own navigation software and collision-avoidance system, says Melonee Wise, CEO of Fetch Robotics, a San Jose, California-based AMR vendor that offers RaaS plans. If a vendor swaps out an older robot for a new one, it resets its onboard computer, ensuring that sensitive information on sales and customers never leaves the building, she says.
That approach makes it easy to add more robots to a fleet because every robot shares the same knowledge base, Wise says. In fact, warehouse managers often find the technical setup process to be easier than training their human employees to work with the new equipment, she adds.
"You have to have your workers be ready to interact with the new robots," Wise says. In past years, workers were sometimes afraid the robots would take their jobs, but the latest generation of workers is more likely to see robots as collaborative tools to help boost productivity. "The fear is no longer losing their job, but being competent enough to work with the robot," Wise said during a recent panel discussion on supply chain technology during the MHI Annual Conference in La Quinta, California. "So if you can disarm that as soon as possible, they transition to embracing their robot co-worker. And then they go from fear to curiosity."
ROBOTS ON THE RISE
Thanks to its rising popularity, the RaaS approach is helping to accelerate the adoption of robots in the logistics industry, reports Karen Leavitt, chief marketing officer at Locus Robotics, a Wilmington, Massachusetts-based AMR vendor that offers RaaS plans.
"[RaaS] is terrific for customers because it provides them with a low threshold to entry; you don't have to write a check for $1 million, just $10,000 a month," Leavitt says. For customers, it's a low-risk proposition because the pay-as-you-go service is considered an "operational expense" in accounting terms, as opposed to a purchase-based "capital expense."
"If it were a cap-ex purchase and then you have second thoughts, you've already bought it and it basically becomes a large paperweight in your facility," Leavitt says.
In addition to flexibility, RaaS plans offer users many of the same advantages as the popular Software-as-a-Service (SaaS) subscription-based software offerings, Leavitt notes. "So, like with SaaS, [you can] rely on the fact that you're going to have quarterly updates to the software. And you share a long-term business relationship," she adds.
According to Locus, that relationship is critical to helping warehouse operations deal with one of the most pressing challenges of the era—the labor shortage. "The macro problem we're addressing is labor availability and effectiveness," Leavitt says. "Because labor is unavailable, wage rates have been going up. So this allows [warehouses and fulfillment centers] to get the same amount of work done with half the labor."
Across the industry, warehouse automation vendors—including major players like Vecna Robotics, Mobile Industrial Robots (MiR), and InVia Robotics—are increasingly offering their robots on an RaaS basis, helping to bring bots into DCs of all sizes. By making those robots easy to "hire," simple to "train," and inexpensive to "rent," robotics-as-a-service has become a crucial tool for helping warehouse operators avoid getting snowed in by a blizzard of orders during the winter holiday rush.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.