The Robot Revolution In Warehouses Could Be On The Cusp Of Exploding

New breakthroughs in robotics could hasten the arrival of automated distribution centers faster than was previously thought possible.

In 2018, about 4,000 robotic warehouses were in operation around the globe, but by 2025, that number could spike as high as 50,000, according to a report by ABI Research. That would equate to about 4 million robots, the technology research firm wrote in a summary released on Tuesday.

Spurring the leap forward are advancements in multiple directions — improved artificial intelligence that allows for more efficient picking and packing, smaller and more flexible robots that don't require purpose-built infrastructure — that add up to a significant reduction in the price of adoption.

A report last year from Green Street Advisors estimated that automated warehouses cost as much as 20 times more to build than traditional ones, restricting access to only the most deep-pocketed players. With the impending advent of robotics-as-a-service from startups like Geek+, Fetch and Invia, warehouse users can implement automation at a scale that not only makes sense for them, but can be changed as demands change. 

“By lowering the barriers to adoption for robots in the warehouse, vendors are disrupting the wider logistics value chain,” ABI Senior Analyst Nick Finill said in the firm's press release. “If advanced automation becomes possible for mid-size e-retailers, they will be able to fight back against the dominant players and also bring fulfillment operations back in-house, disrupting the relationship between retailers and [third-party logistics operators].” 

The difference is not dissimilar to how flexible workspaces and coworking have been disrupting the office marketplace over the past decades. E-commerce would be especially benefited by flexibility in output and production due to the seasonal nature of retail.

Rather than hiring surges as the holiday season arrives, which are already straining a tight labor market, operators could simply bring in robotic reinforcements. While the report did not specify when widespread adoption would likely begin, it could have a seismic impact whenever it happens.