If a Terminator-esque rise of the robots is likely to originate somewhere, warehouses are the first place we’d look. With eCommerce growing constantly, modern technologies will transform warehouse automation trends. The same continues for organizations seeking the best warehouse management software.

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In fact, the fourth industrial revolution will be the most apparent in the logistics and supply chain industries. With warehouses at the heart of supply chains, they look drastically different than how they used to a decade ago. As warehouse industry trends point at a growing client base and increasing demand for rapid shipping, warehouse automation is gaining steam.

This Article Covers:

• Top Warehouse Automation Trends
  • Rise of the Robots
  • Modular and Plug-and-Play Solutions
  • The Internet of Things
  • Labor Shortage
  • RFID Tagging
  • Connected Logistics
  • Wireless Fleet Management
• Warehouse Technology Trends
  • Blockchain
  • Automatic Storage and Retrieval Systems (ASRS)
  • Cloud-Based Software
  • Packing
  • Gamification
• Key Drivers of Growth
• Benefits
• Implications
• Next Steps

Key Takeaways

• The mobile robots market is expected to reach over $334 billion between 2032 and 2042.
• The global IoT in warehouse management market is estimated to grow from $12.13 billion in 2023 to $27.79 billion by 2030.
• The rising warehouse labor costs will impact the warehouse automation industry in 2024.
• Cloud-based warehouse management solutions are forecasted to grow at a higher CAGR than on-premise software.
• Gamifying tasks like picking up goods and scanning inventory can improve the recruitment process for younger millennial employees.

Top Trends for 2024

The warehouse automation market is fragmented, with various verticals looking to invest in robotics, IIoT, AI and machine learning systems. It’s a highly competitive market with a small group of dominant players. Although the U.S. remains a substantial market, Europe and the Asia Pacific are experiencing considerable growth in warehouse automation adoption.

Let’s look at some major warehouse automation trends.

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1. Rise of the Robots

With increasing capability and configurability, robots are taking more significant roles in warehouses. We expect to see the market for mobile robots rise by over $334 billion between 2032 and 2042. Robots cover their costs in just three to nine months, enabling small and mid-sized businesses to adopt them even on smaller budgets.

Warehouses use robots for a wide range of tasks, such as sorting, picking, packaging, batching, transportation, fulfillment, security and inspection.

Amazon leads the way in robot-driven warehouses, with over 200,000 mobile robots implemented in its facilities. DHL also pledged to deploy over 5000 robots in its warehouses across the globe and expand its fulfillment automation agreement with Locus Robotics.

According to Fortune Business Insights, the global industrial robot market size is expected to increase from $18.19 billion in 2023 to $41.02 billion by 2030, registering a CAGR of 12.3%.

Mobile Robots: AGV/AMR

Automated guided vehicles (AGV) and automated mobile robots (AMRs) are rising warehouse automation stars. They are scalable and don’t require variations to the warehouse’s existing floor plan and infrastructure, as opposed to automated storage and retrieval systems (AS/RS), which require the installation of extensive infrastructure.

AGVs and AMRs are trainable to perform multiple operations with various designs. Affordable and requiring very little training to handle, these make for attractive investments. The global AGV/AMR market size is expected to reach over $20 billion by 2028. These mobile robots will soon be the new normal in operational activities, demonstrating a growth rate of 24% and 43% for AMRs and AGVs, respectively.

This category is moving toward “lights out” automation, navigating leveraging lasers and sensors or moving using route optimization algorithms. Key navigation trends include LiDAR, vision camera and sensor fusion, higher flexibility, better accuracy and logistics hazard sensing.

Recent warehouse automation trends include retrofitting traditional forklifts to enable automation during peak seasons, when peak efficiency is required, and using them manually when demands are back to normal. Other examples are mass Kiva Robots used in Amazon warehouses or similar autonomous swarm robots able to relocate loaded shelves.

AGVs are typically used for transportation, handling tasks that manual forklifts, conveyors, towing machines and carts typically conduct. AMRs are more flexible and take over moving, picking or sorting tasks. Picking systems include robots that leverage expandable arms and sensors to perceive item shapes. Some AMRs, like Magazino’s TORU cubes, are capable of both picking and moving goods.

Also discussed in the industry are extremely flexible articulated robots, which can handle sophisticated construction and assembling tasks. Stretch, a box-moving robot created by Boston Dynamics, can shift over 800 boxes an hour.

The global mobile robotics market exhibits a competitive landscape with plenty of growth opportunities. According to this report, North America, Europe, Asia Pacific and LAMEA will witness significant market growth.

Inkwood Research predicts that Asia Pacific will lead the AGV market, generating $2,201.20 million by 2032. Emerging economies like India and China are witnessing a substantial deployment of autonomous vehicles. Locations like those mentioned above possess an economic advantage due to lower labor costs and high demand.

Generative AI

Generative AI in warehouse automation uses AI-powered systems to create, analyze and generate data for logistics optimization. It offers capabilities such as risk management, demand forecasting, customer service automation, warehouse layout designing, inventory management and route optimization.

With advanced modules like predictive analytics, generative AI is predicted to be the next big thing in the supply chain and warehouse industry landscape. According to a report by Bloomberg Intelligence, the generative AI market is estimated to reach $1.3 trillion by 2032. We expect to see the effect of this exponential growth in the warehouse automation market as well.

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Mobile Robots Replacing Conveyors

Although conveyors are still more common for goods transportation in warehouses, their growth will slow down, making way for smaller, cheaper, plug-and-play solutions. As companies strive for space-effective automation, smaller mobile robots are now replacing massive warehouse systems.

Fetch robotics offers scalable mobile robots that require smaller footprints. Robots-as-a-Service (RaaS) offered by Fetch and other automation vendors are becoming a trend for smaller logistics companies. Businesses are increasingly interested in RaaS because they have a lower cost of entry compared to other traditional robotics systems.

Robots are expensive, and it might take years for companies to realize their ROI. RaaS allows businesses to scale and make decisions based on market conditions or client requirements.

Drones

Thanks to the explosion in robotics popularity, we could soon see fleets of drones flying around warehouses. Leveraging drones for shipping and delivery fulfillment came to attention when Amazon revealed their “Octocopter” in 2013.

Several challenges for indoor adoption, including navigation issues due to GPS unavailability, made the industry skeptical about leveraging drones for indoor operations. This idea recently gained traction, starting in 2015 and 2016 when giants like Amazon and Walmart announced drone adoption for their operations.

The increasing interest in drones is due to progress in regulation, improved hardware, software innovations and global competition bringing down prices. Recent advancements in hardware have increased battery life and stability. Since 2018, the trend has been to build software-led solutions that work with any hardware.

If you’re looking to invest in warehousing drones, keep these important factors in mind – safe navigation without GPS, accuracy in locating and identifying inventory, affordability and scalability.

The Structure from Motion (SfM) algorithm is another method for indoor drone navigation. Equipped with AI/ML capabilities, high-definition video and cloud connectivity, drones today can hover independently over obstacles, reach anywhere in the warehouse and operate in fleets.

Besides shipping and delivery, drones are useful in various operations, including scanning barcodes and RFID tagging, operating in hard-to-reach locations, cycle counting, gathering aerial inventory scans, inspection and retrieval. Third-party logistics companies are the early adopters of fully automated drones, followed by air cargo facilities. Key challenges in adoption are bandwidth issues and limited battery life.

The global logistics and transportation drone market is expected to grow at 10.8% CAGR and reach $12,180 million by 2028. This market impacts warehousing, shipping, infrastructure and software, with significant growth expected in shipping and warehousing segments. North America is forecasted to experience the highest growth in this period, owing to companies like Amazon, DHL and UPS.

Cobots

No, that isn’t a typo. Cobots are collaborative robots designed to work together with humans to complete tasks. Rather than replacing employees, cobots assist them in working more efficiently.

Currently, the cobots market size is worth $1.2 billion and is expected to reach $6.8 billion by 2029.

Cobots are also becoming ubiquitous in supply chain management due to affordability and ease of programming. These are designed for safety, with multiple sensors to work efficiently around humans. They are also easy-to-integrate, lightweight and flexible, ideal for warehouse usage in warehouses with space constraints.

According to a case study by DCL Logistics, cobots can significantly increase throughput and fulfillment processes by 500%. The most common warehouse cobots seek to eliminate unnecessary walking by providing transportation, while workers can focus on picking and other revenue-producing tasks. Cobots can increase warehouse efficiency by performing repetitive, undesirable tasks.

Some cobots are pallet jacks programmed to follow workers or wearables that enhance human labor. Locusbots by Locus Robotics and Chuck by 6 River Systems are among the most popular cobots on the market.

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2. Modular and Plug-and-Play Solutions

Determining future requirements is one of the biggest challenges eCommerce vendors face. This need makes system modularity an increasingly vital component to handle the under-or over-utilization of equipment. Many providers are coming up with scalable solutions that rewire as required.

Interroll’s Conveyor solution allows warehouse managers to redesign networks leveraging plug-and-play technology. Think of modular solutions in terms of Lego blocks, which can be assembled, deconstructed, relocated and rearranged as needed.

Plug-and-play solutions aren’t limited to conveyors and offer increased customization and integration to customers. A New Jersey-based fulfillment center for Adore Me recently adopted a plug-and-play solution integrated by Bastian Solutions that combines standard storage, picking and sorting systems to provide faster order consolidation in a space crunch.

DHL also plans to implement a plug-and-play solution built on Blue Yonder’s platform, offering increased flexibility when selecting and integrating different robots into a single solution. Similar integration-platform-as-a-service models enable customers to try out different options affordably.

3. The Internet of Things

The IoT isn’t just a trend. It’s a key technology driving current warehouse automation trends. IoT is revolutionizing the modern warehouse, connecting and coordinating all moving pieces of the warehouse puzzle.

Thanks to reduced costs and increased battery life of IoT sensors, the global IoT in warehouse management market is expected to grow from $12.13 billion in 2023 to $27.79 billion by 2030.

North America is currently the largest market, followed by Asia Pacific, Europe, Latin America and MEA.

So how is it reinventing the warehouse? The IoT allows you to connect, monitor and synchronize warehouse AGVs, AMRs, drones, beacons, pallets, equipment, inventory and even workers in real time, enabling different devices and systems to scan, store, share and retrieve data.

Beyond mere visibility, the IoT enables holistic performance and status tracking of all connected devices and inventory, and the number is likely to increase significantly over the next few years. For example, temperature sensors aid with cold storage monitoring and vibration sensors handle motor tracking.

Additionally, it reduces operating costs while enhancing performance. It also offers predictive maintenance and accurate forecasts to minimize risks and downtime. IoT ensures a smooth collaboration among all warehouse systems, leading to a better customer experience.

4. Labor Shortage

Last year was worrisome in terms of labor availability in the warehouse industry. Rising labor costs, lower customer demand and leftover industry have forced warehouse businesses to move toward greater automation.

However, the growing demand for flexible working might reverse the warehouse labor shortage trend. Employers can also fill their workforce gap by becoming more flexible to increase employee satisfaction.

Daniel Altman, chief economist at InstaWork, said:

More businesses are using flexible workers to fill shifts as staffing continues to be a challenge. The good news is that the improving performance of flexible workers is leading to higher rates of satisfaction.”

This changing landscape is set to impact warehouse automation trends in 2024 as companies decide between retaining their workforce alongside automation or prioritizing greater automation with workforce reductions.

5. RFID Tagging

RFID tags can store massive amounts of data, and integration with the IoT enables enhanced inventory management through 360° visibility and data extraction. RFID tagging allows enhanced data sharing and connectivity, opening the door to a smarter warehouse. Additional benefits include:

• Reliable tracking of inventory via automated data logging and collation.
• Real-time data access to identify operational inefficiencies and repetitive manual processes.
• Locating products quickly.

Active RFID tags make tracing easy in larger containers that travel long distances. The global RFID market is projected to grow from $15.8 billion in 2023 to $40.9 billion by 2032 at 11.1% CAGR.

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6. Connected Logistics

The IoT and AI analytics complement each other. Together, think of them as the Skynet of the warehouse world. With the IoT boosting warehouse data collection, there’s a lot of room for predictive analytics to improve warehouse productivity. IoT-enhanced devices feed terabytes of crucial data to useless systems without big data analytics leveraging these insights to make data-driven decisions.

The IoT is seeing more warehouse automation and analytics software usage to enhance logistics operations. Data collected by IoT-enabled devices tell these systems where all the moving parts are and their operations. It allows the AI-enabled system to analyze the best course of action.

6 River System’s “Chuck cobots are an example of this. Instead of each Chuck working separately, the system leverages analytics to assign and prioritize tasks to each of them, letting them work in unison and optimize efficiency.

Warehouse analytics software also supports enhanced inventory and workforce management. Launched in March 2019, “Uniformance,” a connected assets system by Honeywell Intelligrated, leverages the IoT and analytics to provide predictive models on historical trends. It can also predict the risk of failure and maintenance requirements. IoT sensors and analytics allow Pearson’s packaging systems to identify when machines will stop working.

Besides maintenance, predictive analytics can help identify market trends, pricing distortions, shipment delays, inventory demand, seasonal fluctuations and critical function optimization. As predictive analytics software keeps improving, warehouse executives are poised to be some of its early adopters.

IoT and analytics are the last components of an automated warehouse ecosystem. The future warehouse will be completely automated, and we can already see some of them in action. Trac360 by Bosch is a recent addition to end-to-end connected warehouse solutions.

Global giants like Amazon, Ocado, Alibaba, DHL and BMW are already reaping the benefits of IoT-enabled end-to-end automated warehouses. Given that, it’s not surprising to see huge predicted growth on the IoT front in coming years. The global IoT in logistics market is expected to reach $63,729 million by 2026, while the IoT in supply chain market is expected to reach $41.8 billion by 2033.

7. Wireless Fleet Management

Other applications witnessing increased IoT adoption are wireless fleet management solutions that leverage IoT sensors to monitor and manage vehicles in the warehouse. These systems assist with compliance, maintenance, monitoring driver performance and vehicle status. With this in mind, some of the benefits of using fleet management technology include:

• Reporting and analytics to help reduce costs.
• Real-time process monitoring and updates.
• Improving safety.
• Increasing customer satisfaction.

Vehicles equipped with wireless IoT tech enable these solutions to collect relevant data, including damage alerts, overheating risks and potential problem areas. It’s a bright future, especially consider the wireless fleet management market size is expected to reach $54.6 million by 2031, registering a 19.8% CAGR between 2023 and 2031.

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Warehouse Technology Trends

Other than the warehouse automation trends we discussed above, what other warehouse technology trends complete the automation puzzle?

1. Blockchain

Blockchain is a database that stores data in blocks to form a chain. Once a block adds to the chain, it is permanent and incorruptible. Blockchain security was initially used in cryptocurrency for accessibility and accountability. However, it’s now an emerging warehouse automation technology, seeing early adopters.

According to the MHI Annual Industry Report, 9% of the technology has the potential to disrupt the industry and create a significant competitive advantage gradually.

Reports forecast this to change rapidly. The global supply chain blockchain market is expected to register a CAGR of 51.3% by 2028, thanks to increasing warehouse automation, transparency and security demands.

Blockchain helps with warehouse management in the following ways:

• Enables predictive analytics to estimate accurate demand.
• Makes it impossible to falsify transactions.
• Enhances data authentication.
• Promotes collaboration and data sharing.
• Enables transparent inventory management data.
• Track shipment alerts and purchase patterns.

Partnered with IBM, Walmart achieved improved safety with blockchain technology, enabling them to forecast food scares. The global market remains competitive, with many looking to invest in delivering value for the cost. Blockchain will play a crucial role in the digitization and automation of the future warehouse.

2. Automatic Storage and Retrieval Systems (ASRS)

These modules help streamline inventory space and optimize flow using robotics and computer control systems. They can execute the actions without human intervention, boosting safety and productivity.

Modern technologies like AI and machine learning have positively impacted the ASRS market. It helps customize capabilities according to your unique business needs to offer optimal performance.

The global ASRS market is estimated to grow from $8.7 billion this year to $12.07 billion by 2028, with a CAGR of 7.9%.

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3. Cloud-Based Software

Cloud-based warehouse management systems require no infrastructure or in-house IT for maintenance and have become increasingly popular among logistics companies. These solutions are forecasted to grow at a higher CAGR than on-premise software as they provide:

• Increased automation potential.
• Ease of integration with other systems.
• Increased connectivity with IoT-enabled devices.
• Accurate inventory control.
• Rapid implementation.
• Centralized data accessibility.
• Unlimited computing power.

Even though they don’t directly relate to warehouse automation, cloud-based systems are among the driving technologies that enable enhanced warehouse automation.

4. Packing

Introducing automation and robotics in packing has been a game changer for warehouse operations. It has also improved documentation and tracking. If you want to automate your warehouse packing process, here are a few warehouse industry trends that you should consider:

• The 3D bin packing process helps optimize packing by automating weight measurement and box selection for your items. It also takes care of packaging and labeling.
• Ensuring proper documentation for every package is one of the most time-consuming order fulfillment processes. Documentation insertion modules can fully automate the process, saving time and resources.
• Robotic packing streamlines packing management by automatically picking, moving, labeling and sealing packages. The module consists of computers with robotic arms to execute these actions.

5. Gamification

Gamification is an innovative method to incentivize employees. It first gained traction through mobile apps and e-learning solutions.

It works by triggering dopamine, the neurotransmitter associated with reward and motivation. While most employees agree that gamification increases productivity, some say it increases engagement.

With dashboards and applications to implement it, gamification is an emerging trend in the industry. With workforce engagement shifting to new generations of employees, we’re likely to see these new arrivals make up most of the global workforce in the near future.

Boring and repetitive tasks such as picking up goods and scanning inventory items can be gamified. It can also improve the recruitment process for younger, millennial employees with considerable video game exposure. With increased warehouse automation, gamification of the warehouse can also boost robot-human interaction.

With its popularity and effectiveness, gamification will continue to thrive, according to market experts. The global gamification market is forecasted to grow at a CAGR of 29.15%, reaching $34,704 million by 2027.

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Key Drivers of Growth

The global warehouse automation market is estimated to grow at a 15% CAGR, reaching $44 billion by 2028. What are the factors fueling this growth?

Post-Pandemic Mobile Automation

During the pandemic, low interest rates and rising eCommerce sales led to rapid warehouse construction and a booming warehouse automation industry. However, increasing interest rates coincided with declining eCommerce sales post-pandemic, significantly slowing down construction and automation.

A report by Interact analysis, however, suggests that mobile automation is expected to increase by 38%, offering relief for the automation market despite the overall slowdown. The report also predicts that automation orders will increase towards the end of 2023 and continue in 2024.

According to the Warehouse Construction and Automation Spend report:

Warehouse automation orders will start to increase towards the end of this year, with growth continuing in 2024, pushing automation revenue growth back into double figures in 2025. The growth of warehouse automation order intake is tightly linked to the development of new greenfield warehouse sites, which are forecasted to rise in 2024, following a sharp decline in 2023.”

Interact Analysis also predicted that 26% of warehouses would be automated by 2027.

Ecommerce and Rapid Fulfillment

One of the warehouse automation market’s leading growth drivers is the retail eCommerce boom, moving away from brick-and-mortar shopping. Due to increased mobile use and internet penetration, a sharp rise in online shopping is occurring. According to Statista, global online retail sales are expected to exceed $7 trillion by 2025.

These paradigm shifts necessitate the adoption of modern fulfillment and shipping practices. While most customers prefer choosing e-vendors based on delivery options, some say speed is vital and are willing to pay for faster delivery. Rapid order fulfillment isn’t just an option anymore. With Amazon paving the way for faster shipping, meeting these demands falls entirely on warehouses.

As vendors tackle this challenge, investing in warehouse automation is necessary to attract and retain customers. Automated systems that can handle small to large individual orders, as opposed to bulk transportation models, are seeing more investment, shaping the warehouses of the future.

Robotic Picking

The order picking industry is expected to continue experimenting with robots. In fact, according to a report, the robot order picking market is predicted to reach $5.7 billion by 2028, up from just $0.67 billion in 2023. The key contributors to this humongous growth are rising labor costs and supply chain constraints.

Wage, Cost and Flexibility

Wage rate increases in regions such as Europe and North America reduced company profit margins. Labor costs account for most warehouses’ functioning budgets. Investing in warehouse automation to replace labor is cost-effective, with high ROI. Robots are independent of labor laws and don’t require insurance, benefits or holidays. Labor shortages during peak shipping season are another common warehousing issue.

Most fulfillment issues arise because of staff turnover. An automated warehouse can easily handle order spikes during peak holiday seasons, which manual warehouses barely match when managing erratic demand.

Technological Leaps

Another factor driving growth is rapid technological development regarding robotics mechanics, machine vision, AI and deep learning. The emergence of the IIoT (Industrial Internet of Things) and completely connected warehouse systems drive that growth even further.

Companies like Ocado Retail, Amazon and DHL demonstrate the possibilities of incorporating automation, and many companies are coming up with fascinating new technologies.

Other growth drivers are omnichannel distribution systems and the globalization of SCM networks.

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Primary Benefits

Now that we have looked at the latest warehouse automation trends let’s talk about the benefits of implementing automation. Check out this article for more information on incorporating automation and how companies can keep pace with the warehouse industry trends.

Boost Productivity

Automation can increase productivity and efficiency by 25-50%, which is necessary with current demands and same-day shipping trends. Smart warehouses can optimize workflows with faster picking, packing, transportation and inventory identification.

Improve Safety

The warehouse is a dangerous place where workplace injuries can happen. By replacing potentially hazardous tasks with automation, employees can be safer. Automation systems also create a safer work environment by reducing warehouse traffic.

Reduce Errors

Accuracy is paramount in the logistics industry, and the smallest discrepancy can carry substantial costs. Automation takes human error out of the picture and significantly increases accuracy, sometimes up to 99.9% for tasks like picking.

Optimize Labor

Robots are efficient in several tasks. However, humans are better at handling certain jobs. Rather than replacing labor, modern warehouse automation solutions attempt to utilize labor better and create a smooth, collaborative work environment. Fully automated warehouses are witnessing a smooth workflow where humans and automation complement each other.

Minimize Costs

By replacing manual labor requirements, warehouse automation can reduce warehouse costs. The upfront costs might stretch the budget, but it pays in the long run, especially during peak seasons where robots don’t need overtime payments. It can reduce overall spending by cutting errors and floor space costs.

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Next Steps

With growing labor shortages and increasing eCommerce demand, warehouse automation is gaining popularity. However, its implementation can be costly and time-consuming. If you’re just starting your business and find advanced automation daunting, consider using a comprehensive warehouse management solution for streamlined operations and optimized order fulfillment.

Need help selecting the best fit for your business? Check out our free comparison report of top products in the market. It also consists of top modules, features and user reviews to assist you in making an informed decision.

Which of the latest warehouse automation trends do you see shaping future warehouses? Did we miss any? Let us know in the comments!