How Leased Robots Are Helping Improve Holiday Deliveries

Leased robots used for sorting, loading and stocking shelves are helping logistics firms get purchases to customers in time for the holidays, especially in the face of ongoing workforce shortages. 

The leased robots save companies on hiring and maintenance, but they do require advance notice to the suppliers. JL 

Angus Loten reports in the Wall Street Journal:

Logistics firms looking for extra help during the holidays are leasing temporary package-handling robots. Leased robots can be added to existing fleets of warehouse, distribution and fulfillment center robots at any time to support a jump in demand. The robots are increasingly being used for picking up and sorting packages, receiving and unloading them, moving heavy payloads and replenishing stock shelves. Leased robots can be returned to their manufacturers when online shopping orders cool down after the seasonal rush. “We have over 10,000 robots contracted in the field.”

Logistics firms looking for extra help during the holidays are leasing temporary package-handling robots, which can be returned to their manufacturers when online shopping orders cool down after the seasonal rush.

Leased robots, which have grown in popularity across the industry in recent years, can be added to existing fleets of warehouse, distribution and fulfillment center robots at any time to support an anticipated jump in demand, robot vendors say. 

The robots are increasingly being used for picking up and sorting packages, receiving and unloading them, moving heavy payloads and replenishing stock shelves, among other automated tasks, they say. 

Sally Miller, chief information officer of DHL’s North American supply-chain business, a unit of Deutsche Post AG , said she is planning to deploy “a good number” of temporary robots at several of the company’s retail-focused sites. The Locus Robotics robots—which the manufacturer calls “surge bots”—will be used for picking up orders and fulfillment, Ms. Miller said. All told, DHL expects to have some 2,000 robots working in its facilities by the end of the year, she said.

 

Locus Robotics, a seven-year-old Wilmington, Mass., startup, said at least a third of its more than 90 corporate customers worldwide—including DHL, Ceva Logistics AG, Boots UK Ltd. and Geodis SA—are ordering temporary robots for this year’s holiday rush. That is up from roughly a quarter that used them last year, the company said. 

“We have over 10,000 robots contracted in the field,” a figure that includes both short- and long-term contracts, said Locus Chief Executive Officer Rick Faulk. 

Mr. Faulk said the growing demand for robots in the logistics industry is being driven by a shortage of workers, ongoing supply-chain disruptions and continued momentum from a sharp increase in online shopping triggered by the Covid-19 pandemic.

Spending in the global logistics robotics market, which was valued at roughly $2.6 billion in 2020, is expected to grow at a compound annual growth rate of 22.94%, reaching an estimated $10.97 billion by 2027, according to data analysis firm Research and Markets.

Excluding Amazon.com Inc., which is by far the sector’s largest robotics user, there are more than 20,000 logistics robots of all kinds in use today, according to estimates by information technology research and consulting firm Gartner Inc.

Robots from Locus Robotics await deployment.

PHOTO: LOCUS ROBOTICS

Known as robots-as-a-service, leased robots are employed widely in manufacturing, but are relatively new to the logistics industry, analysts said. Under the model, users are charged a subscription-like fee from third-party robotics firms, with varying rates based on the type of tasks being performed, processing volumes or the kinds of packages being handled. 

By leasing robots, companies are spared high upfront costs and ongoing maintenance expenses. On the downside, orders for subscription-based robots have to be made well in advance of an anticipated upturn in demand—which can be hard to predict in an uncertain economy—to allow vendors sufficient time to program and install the robots for specified tasks.

Pitney Bowes Inc., the 102-year-old mail and package processing firm, last year deployed subscription-based robots at its Stockton, Calif., e-commerce hub to sort parcels during the holiday season. The extra robots, provided by Berkeley, Calif.-based Ambi Robotics Inc., helped the company handle a surge of packages, it said.

Pitney Bowes now expects to have at least 68 Ambi Robotics systems operating in nearly a dozen of its e-commerce hubs globally within the next three months, part of a four-year $23 million deal announced earlier this year, a Pitney Bowes spokesman said.  

Saman Farid, co-founder and chief executive of subscription robot vendor Formic Technologies Inc., said the process of outfitting a company with a leased robot typically involves taking a 3-D scan of a facility and feeding the data into an artificial intelligence-enabled program designed to generate a mock-up of a robot’s mechanical, electrical and software systems: “Then we actually build it, put it in place and manage it,” he said.

Formic also takes steps to ensure customers only pay when the robots are up and running: “If their system is not running for any reason, they aren’t paying for it,” Mr. Farid said.

Mr. Faulk, of Locus Robotics, said the company hopes many logistics firms will hold on to their temporary robots well after seasonal highs, as a way to eke out year-round efficiencies. 

If nothing else, he said, surge bots may come in handy in the weeks after the holidays: “These robots can also handle returns,” Mr. Faulk said.