NFI Industries

Automation: What Does It Mean for the Future?

Automation continues to make headlines with predictions of two-hour delivery times and drone services in the future, but what is truly in-store for the future of the shipping industry? While it’s unlikely the industry will see those sorts of advances in technology anytime soon, ecommerce continues to drive demand for automation. Customers are expecting faster, more personalized service with real-time updates. In return, more and more businesses are turning to 3PL providers for increased efficiency.1

Automation is Essential to Remain Competitive

Businesses are turning to automation both on the road and within warehouses to meet customer demands and remain competitive within their industry. Through increased efficiency, automation can help reduce operating costs, as well as optimize time and productivity. There is also potential to improve safety and limit the impact of errors. Further, automation technology offers greater visibility across the supply chain, offering for deeper analysis of data and resulting in lower out-of-stocks, faster transportation time, and less congestion within warehouses.2

Automation Will Supplement Labor, Not Replace It

Rather than autonomy replacing employees, artificial intelligence will bring a shift in responsibilities to the future; employees will hold their value within the industry while automation helps them become work more efficiently. Even with the most advanced technology, some believe that distribution centers will never be fully automated. Instead, they will be composed of a balanced approach of automation and labor. If companies implement an efficient system of both automation and labor, companies could yield productivity improvements of 25 to 35 percent.3

A 3PL Provider Can Help Balance Automation and Labor

The 2018 22nd Annual Third-Party Logistics Study stated that 17 percent of shippers cited their uncertainty in ROI when asked what is standing in the way of investing in automation and digitization. Other reasons for not investing included competing core IT projects, lack of funds, and a non-digital culture and mindset, respectively.4

The study also showed that shippers are increasingly relying on their 3PL partners for a broad range of logistic and supply chain services. There has been a large increase in the percentage of shippers seeking IT services from 3PL providers, with 27 percent indicating outsourcing of IT services in the 2018 study compared to 17 percent in the previous year. Because the industry is continuously advancing, it’s possible that technology can become outdated within the course of only one year. To circumvent this, companies are partnering with 3PL providers to explore robotics and automated technology without great capital investments.5

As ecommerce continues to grow, automation will become essential for businesses to remain competitive across most industries. By balancing automation and labor with the help of a 3PL provider, businesses have the potential to increase overall efficiency by maximizing productivity, reducing operating costs, and improving upon analytic capabilities.