Year 2020 and COVID-19 pandemic along with lots of uncertainty has put a bigger spotlight on the use of automation in warehouses worldwide. Whether they’re adapting to new social distancing rules, under pressure to distribute a higher volume of essential goods, struggling to meet same day delivery or trying to add more remote work capabilities. As per LogisticsIQ’s latest post-pandemic market research study, Warehouse Automation Market will reach the milestone of $30B by 2026, at a CAGR of ~14% between 2020 and 2026.

Despite of the temporary reduction in retail and e-commerce caused by lockdown and economic distress in this pandemic, we have seen a strong order intake of warehouse automation in 2020 which may reflect in revenues of these system integrators and manufacturers in 2021 or 2022. At the same time, a revenue dip of 6% is expected in 2020 as compared to our pre-pandemic forecast of 12% growth because projects were put on hold due to supply chain disruption and covid-19 locked down guidelines.

Post COVID-19, most important and emerging trends have been eGrocery growth, Micro-Fulfillment Centers, Urban Warehouses and automated cold storages. Huge investment for start-ups like Takeoff technologies ($86M+), Fabric ($136M+), Attabotics ($82M+), Exotec Solutions ($111M+) and Alert Innovation are witnessing this growth along with presence of existing players like Dematic, Swisslog, Knapp, Opex Corporation, Muratec, AutoStore, Honeywell Intelligrated and Toyota Industries. Retailers such as Walmart, Kroger, Woolworth, Amazon, Ocado, Meijer, H-E-B, Albertsons, and Ahold Delhaize have already started adopting and implementing these new technologies during pandemic.

Key Highlights

  • Among all regions, US has been the key region to target having more than $4B market size in 2019 with a growth rate of 12% in next 5 years. Germany is the traditional hub in Europe apart having ~35% market share in the region apart from some attractive markets like UK, Nordic region and France. It is expected that next wave of opportunity is going to be originated from South East Asia, India, Australia which are the key market in APAC after China, Japan and South Korea.
  • AGV/AMR market is expected to cross $5B mark by 2026 with a CAGR of ~32%. AMR is going to be main contributor in retail warehouses due to high demand in e-commerce sector and its flexibility to deploy the robot. However, it is a bit slow in terms of pick rate per hour as compared to ASRS for G2P solutions.
  • The Grocery industry is one of the most challenging and attractive industries from a logistics perspective.  Higher automation driven by online grocery, micro-fulfillment centers and COVID-19 is going to be biggest opportunity in next 2-3 years led by cube-ASRS, Delivery Robots and Micro-Fulfillment players such as AutoStore, Takeoff Technologies, Exotec, Fabric, Attabotics, Dematic, Nuro, Tele Retail, KiwiBot, Robby Technologies, and Starship. Automation for eGRocery is going to witness an opportunity worth ~$5B by 2026.
  • Service model (MRO) importance increasing – Over the time as the installed base of automated warehouse solutions grows, industry players expect an increase in revenues from services and maintenance, which would have a positive impact on profitability as the service business typically has 15-20% operating margins, versus 3-5% margins for new equipment. It is expected to be ~$7B worth market by 2026.
  • Business models are also changing considering the real time pain points of end-users for high capex. Businesses are increasingly intrigued with RaaS because of its flexibility, scalability, and lower cost of entry. The business model for picker-as-a-service is usually on a per-pick basis, ranging from 6 cents to 10 cents per pick, while AMR-as-a-service is usually leased on a monthly basis, from US$711 per robot per month to several thousands of dollars per month.
  • Existing fully automated systems can reduce warehouse related labour costs by up to 65% and logistics-related spatial use by up to 60% at the same time as it increases the maximum output capacity.
  • The adoption of technology is by no means uniform. While one-hour delivery is available when buying online in some parts of the U.S. and Europe, the average promised delivery time in Brazil is nine days.
  • Amazon Robotics automates the company’s fulfillment centers using more than 200,000 autonomous mobile robots, up more than 600% from 30,000 at the end of 2015. Last year, DHL announced an investment of $300 million to modernize 60% of it warehouses in North America with IoT and autonomous robots (~1,000 LocusBots commitment for delivery fulfilment).