Dr Khasha Ghaffarzadeh
Mobile robotics in material handling and logistics will become a $75bn market by 2027. It will then more than double by 2038. These staggering headline figures mask turbulent transformative change underneath: some technologies will rise and transform the fortunes of industries, fuelling growth rates far outpacing recent trends, whilst others will face with decay and obsolescence. We are at the beginning of the beginning of a transformative change, and the time to plan is now.
The IDTechEx Research report Mobile Robots & Drones in Material Handling & Logistics 2017-2037 focuses on all aspects of mobile robotics in material handling and logistics. In particular, we consider the following: automated guided vehicles and carts (AGV and AGC); autonomous mobile vehicles and carts/units; mobile picking robots; last-mile delivery ground robots (droids) and drones; and autonomous trucks and light delivery vans (level 4 and level 5 automation).
Incumbents face obsolescence?
AGV are a mature technology that can safely transport payloads ranging from several kg to multiple tonnes, essentially acting as semi-rigid distributor conveyer belts covering large areas. Their navigation technology is evolving. Today, multiple options are available ranging from the low-cost wire or magnetic tape guidance to the increasingly popular laser guidance. All, however, follow rigid guide points, thus requiring some degree of infrastructure modification and extended onsite installation. This industry is showing healthy, albeit small, grow rates.
This gives an illusion of security to this mature, highly fragmented business where price competition is rise. The next generation navigation technology – infrastructure-independent flexible autonomy – has the potential to shatter this illusion. This new technology, whilst appearing just as the next natural step in navigation technology evolution, requires a whole-scale change in the software side of the robots, giving an opportunity to new challengers to enter and to fully redraw the competitive landscape.
Forklifts will never be the same?
Navigational autonomy will induce a colossal transfer of value from wage bills paid for human-provided driving services towards spent on autonomous industrial vehicles. This, in turn, will fuel the growth in this material handling vehicle industry (e.g. forklift), creating significant revenues over a business-as-usual scenario. This is despite our technology roadmap showing that hardware commoditisation will slowly devalue such driving services particularly in high-wage regions.
AGV barely made a dent in this industry. This is because their navigational rigidity put a low ceiling on their total market scope, keeping them as a small subset of the warehouse/factory automation business. Autonomous mobile robots are radically different, however, because they will ultimately enable automation to largely keep the flexibility and versatility of human-operated vehicles.
Our model suggests that autonomous forklifts, for example, will remain a tiny share of the global addressable market until around 2023 but will soon after enter the rapid growth phase, causing a transformation of the industry and dramatically raising adoption levels to as high as 70% by 2038.
Mobile picking robots will learn, fast
Navigational autonomy will induce a colossal transfer of value from wage bills paid for human-provided driving services towards spent on autonomous industrial vehicles. This, in turn, will fuel the growth in this material handling vehicle industry (e.g., forklift), creating significant revenues over a business-as-usual scenario. This is despite our technology roadmap showing that hardware commoditisation will slowly devalue such driving services particularly in high-wage regions.
Disrupting the last mile delivery using mobile ground robots
Last mile delivery remains an expensive affair in the parcel delivery business, often representing more than half of the total cost. Its importance is also growing thanks to a change in the composition of total deliveries with B2C deliveries rapidly taking on a bigger share. E-commerce companies are also pushing next-day and now same-day services hoping to take away that last stronghold of bricks-and-mortar shops: instant customer fulfilment.
Autonomous mobile delivery robots are currently small slow-moving units that will need to return to base to charge. They often need close supervision and can only operate in sparsely-populated and highly-structured environments such as university campuses or special neighbourhood. They therefore are unproductive and easy to dismiss as gimmicks.
This is, however, only the beginning of the beginning. Our cost projections in the report suggest that these mobile robots can indeed become low-cost. The robots are now in the trial and learning phase, gathering more data and optimising the navigational algorithms. They will become increasingly more adept at path planning, even when GPS signals fail, and at object avoidance. The increased autonomous mobility capability will in turn enable a lower operator-to-fleet-size ratio, furthering boosting overall fleet productivity.
Delivery drones: publicity stunt or a game changer in instant fulfilment?
The idea of drone delivery sharply divides commentator opinion: some dismiss it as a mere publicity stunt whilst others consider it a game-changer that will bring near instant product fulfilment to e-commerce, stripping traditional shops of their last major differentiator.
Drone delivery faces critical challenges. Individual drones offer limited productivity compared to traditional means of delivery. They can only carry small payloads and battery technology limits their flight duration, constraining them to around 30min radius of their base whilst further lowering their productivity due to the downtime needed for re-charging/re-loading. Safety is a potential showstopper with many accidents waiting to happen.
Drone delivery however is still in its infancy. Its short-term potential, we find, has been exaggerated. However, the technology has long-term future, particularly within the context of the bigger trend to automate as much as of the logistic chain as possible.
Indeed, we find that delivery drone sales will remain limited until 2027/28. Demand will then start to taking off in remote or sparsely-populated (e.g. suburbs), ultimately enabling companies to establish large accumulated fleets. Despite their ultimate rise, however, drone delivery will remain only a small part of the much bigger commercial drone story.
Trucking: a large attractive business to autonomise?
Trucking is a big business. In the US, the trucking industry revenues are in excess of $726bn. This is the equivalent of combined revenues of Apple, Amazon, Google, Microsoft, IBM, Baidu and then some (a lot) more. It is also a big employer: the US Bureau of Labour Statistics suggests that 1.79m people work in this sector driving 7.2m trucks for inter-city freight transport earning an average salary of USD 41,300/year. No wonder this is a hot topic now then.
Trucking is also potentially an easier target than general passenger cars. This is because it spends much of its time in intercity roads that are less congested and less sinuous than city ones. The driver may remain in the vehicle, but the commercial inventive, even in this hybrid approach, exists because it may justify a relaxation of the rulebook which limits driving hours. This can therefore boost driver productivity and asset utilization.
Our forecasts and technology roadmaps show how different levels of automation (level 4 and 5) will rise and fall in trucking over the next twenty years. Our forecast model has detailed projections for the future cost of automation hardware systems (Lidar, radar, IMU, GPS, PC, etc.) based on historical learning curves of similar technologies.
Dr Khasha Ghaffarzadeh is research director at IDTechEx.