Supply chain and logistics operations are increasingly turning to automation to meet the vast demands of e-commerce. At the same time, major providers such as FedEx are carefully evaluating robots and working with partners to ensure that they solve business needs.
The global market for logistics robots will experience a compound annual growth rate of 28% from 2018 to 2022 because of workforce issues, estimates Technavio.
Robotics Business Review recently spoke with Ted Dengel, managing director of operations technology at FedEx. Dengel will be part of a panel on “Robots and Drones for the Next Generation of E-Commerce” at our Robotics & AI Summit at LiveWorx next month in Boston.
How does FedEx see the current state of automation and logistics?
Dengel: There are two different dynamics in the marketplace: the growth of e-commerce and volumes going higher, driving us in different directions. We’ve always been automated in sortation, which allows us to be flexible at peak seasons.
Now, we’re looking at other outside processes that are more manual and how to automate them with robotics and autonomous vehicles.
On top of that, e-commerce is driving changes in packing, which used to be standardized around 12 by 12 or 24 by 24 [inch boxes]. We’re now doing individual deliveries of shirts in a bag, tires, kayaks, etc. We’re trying to find creative and automated ways of handling these things.
Loading and unloading trucks are two points where we touch packages. There’s not a single-arm solution — what we tested didn’t work. How can we use robots in handling 10 million packages a day? At peak periods, that more than doubles.
How is robotics responding to these challenges? What are your criteria as you assess robots?
Dengel: In the robotics space, robots have historically done the same thing over and over again, but in my world, every package is different. Having a robot with the flexibility to handle anything thrown at it is a challenge.
A second challenge is high rates, high volumes — we need to address speed and variability. More people are entering the market with computing power and manipulator technologies.
We’re doing testing in different areas of our operations. We’re looking for all characteristics simultaneously.
We’re starting to see some breakthroughs. It’s not a pure robotics solution — combining materials handling with some robotic movement and machine vision, but still handling bulk flows. We’re not handling a single package.
The overall solution needs to operate at a high rate at a cost that makes sense. It has to have a long-term place in our operation, in terms of transaction rates and cycle times.
Is FedEx testing multiple robots?
In the time frame, we’re looking at a couple of different areas to automate. There’s transport within the building — we want this by this coming peak season. We’ll have multiple facilities in production.
Other technology that’s still in the pilot phase includes loading and unloading trailers, pick-and-place tasks. The challenge is handling packages in bulk scenarios with a lever and arm. That’s probably two to three years out.
Things are in pilot, but nothing is widely deployed yet. Senior management needs to know the return on investment and current rates of throughput.
What about the concern about robots and jobs?
Dengel: This is a key topic that comes up at every conference. Growing e-commerce demand is a big part of this — I won’t have enough people to move packages in the next few years.
The U.S. Post Office, UPS, Amazon, and we are all facing this increase of 15% to 18% over the next five to 10 years. This is an industry problem.
I have to look at anything I can do to get help during our peak season. There’s absolutely no reduction in jobs at FedEx [as a result of automation].
Even if the environment was stagnant and robots were replacing labor, they elevate the level of work by humans. With retraining, the people who build, support, and operate robots can help grow the economy. That leads to higher productivity and more jobs generated.
Automation is necessary for the market to continue to grow. Any jobs that are taken away — human labor is immediately redeployed to more human, more complex, less mundane or repetitive jobs.
Are you concerned about competitive pressures, or is the demand so great that there’s room for lots of robotics and logistics players?
Dengel: We’re all trying to solve the same problems, and we’re all talking to the same folks. The pressure is not coming from one another; it’s really from us being able to handle packages in our own way and to automate as much as possible. We want to advance and extend automation.
Because of labor concerns and increasing traffic volumes, it’s more of an environmental pressure. We want to quickly and efficiently meet our service expectations and maintain cost.
How do you view the potential for robots in solving the so-called last-mile problem?
Dengel: There is an element of automation, but even more variability. People have different front porches, so it’s harder to be efficient.
Those are among the types of challenges that we’re trying to address, as we have more residential deliveries. We previously delivered 12 shirts to a shop in a mall. Now, we’re making 12 deliveries to residences — the economics are very different.
Anything that makes it easier for recipients to get deliveries, to a retail store or to their car trunk — automation is creating solutions.
For last-mile deliveries, we’re looking at FedEx Ground and across FedEx Enterprise. They need to be secure and able to traverse steps and get to apartments. There are lots of technical challenges.
What about drone deliveries?
Dengel: Five years ago, [Amazon CEO Jeff] Bezos said that drone delivery would come in two years, on the record. He helped drive the technology, and Amazon is a valued customer.
But aerial drones are really useful for niches, like emergencies, not for our main business. You can’t use them in the middle of winter in Minnesota or the middle of summer in Arizona. FedEx needs technologies that are practical on an everyday basis.
We’re keeping things close to the vest for now. We’re trying to figure out the last mile. Ground delivery robots are very intriguing — lots of folks are trying to solve that.
Do you have a wish list of what you’d like robots to be able to do?
Dengel: Within our facilities, loading of trailers is very tricky to do effectively. There’s the whole variability issue — we have drop-train trailers for more space.
Outside, we’re figuring out how to effectively deliver to the last mile that packages won’t get stolen. I saw a video today of a typical incident of someone grabbing a package off a porch.
Deliveries have to be safe and secure — at FedEx, that’s the most important for our employees and the public.
For someone to receive a package, we don’t see people going miles and miles and figuring out drop points. We need public acceptance.
We’re doing some early testing of configurations of mobile manipulators. That’s a little farther out, but the problem can be solved.
In terms of business model, is FedEx looking for suppliers and partners, or is it looking to acquire a robotics provider?
Dengel: Traditionally, we partner with key providers. For example, with core scanning in dimensioning technology, we’ve generally partnered with experts in the field.
There’s certainly lots of robotics as a service [RaaS] or by transactions, a way that lots of companies are getting around the burden of capital investments.
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Tell us a little bit about your upcoming session at our Robotics & AI Summit.
Dengel: We’re looking to automate as much as we can, so we’ve been attending and participating in panels. We always attend RoboBusiness, and we’re excited about participating in PTC’s LiveWorx for the first time.
Early on, we participated in summits on autonomous vehicles. We have a lot of trucks on the road, so we want to be part of that discussion.
It’s a three- or four-way conversation, with industry, end users, government, the public, and manufacturers of technology. There are legal ramifications of liability.
We have to get all stakeholders at the table. The more conversations we can have in that space, looking at challenges and timelines, then we’ll be able to provide the best solutions for everybody.
What takeaways do you want to leave for readers and audience members?
Dengel: We look at labor and robotics as a positive. You need to remember the bigger picture.
We’re excited about automation, and FedEx is looking to increase usage and drive the industry.