material handling market

Autonomous Guided Vehicles (AGVs) were introduced in 1954.  These devices have largely been unable to service the needs of the low wage distribution sector.  But recently the digital revolution has opened new opportunities for robotic automation by providing low cost hardware and software options for robotic development.

The strongest initiative in robotic warehousing automation is Kiva Systems which was able to achieve $100 million in annual sales in 9 years of existence before purchase by Amazon in 2012 for $775 million dollars.  Amazon has since deployed over 30,000 Kiva robots within its distribution centers. 

The success of Kiva Systems has spurred at least 13 initiatives for mobile warehouse robots.  Regardless of these efforts, 4.45 million full-time employees are presently employed in manual order fulfillment within the USA.  Even while scaling up its robotic deployment , Amazon itself added at least 100,000 seasonal and 25,000 full-time warehouse employees in the USA in 2015.

The era of warehouse mobile robots is just opening as resources are increasingly focused on tasks that have greatly expanded as a result of ecommerce and the digital economy.

aGV's and mobile robots

The material handling equipment market is an established global market that at its recent low in 2009 was $100 billion dollars, and at its high in 2007 was $149 billion dollars.  The current market is approximately $126 billion dollars.  While there are continuous innovations and refinements, most equipment systems in modern warehouses have long histories.  Powered conveyors trace their history to 1804, and forklifts to 1917.

The digital revolution has placed additional demands on distribution centers by spawning retail ecommerce, and by increasing less-than-pallet-load orders by retailers.  This has resulted in an explosion of small orders.  In the USA between 2002 and 2012, there was a 68% increase in shipped parcels of less than 50 lbs., while the total weight of goods shipped in the USA declined 3% during the same period.

Between 2002 and 2014, this growth of less-than-pallet-load orders added $11.17 billion annually in the USA alone in manual labor costs.  By 2014, the total labor costs for manual order fulfillment in the USA unaddressed by present material handling systems was approximately $145 billion dollars.

The digital economy has expanded rapidly within the developed economies of the world and also within some of the developing economies.  An estimate based on the growth of ecommerce globally indicates that there is a total manual order fulfillment labor market of $353 billion dollars unaddressed by present systems.