The increasing use of artificial intelligence and robotics in industrial facilities can help the incredible growth of the logistics sector to continue, according to a new report from Avison Young.
The report, The Rising Warehouse: Man And Machine, outlines how the advance in technology can help the sector overcome one of its key challenges: the availability of labour.
The report highlights how labour has come to play a key role in the logistics sector globally.
Demand from e-commerce means the need for new warehousing continues to grow, and developers are finding it tough to meet this in traditional prime areas, such as the “Golden Triangle” in the UK.
This is not because of a lack of available sites, but a lack of available staff.
Transport and staff account for 90% of the costs for a typical warehouse occupier, Avison Young said. Rent and property costs are about 10%, so occupiers don’t mind paying prime rents to be in prime areas, but that is becoming more difficult because of the lack of availability of staff in these locations. The Sunday Times reported that Amazon had been forced to increase wages in its UK warehouses because of a lack of staff. The tech firm said that availability had nothing to do with the decision, which was altruistic.
This is prompting developers to look at secondary locations with worse transport links but a higher availability of staff, seeking a balance that is important for logistics occupiers: Secondary locations might have plentiful and therefore cheap labour, but higher transport costs, and vice versa.
But the increased use of technology like AI and robotics could mean that warehouses need fewer staff, making labour availability less of a factor, and meaning that prime locations become options again. This will be a medium-term phenomenon because of the upfront cost of installing technology, Avison Young said.
Examples of the technology being introduced include robots that can pick items off shelves and pack them, automated vehicles like forklift trucks, automatic bar code and labelling technology, and increasingly sophisticated AI-powered warehouse management systems.
This technology is not only changing the location of warehouses, it is changing the shape of them: It allows them to be built higher, from averages of about 12 metres to up to 30 metres, as automated picking machines access goods stored high up in mezzanine space.
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