December 23, 2024

How 3PLs Will Lead the Logistics Automation Revolution

How 3PLs Will Lead the Logistics Automation Revolution

If you work in supply chain and logistics long enough, you start to see science fiction become a reality. If you go back as far as the 1950s, you’ll find that writers like Isaac Asimov and Philip K. Dick were writing about self-driving cars and flying drones that perform everyday tasks. What was once futuristic fiction is quickly becoming a practical reality in the logistics sector.

Drones buzz through warehouse aisles and city streets, handling mundane, repetitive tasks. Automated guided vehicles (AGVs) tirelessly move goods between multiple points in the distribution center as self-driving trucks sit on the verge of widespread regulatory approval, ready to redefine freight transportation. These inventions are quickly reshaping the way we move goods through the supply chain by bridging longstanding gaps in speed and efficiency.

The Growing Use Cases for Logistics Automation

Thanks to significant advances in artificial intelligence (AI) in recent years, the internet abounds with videos of robots climbing warehouse shelves and drones delivering packages to front yards. However, the reality is that these technologies are not yet widespread. Like all new technologies, the cost of entry for advanced automation solutions is high. For a small shipper running a warehouse on coffee-stained paper lists and Excel spreadsheets, the idea of a drone scanning shelves and updating inventory data in real time probably seems very far away.

Yet, many of these technologies are actually available and in use by early adopters. Over the next few years, the industry will start to normalize the use of automation technologies, including:

  • Drones. Unmanned drones will play a significant role in warehouses and distribution centers in the near future, especially as retail logistics become more and more customer-centric. From ensuring a real-time view of stock to delivering small items in the last mile, drones will likely go from novelty to essential equipment relatively quickly.
  • Robotics. The warehouse robotics sector has been trying to position itself as the answer to the warehouse labor shortage for several years now, and they aren’t wrong. Collaborative, goods-to-person warehouse robots can save a warehouse associate thousands of steps and take on many tasks that cause repetitive stress injuries.
  • Automated guided vehicles. While AGVs go back to the 1950s in some form, what we know as AGVs today started more than a decade ago with Kiva robots hauling big racks of goods to workstations for packers to grab items. AGV options now include self-driving forklifts that can decide which path to take without human input.

These physical automation solutions will ultimately allow associates to do more in less time and turn traditionally understaffed warehouses into efficient operations. Of course, these technologies can’t do much on their own. The advanced AI found in modern warehouse management systems (WMS) and warehouse execution systems (WES) is responsible for driving and operating physical drones, robots, and AGVs, creating yet another barrier to entry.

3PLs Will Normalize Warehouse Automation

While megaretailers like Amazon and Walmart ultimately lead the experimentation phase for new logistics tech, it’s third-party logistics (3PL) providers that will eventually spur widespread adoption. That’s because 3PLs can spread higher upfront implementation costs across their customer base and don’t have to absorb the financial impact in the same way.

The technologies change, but the trend itself isn’t new. Shippers often rely on their 3PL to access technologies they don’t otherwise have, like advanced WMS, inventory management, or control tower systems. 3PLs played an integral role in normalizing the use of those solutions in the broader market, just as they will with the next wave of automation.

About Phoenix Logistics

Strategic Real Estate. Applied Technology. Tailored Service. Creativity. Flexibility. These fundamentals reflect everything we do at Phoenix Logistics. We provide specialized support in locating and attaining the correct logistics solutions for every client we serve. Most logistic competitors work to win 3PL contracts, and then attempt to secure the real estate to support it. As an affiliate of giant industrial real estate firm Phoenix Investors, we can quickly secure real estate solutions across its portfolio or leverage its market and financial strength to quickly source and acquire real estate to meet our client’s need.

As Senior Vice President for Phoenix Logistics, Mr. Kriewaldt oversees the company’s day-to-day operations as well as corporate strategic development. With more than 25 years of experience in the industrial real estate and logistics industries, Mr. Kriewaldt boasts extensive expertise in real estate practices as well as third-party logistics operations, contract negotiation, and new business development. Mr. Kriewaldt proudly fosters long-lasting business relationships by putting the customer first and creating mutually-beneficial partnerships for all involved. He also holds a Master’s in Business Administration from the University of Texas and a Juris Doctorate degree from Marquette University.

Frank P. Crivello is a Milwaukee-based developer and Chairman & Founder of Phoenix Investors.

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