What Lies Ahead for Warehouse Automation?

Whether through improving ergonomics or enabling workers to take on more meaningful tasks, the future of warehouse automation is constantly evolving. © panuwat – stock.adobe.compril

By Rick Faulk, CEO of Locus Robotics

Record levels of warehouse activity in 2024, as well as increased consumer expectations around delivery times and flexibility of returns, proved the value of automation. Looking ahead, it’s clear that automation is revolutionizing not only how warehouses operate but also how employees work. Whether through improving ergonomics or enabling workers to take on more meaningful tasks, the future of warehouse automation is constantly evolving. Let’s take a look at some predictions for what’s next for warehouse automation.

Mobile Automation Will Be the Fastest Growing Segment

The rise in e-commerce and omnichannel demand drives the need for flexible warehouse automation. Warehouses will prioritize flexible automation solutions that provide agility and scalability. Interact Analysis forecasts the global mobile robot market will exceed $7 billion in 2025, with a CAGR of 35%, making mobile automation the largest category.

Insights & Actions Driven by AI Is the New Currency

Recent advances in AI will accelerate the adoption of solutions that provide real-time operational visibility and enable smarter decision-making in warehouses. Optimizing labor allocation and predictive insights will help warehouse operations differentiate their services. According to Forrester Research’s 2024 report, implementing AI-driven analytics reduced operational costs by 18% through increased efficiency and decreased waste.

Demand for Flexibility

The term ‘flexibility’ applies to a range of elements, from financing, responsiveness to growth, order surges, market changes, to 3PLs changing customers, it allows warehouses to adapt to changing environments. RaaS (robots-as-a-service) in particular allows warehouses to quickly manage costs and scale robot fleets by shifting from capital expenditures to operating expenses. Deloitte’s 2023 Logistics Outlook reports that 72% of logistics firms are adopting RaaS, enhancing cash flow and enabling new automation and capacity flexibility.

The Continuous Shift Towards Using 3PLs Will Accelerate

The complexity of global supply chains and the pressure to scale quickly will see more businesses choosing 3PLs for fulfillment. According to Armstrong & Associates, the global 3PL market is expected to surpass USD 1.75 trillion by 2026, growing at a 7-8% CAGR.

By leveraging 3PL expertise, companies can cost-effectively adapt swiftly to fluctuating consumer demands.

Improved ROI

As labor-related costs continue to rise, automation’s ROI continues to improve. The 2023 MHI Annual Industry Report found that 74% of supply chain organizations plan to deploy robotics and automation within five years, highlighting the appeal of faster and higher ROI. Shorter payback periods drive adoption, with companies of all sizes embracing robotics and AI solutions.

Increased Utilization of Existing Assets

With rising economic pressures, companies will prioritize optimizing existing infrastructure over costly overhauls. Automation, process refinement, additional shifts, and strategic retrofitting help extend legacy facilities’ lifespans. A 2024 CBRE Logistics report found that 55% of warehousing operators are retrofitting legacy sites, increasing usable space by 20% and energy efficiency by 15%.

Heightened Focus on Security

As automation becomes more interconnected, robust cybersecurity is crucial for warehouses to protect data, robotics, and infrastructure from digital and physical threats. Cybersecurity Ventures forecasts global cybercrime costs will reach $10.5 trillion annually in 2025, heightening risks in transport and warehousing. Breaches can cause costly operational shutdowns for logistic operations.

Capital to Address Labor Challenges

Venture capital and corporate funding will heavily invest in mobile manipulation, humanoids, and AI to address labor shortages and automate repetitive tasks. According to PitchBook, AI boom has sparked investor frenzy, with a 144% increase in funding from 2019 to 2024.

Vendor Consolidation

As smaller automation and robotics vendors with shrinking balance sheets pursue mergers or acquisitions, consolidation will increase as larger tech providers acquire specialized startups to offer comprehensive solutions. According to CB Insights, only 18% of small warehousing tech startups secured follow-on funding in 2024, making mergers or acquisitions essential for their growth and survival.

Potential Impact of Trade Uncertainties

Geopolitical tensions and changing U.S. trade policies delay decisions and push warehousing and logistics firms toward regional strategies. Flexible operations are needed to handle policy shifts and ensure resilience. From 2018 to 2023, tariffs raised U.S. warehouse costs by 8%, a trend expected to continue with new policies in the USA in 2025 and beyond.

Flexibility and automating for business needs of tomorrow, as opposed to just today, will be a big focus when designing for growth. This year, successful warehouse automation will depend on choosing the right partner to navigate the operational challenges with. Finding the ideal solution requires aligning your business with a partner who can address your specific needs and goals, whether it’s increasing productivity, reducing costs, or improving throughput. An experienced yet innovative partner can guide you through the process and help you choose the most suitable automation for your warehouse operations.

About the Author

Rick Faulk is the CEO of Locus Robotics, with more than 20 years of experience in executive management, sales, and marketing for some of the most successful companies in the high-tech industry. Visit: https://locusrobotics.com/