The Growing Role Of Automation In E-Commerce

Adi Gaskell , CONTRIBUTOR

Opinions expressed by Forbes Contributors are their own.

Employees from GATEway (Greenwich Automated Transport Environment) watch an autonomous parcel delivery robot, developed by Starship Technologies Ltd., as it travels along a path at Greenwich Peninsula in London, U.K., on Tuesday, April 11, 2017. Tesla Inc., BMW, Daimler AG, General Motors Co., Ford Motor Co. and Volvo Cars have promised to produce fully autonomous cars within five years, as they work to overhaul their business models. Photographer: Chris Ratcliffe/Bloomberg

When the dot-com bubble burst over a decade ago, it seemed like the promise and expectations of e-commerce burst with it. In the intervening years however, the digital economy has grown such that those early expectations probably look a bit under-cooked. Nowhere has the impact of e-commerce been greater than in the logistics industry, which has received a sufficient boost to encourage a raft of new entrants and even business models to emerge.

As the industry has grown, so too have consumer expectations, and innovations like single click ordering and deliveries within an hour bely the hard work that goes into making our shopping experience so smooth and convenient.

As the volume of packages ordered online has mushroomed, the logistics industry has come under increasing strain. Professional drivers have had to compete with the burgeoning gig economy, but with labor costs rising and the gig economy coming under increasing political pressure, it’s a model that looks set to change yet again as automation makes a bigger impact on the market.

Here come the bots

For instance, machines are a growing presence in warehouses around the world, and whilst men still typically operate forklifts today, this is set to change, with the Iliad Project working on the development of autonomous forklift trucks.  The team, which consists of robotics specialists from the UK, Sweden, Italy and Germany, have been working on the project for four years and believe the machines can support tasks such as packing, palletising and transporting goods.

The team believe that ILIAD will prove a valuable addition to the warehouse environment because it’s an easy and low-cost deployment that won’t require significant infrastructure investments.  What’s more, the robot is ‘human aware’, using AI and computer vision to monitor the movement of humans in the vicinity.

AI is also playing a role in the process of getting goods from warehouse to our door by predicting demand based upon factors such as past demand and the weather. It’s also increasingly common for technology to be placed inside pallets to monitor the health of the produce inside. By monitoring the health of food, for instance, logistics staff can reroute produce to nearer stores to ensure the shelf life is retained and products don’t spoil en-route to the store.

Machines are also making inroads into the physical act of delivery itself. Amazon have attracted a lot of the publicity in this sector with their delivery drone pilots, but it’s likely that the early inroads will be made by driverless delivery buggies, such as those produced by Estonian startup Starship Technologies.

The company, which was founded in 2014, currently has a fleet of over 150 delivery robots operating in cities around the world, and recently surpassed 100,000km covered autonomously. Whilst most of these initial journeys have been conducted with a human chaperone, the company has enjoyed significant growth year on year.

A significant challenge for this kind of model will be in the delivery of multiple items in one journey. It’s a task that human couriers can do easily, but machines like the Starship robots currently struggle with. The company are open about their ‘lean startup’ status however, and are very much using their initial forays into the market not only to learn the technical requirements needed to ensure the robots go about their work safely, but also the commercial requirements of their customers.

Suffice to say, they are at an early stage of their journey, and the bulk of their custom to date has been in the area of food delivery. It remains to be seen, therefore, whether they can successfully raise the capital required to scale their fleet sufficiently to provide a more total logistical solution across a wide range of products, much less the vast quantity offered by an Amazon.

With e-commerce growing at such a rate, it seems inevitable that automation will play an increasing role in all aspects of the value chain. The early use cases identified above provide a glimpse into some of the ways this might unfold.