The effects of the COVID-19 pandemic have forced businesses to face some difficult challenges in their struggle to respond and recover. One of the lingering effects that has been particularly troublesome for businesses is labor shortages. Labor shortages are being felt across the board, severely impacting supply chain issues as the demand for e-commerce is experiencing a significant upsurge. The pressure is mounting, especially in the warehousing and manufacturing industries, for companies to take immediate action to address these issues.
With e-commerce demands continually on the rise, the impact of labor shortages and supply chain issues have led companies to automate at an unprecedented level. Automation that utilizes AGVs (automated guided vehicles) and AMRs (autonomous mobile robots) is now being seen as a must-have for businesses looking to survive and thrive in this new era. Businesses that cannot adapt are experiencing the painful effects, forcing many to close their doors.
Interact Analysis reported that over 100,000 mobile robots had been shipped globally in 2021. In the second quarter of 2021, it was reported by the Association for Advancing Automation (A3) that orders for robots in North America rose by 67% when compared to the previous year’s second quarter. Projections continue to rise at unprecedented levels over the next several years.
The warehousing and manufacturing industries are particularly feeling the heat. CBRE, a global leader in commercial real estate services and investment, claims the U.S. will need an additional 330 million square feet of warehouse space to address online fulfillment by 2025 in order to keep pace with the anticipated rise in e-commerce sales. Alongside that revelation, automakers are looking to invest heavily in automation for North American plants, over $37 billion from 2019 to 2025 according to LMC Automotive. Precedence Research has reported the automated guided vehicle market is expected to be worth $6.23 billion (USD) by the year 2030.
With all these projections showing a rise in demand, the need for automation has emerged as a viable solution to the problem. Automation not only addresses the issue of labor shortages, but promotes productivity, efficiency, and cost-effectiveness for companies looking for ways to adapt to these changing times. Implementation of AGVs and AMRs that collaborate with and provide much needed support for workers are also improving safety and boosting morale while removing mundane, repetitive, and dangerous tasks.
Major Causes Behind Labor Shortages Automation Solutions
According to the U.S. Chamber of Commerce, trends in the labor force are showing a large reshuffling of jobs. Those that require in-person attendance and normally pay lower wages are feeling the labor shortage impact much more severely. Automation is proving to be an excellent means by which to address this issue.
A Surge in E-commerce
According to Forbes, during the pandemic e-commerce sales increased by 50% to $870 billion.
During the pandemic companies needed to adapt to fulfill customer demands. The Census Bureau’s Annual Retail Trade Survey (ARTS) of 2020 reported that e-commerce sales rose from $571.2 billion in 2019 to $815.4 billion in 2020.
Curbside pickup, delivery, and online ordering became vital for both customers and businesses. The convenience of e-commerce and the fears that still linger with COVID-19 exposure have caused a boom in the e-commerce trade across the globe.
The warehousing and manufacturing industries are feeling the heat when it comes to supply and demand during the upsurge. Labor shortages have made a bad situation worse, causing serious supply chain issues. Automation addresses this problem head on. Instead of eliminating worker’s job, AGVs and AMRs are augmenting and supporting workers in the workplace.
The benefits of implementing AGVs and AMRs included:
The Bottom Line
Not only do labor shortages negatively impact the financial well-being of businesses, but the safety and well-being of workers as well. With workers experiencing unprecedented levels of stress and burnout, and companies struggling to remain financially healthy, automation is proving to be a key solution.
100,000 Mobile Robots Shipped In 2021, InteractAnalysis.com, March, 2022, https://www.interactanalysis.com/100000-mobile-robots-shipped-in-2021/
Robot Orders Increase 67% in Q2 2021 Over Same Period in 2020, Showing Return to Pre-Pandemic Demand for Automation, Automation.com, October 19, 2021, https://www.automation.com/en-us/articles/october-2021/robot-orders-increase-67-percent-q2-2021-demand
CBRE: U.S. Will Need 330M Sq. Ft. of Additional Distribution Space by 2025 to Meet Robust E-Commerce Demand, CBRE.com, June 22, 2021, https://www.cbre.com/press-releases/cbre-us-will-need-330m-sq-ft-of-additional-distribution-space-by-2025-to-meet-e-commerce-demand
Follow the Money: Investing in North American production, LMC-auto.com, August 18, 2021, https://lmc-auto.com/news-and-insights/follow-the-money-investing-in-north-american-production/
Automated Guided Vehicle Market (By Type: Unit Load Carriers, Tow Vehicles, Pallet Trucks, Forklift Trucks, and Assembly Line Vehicles; By Navigation Technology: Magnetic Guidance, Laser Guidance, Inductive Guidance, Vision Guidance, Optical Tape Guidance, and Others; By Application: Transportation, Distribution, Storage, Assembly, Packaging, and Waste Handling; By Industry) – Global Industry Analysis, Size, Share, Growth, Trends, Regional Outlook, and Forecast 2021 – 2030, precedenceresearch.com, 2021, https://www.precedenceresearch.com/automated-guided-vehicle-market
E-Commerce Sales Grew 50% to $870 Billion During The Pandemic, Forbes.com, February 18, 2022, https://www.forbes.com/sites/jasongoldberg/2022/02/18/e-commerce-sales-grew-50-to-870-billion-during-the-pandemic/?sh=6d6592d4e836
E-Commerce Sales Surged During the Pandemic – Annual Retail Trade Survey Shows Impact of Online Shopping on Retail Sales During COVID-19 Pandemic, Census.gov, April 27, 2022, https://www.census.gov/library/stories/2022/04/ecommerce-sales-surged-during-pandemic.html
Understanding America’s Labor Shortage: The Most Impacted Industries, uschamber.com, September 7, 2022, https://www.uschamber.com/workforce/understanding-americas-labor-shortage-the-most-impacted-industries
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