Labour vs. Automation in the Warehousing Industry
Ever since advances in artificial intelligence and robotics reached a critical level in the early to mid-2010s, arguably no industry more so than logistics has been questioning what the paradigm shift means for the labour market.
The question is surrounded by an aura of both trepidation and hope. And rightfully so: automation and robotics in the logistics industry have already had a significant impact on costs, accuracy, efficiency as well as warehouse workers’ job descriptions.
In this article, we will go over the major points on the topic of labour vs. automation in the warehousing industry, and what it means for the workforce.
Much Ado About Nothing?
Perhaps the greatest fear of automation and robotics comes from the loss of employment. Over the past two decades, thousands brick-and-mortar retail stores have gone out of business as the demand for e-commerce continues to surge.
Consumers find e-commerce to be much more convenient as they can purchase items directly from websites which often have more updated, accurate and in-depth information regarding products. But this shift inevitably entails the increasing loss of retail jobs.
Before we get into this, let us consider the example of ATMs, automated teller machines. In the 70s and 80s, ATMs first started to appear on the map. Many economists believed that the introduction of ATMs would cause a significant loss in banking jobs.
Consumers find e-commerce to be much more convenient as they can purchase items directly from websites which often have more updated, accurate and in-depth information regarding products.
However, even though overall number of employees per bank decreased by 30% over the next three decades, the operating costs for banks decreased at the same time. This meant that more and more banks opened and jobs were created.
When it comes to the retail industry, we can expect to see more of the same. In the past ten years, over 140,000 full-time jobs were lost in the retail industry. At the same time, warehousing positions grew by over 400,000.
This may seem like one industry collapsed so that another could grow. But what really happened was that retail employees transferred to warehousing jobs. Warehouses now function as order-fulfilment centres. But the story hasn’t yet ended.
What the Future Really Holds for Warehouse Labour
With advances in automation and robotics, we can expect another dramatic shift in the coming decades. The shift which started from retail to warehousing is now moving from warehousing to logistics automation.
This includes the use of automated storage and retrieval systems, automated conveyors, barcodes and RFID (radio frequency identification) tags, industrial robots and software. The implementation of these technologies has transformed each and every aspect of warehouses and distribution centres virtually.
This has come at a time when e-commerce is reaching unprecedented demands of speed and efficiency in order fulfilment. However, contrary to popular opinion, this has not necessarily entailed significant layoffs for warehouse workers. Instead, the shift has meant that warehouse workers are not required to perform certain arduous tasks like carrying weighty objects or walking miles each day.
Because of automation and robotics, we can expect to see warehouse workers’ jobs transforming from more repetitive and menial tasks to supervisory and managerial roles. Of course, this entails that workers will be encouraged and required to add to their learning when it comes to dealing with things like business control and integration software.
As robots and machine systems increasingly handle the packaging, labelling, storing, retrieving, shipping and final distribution of items, warehouse workers will be required to perform tasks related to dealing with and managing ‘intelligent’ systems.
Because of automation and robotics, we can expect to see warehouse workers’ jobs transforming from more repetitive and menial tasks to supervisory and managerial roles.
The shift to higher-skilled tasks is a potentially promising road towards adaptation of the workforce to technological change. However, as with all things, it depends on how businesses lead the way forward.
In a worst-case scenario, companies will shift to de-skilling jobs and expanding the size of the potential labour market by increased use of temporary workers. As recent reports from Amazon suggest, this can stifle workers’ incentives as well as the benefits that they enjoy.
In a brighter future, more individuals and companies in the warehouse sector will work on training already existing workers to perform higher-skilled tasks.
As of now, it is still too soon to tell which way the weather vane will point regarding the future of labour in warehousing. One thing is for certain: the role of automation and robotics will continue to expand in logistics over the coming decades, reaching near 100% in around two decades. Others estimate it much sooner. Whenever that happens, companies should take a proactive way forward and work on training their existing workforce so that the transition remains smooth.