Next Generation Logistics: are we heading towards a fully automated future?
The online market landscape is brutally competitive. In China, that marketplace continues to grow much faster than the West, with delivery motorcycles flooding urban areas to satisfy shoppers’ demands for timely shipments. Standard delivery by e-commerce is now 24 hours, some promising 30-minute service for certain items.
This competition puts increasing strain on delivery drivers and riders, who typically work on commission. They can often be seen hurtling recklessly about the roads as they try to fill orders. To top it off, the shortage of drivers has sent wages soaring and created a last-mile logistics services boom, placing drivers from rural areas with urban delivery companies.
Many doubt whether this growth is sustainable. Last-mile logistic companies are forced to raise their rates in peak hours, and are receiving increased criticism regarding the working conditions offered to their employees.
The pressure has led to bigger spend on fully and semi-automated delivery concepts, R&D tests and pilots all over the world by logistics giants such as Amazon, Ali Baba and JD.com. With the assistance of drone and artificial intelligence (AI) technologies such as autonomous navigation, face and voice recognition, they hope to find better ways to grow their services while improving operations. For example, Amazon’s recent acquisition of “smart doorbell” company Ring for US$1 billion is actually a buy into technology that could enable trusted delivery to homes, while the owner is away. As the online economy grows, more smart robots are deployed to boost operational efficiency and grant the perfect service to customers
JD.com, one of China’s leading e-commerce platforms, has signaled one possible direction of its future supply chain operation. The company has developed robots capable of delivering the last mile to the customer address.
A pilot operation of 20 robots has been serving in a radius of five kilometres from the logistic centre. The robots have 22 cells. The fleet is reported to deliver about 2000 shippings a day.
How serious is JD about last-mile delivery robots? It has started promoting the use in Beijing, and advised that it’s been working with Chinese robot vendor Siasun in the development of specialised logistics robots. Within the next five years, JD intends to revamp 800 logistics centres, equipped with AI technology. The company is planning to build automated docking and distribution stations for the robots, and leave the logistics centres with human supervision on the machines.
How do the robots identify the customer before it unlocks a cell with the package? Apparently it works with a password, combined with a facial recognition system.
JD.com has reported that it’s already delivered goods by drones in Shanghai during September 2018.
Ali Baba, JD’s bigger rival, is also pushing more automation. Chairman Jack Ma Yun said Alibaba will invest at least 100 billion yuan ($14.49 billion) to reinforce its logistics operations. The group’s logistics subsidiary, Cainiao, is already speeding development of unmanned warehouses and AI-equipped robots.
Will Australia experience a similar explosion in e-commerce services? Or will it go through human-free, AI-driven services? Are we going to a truly fully automated future?