An easing of supply crunches is on the cards for the latter half of 2022 as we expect to slowly edge our way out of the eye of the pandemic storm. There is, however, one problem that will have repercussions far beyond the transportation bottlenecks caused by the pandemic: an industry-wide labor shortage. This undersupply means that retailers and fulfillment companies are likely to struggle as demand surges in e-commerce due to a recovering economy and a shift in consumer behavior spurred on by the events of recent months.
The problem lies in plain sight but has taken a backseat to reports on strictly Covid-related supply chain disruptions. With human workers in continuous short supply, we can expect to see a feedback loop that dramatically accelerates the drive towards warehouse and logistics automation.
Is the labor shortage an opportunity to ramp up automation efforts?
Much in the same way the pandemic has spurred a shift in consumer behavior, it has also accelerated the development of automation solutions. According to a recent Federal Reserve survey of chief financial officers, a third of firms facing hiring difficulties are actively looking at automation to replace workers. The Association for Advancing Automation (A3), meanwhile, reports that orders for industrial robots in North America increased by 20% in Q1 of 2021, compared with the previous year, and that the food and consumer goods sector placed 32% more orders than the previous year.
The trend towards automation has, of course, been ongoing for several years. However, an increase in average labor wages, despite major job losses and higher unemployment rates since the pandemic, has greatly increased the urgency for finding new solutions. All of the disruptions to global supply chains will see the increased costs for logistics employers spread to consumers. So, if providers do not find ways to deliver their services without the workforce of years past, they simply will not be able to meet the increasing demand. This all means that logistics providers are now facing a situation where they are encouraged to ramp up their automation efforts. A staggering 80% of warehouses reportedly have no form of automation in place, meaning the market for automation of warehouses is still far from peaking. Against this backdrop, innovation in warehouse robotics will continue to attract record investments and accelerate at an unprecedented pace.