In April this year, the first public-facing robot at FedEx was put to work at a company office in New York. A customer was able to pass their broken Samsung device to ‘Sam’, which the robot then delivered to a technician in a back office, while a front-office employee completed the transaction with the customer.
That may have been a first for the $60 billion deliveries giant, but behind the scenes, in its vast warehouses and distribution centres, FedEx has been investing heavily in robotics technology for some years now – and deployments have seriously ramped up over the past year as the race to automate accelerates. In that respect, it’s hardly alone: the global market for logistics robots is set to see a compound annual growth rate of 28% between 2018 and 2022, according to research company Technavio.
For its own part, FedEx is working with Savioke, a Silicon Valley-based maker of autonomous indoor delivery robots, to develop a delivery system for a facility in Collierville, Tennessee. It’s also announced plans to test 20 robots from Vecna, based in Cambridge, Massachusetts, with a view to replacing existing human-driven ‘tuggers’ that haul large, unwieldy items around a 630,000 square foot distribution centre in Kernersville, North Carolina.
Ted Dengel is Director of Operations Technology and Innovation at FedEx Ground, which accounts for close on a third of the company’s overall revenues. He’s on the front line when it comes to the direction in which automation is taking the company – particularly in the area of e-commerce deliveries, where FedEx is working hard to fend off the creeping encroachment of Amazon and take a good slice of rising e-commerce volumes. It’s not just an issue for FedEx, he says, but for others in the industry, from UPS to the US Post Office.
Across the delivery spectrum, those volumes could increase between 15% and 18% over the next five to ten year. Robotics and automation could provide an answer to two key challenges posed by e-commerce logistics, he argues. First, there’s the range of packages that need handling:
It’s really changing the mix. One of the challenge we’ve always had in our world of robotics is that every single package is different in terms of size, shape weight, materials. Traditional robotics don’t work really well in our environment, where we have to have high throughput, high productivity. Your traditional, single-arm robot that has to move an object from here to here doesn’t work well in our world, just because of the variability. You throw e-commerce on top of that, it makes the product mix even more broad.
In other words, newer robotics technologies may be better able to deal with this mix, from small envelopes containing a single T-shirt, for example, to mattresses, kayaks and car mufflers – but it’s still a challenge.
If the first challenge is to figure out how to automate across that whole spectrum of packages and integrate traditional robotics with newer approaches to materials handling, the second is dealing with increasingly unpredictable periods of peak demand. For a start, robotics can help here through the redeployment of human workers to where they’re more urgently needed, says Dengel:
Our peak operations can be between 50% and 70% higher than our normal run rate, so the question for us is how do we ramp up for that and take the edge off? But on top of that, what we also gain [through automation] is better visibility: we’re able to tie information that automation technologies are collecting and process that in order to optimize and improve flow through our buildings.
So it’s not just physical manipulation and movement; it’s about understanding where product and equipment and assets are, where people are, tying it all in to the Internet of Things for monitoring, for optimization, to have people and resources in the right place and to give us an ‘eye in the sky’, central control point of view, rather than taking decisions locally.
When it comes to engaging with companies such as Vecna and Savioke, he adds, flexibility is a key differentiator for FedEx. After all, that’s where the return on investment on automation technologies is to be found, he believes:
We’re making big investments as a company and we make decisions based on how we see a particular platform being able to evolve. Our world is changing very quickly, year by year, and we’re not going to want to be swapping out this kind of equipment in the near term. So we take a platform approach, to give us a foundation, and figure out which providers are going to be able to give us the best flexibility to adapt to our changing environment.
That said, FedEx can certainly be seen as a first mover when it comes to new technologies. In March, for example, the company announced it had placed a reservation for 20 fully electric Semi trucks from Tesla, which are scheduled to begin production in 2018. It’s also been working closely with Peloton Technology on the concept of ‘vehicle platooning’, whereby groups of trucks linked by wireless vehicle-to-vehicle communication can be controlled by a single driver. But there’s one area which FedEx has no immediate plans to explore: drones. Dengel explains:
One question I always get asked is about drones: when is FedEx going to start delivering packages via the air? In all honesty, and our chairman [Fred Smith] has said this very publically, the answer is ‘No time soon.’ We move, just at ground level, around 10 million packages a day and another 6 or 7 million in the FedEx Express business. If you add that to what our competition does, that’s a lot of things flying around in the air. Oh and by the way, it all needs to arrive in perfect condition. There’s definitely a place for [drones], in emergency relief, niche applications, person-to-person kind of stuff maybe – but anytime soon, we don’t see it working for us, not just because of regulation, but more importantly because of the practicalities of it.
Image credit – FedEx
Disclosure – Dengel was speaking at PTC’s Liveworx event in Boston.