Amazon is rolling out new warehouse robots

Online retail giant Amazon has introduced new machines in several of its US warehouses that scan and box items to be sent to customers, according to Reuters. The company has started adding the machines — which are known as the CartonWrap and made by Italy’s CMC — to select warehouses and is considering expanding the rollout.

Amazon's Quarterly Shipping CostsBusiness Insider Intelligence

The machines can reportedly replace at least 24 jobs at each location they’re installed. If installed in all of Amazon’s 55 US fulfillment centers, they could replace 1,300 total workers.

Here’s what it means:Amazon is broadening its warehouse automation efforts, which were previously centered around ground-based robots that assisted human workers. In 2012, Amazon purchased Kiva Systems, a warehouse robotics manufacturer, and subsequently deployed its technologies across its broad network of warehouses.

These robots are used to transport pallets of inventory from one location to another. More importantly, they’re designed to work in tandem with human warehouse workers — a worker must place items on the robot — rather than replace them altogether.

Amazon’s efforts to roll out the CartonWrap machines signal an expansion of its warehouse automation efforts with the aim of creating a cheaper and more efficient supply chain. The machines can box 600-700 boxes per hour, which is about 4-5 times the rate a manual human packer can. In addition, Amazon reportedly expects to recover the up-front costs of the machines — each costs about $1 million — in under two years.

The bigger picture: Amazon’s broader warehouse robotics usage could be part of a larger push to shift its logistics workforce out of the warehouse and into the last mile.The company separatelyannounced that it would pay workers up to $10,000 each to quit their jobs and set up their own delivery businesses as part of its Delivery Service Partners program.

Initially launched about a year ago, the program helps provide Amazon with a reliable stable of delivery partners for its ever-increasing stream of packages. Taken together with the warehouse robotics initiative, it appears Amazon wants to reallocate its supply chain jobs away from warehouse workers and toward delivery couriers. In fact, an anonymous source speaking to Reuters described the company’s efforts as trying to “re-purpose” workers.

With its rising shipping costs and recent promise to offer free next-day deliveries to Prime members, Amazon likely turned to expanding warehouse automation to reap the largest near-term ROI. Rote warehouse tasks like picking and packing are the most automatable aspect of the logistics process, which indicates why Amazon would focus its robotics deployment within the warehouse.

Last-mile delivery, however, presents a significant challenge to automation as of now, and still requires significant humanpower. Amazon has therefore chosen to automate in an area where it can reap the benefits more immediately. Time is of the essence, as driven by surging sales, Amazon’s quarterly shipping costs continue to rise year-over-year. The firm’s recent promise of next-day shipping as its standard shipping option for its Prime rewards program has intensified the pressure.

Amazon needs a near-term solution to these problems, and the boxing robots could provide just that, by making its supply chain more efficient and freeing up more resources to be used for last-mile delivery.


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