United Parcel Service simply opened its largest warehouse, a sweeping 20-acre facility on the outskirts of Louisville, Kentucky. However don’t count on the break room to get too crowded.
The package-handling big plans to fill the $79 million facility with greater than 3,000 robots by the top of subsequent yr to deal with duties like lifting and cut back the necessity for guide labor. That degree of automation means UPS can run the warehouse with about 200 employees, that are anticipated to extend over time.
“It’s a linchpin of our strategy,” Invoice Seward, president of UPS Provide Chain Options, mentioned of the automated area. “It’s important to be able to deliver best-in-class cost and best-in-class service for your customers.”
Giant operators, together with UPS and GXO Logistics Inc., are utilizing the draw of automation to seize market share from corporations that run older services and rely extra on human employees. The robots enhance the velocity and accuracy of processing orders, maintain higher monitor of stock and save area by fetching merchandise which can be stacked larger within the constructing, Seward mentioned.
Gross sales at UPS’s logistics enterprise have climbed 11% within the first 9 months of this yr at the same time as total gross sales for Provide Chain Options, which additionally consists of freight forwarding and truck brokerage, fell greater than 22% amid a cargo droop. Seward mentioned the logistics enterprise has twice the working margin as its typical opponents, however didn’t present a quantity.
UPS declined to say what number of fewer employees are wanted in an automatic facility in contrast with a extra guide one. Kentucky Governor Andy Beshear’s administration mentioned the power may create 500 distribution and logistics jobs.
The robots assist enhance employee retention by about 30% and cut back accidents from lifting heavy objects and repetitive movement by 40%, Seward mentioned. The warehouse employees are separate from UPS’s predominant small-package supply enterprise and are non-union workers.
“They’re performing extremely effectively because the automated facilities have very high service and speed performance,” he mentioned.