Logistic robots are projected to grow Globally at a CAGR of 18% until 2021

Globally, 115,000 logistic robots were installed in 2018, valued roughly USD 3.9 billion. Logistic robots are projected to increase considerably during 2019-21 to 485,000 units at a CAGR of 18%.

Definition / Scope
Market Overview
Top Market Opportunities
Market Trends
Technology Trends
Pricing Trends
Other Key Market Trends
Market Size and Forecast
Market Outlook
Technology Roadmap
Distribution Chain Analysis
Competitive Landscape
Key Market Players
Strategic Conclusion
References

Definition / Scope

The Oxford English Dictionary defines a robot as “a machine capable of carrying out a complex series of actions automatically, especially one programmable by a computer”.

Logistics robot is defined as a robot with one or more grippers to pick up and move items within a logistics operation such as a warehouse, sorting center or last-mile.

The introduction of robots in logistics and transportation has made significant developments in many industries especially manufacturing and last mile delivery, to name a few. These robots can transport load ranging from a lightweight to 100 kilograms. Such application increases efficiency as well as reduce operating cost.

The areas of application include but not limited to transport, handling, packaging, sorting, and delivery. These robots are also used in offices, hospitals, post offices, airports, and other public institutions in which the transport and delivery of various goods are necessary. The safe navigation equipped with sensors automatically guides the pathways for robots and these robots stop when there is an obstacle on their way.

Market Overview

Robotization is approaching the tipping point making a widespread presence of robots in warehouse and logistics. It is so rapidly increasing those data shows robotization of logistics will make millions of direct human jobs disappear. In the EU alone, 1.5 million direct jobs will disappear in the next 10 years as a consequence of robotics application.

A collaborative robot (also called a cobot) is designed to work with a human operator, positioned near them in a shared workspace. For example, the operator and robot may work sequentially in an assembly line. According to a new study published the cobot sector is expected to increase roughly tenfold between 2015 and 2020, reaching over USD 1 billion.

The research finds that just 5% of current warehouses are automated still these are mechanized, which is different from robotization. The global logistics industry accounts for USD 5 trillion economies.

Areas of application in logistics:

Trailer and Container Unloading Robots: To save on transportation cost, robots are being used to carry and shift standardized shipping containers. The labor-intensive process of loading and unloading at ports is now replaced with robots.
Stationary Piece Picking Robots: The robots pick up a shelf of goods and bring the entire shelf to the picker who stays in one spot, effectively turning these humans into stationary assembly line workers in warehouses.
Co-Packing and Customization: Retailers have been deploying robots customize the process which involves opening a box of products, taking out the items, doing something simple to them like putting on a sticker, and then packing the items back into the box.
Home Delivery Robots: In 2015, a startup company in London, UK, called Starship Technologies announced that it will begin building and selling parcel delivery robots. Another prototype that is going under testing phase is led by Google to deliver coffee in the homes of Australia. Zipline is already delivering blood and other emergency medicines in the remote villages of Rwanda.

A. Industrial Robotics

The industrial robotics market is expected to grow from USD 44.02 billion in 2018 to USD 69.14 billion by 2023, at a CAGR of 9.45% during the forecast period while the service robotics market is estimated to rise from USD 11.27 billion in 2018 to USD 29.76 billion by 2023, at a CAGR of 21.44% during 2018-2023. The five major markets including China, Japan, South Korea, the United States, and Germany represent 73 percent of the total sales volume.

Japan´s share in global robotics delivery captures 56 percent in 2018. This makes Japan the world´s number one industrial robot manufacturer. Robot sales in Japan increased by 18 percent to 45,566 units.
Robot deployment in the United States mounted to reach 33,192 units.
Korea is by far the third largest country and the number one when it comes to robot density in the world with more than 8 times the global average amount.
China holds significantly leading position after Japan with a market share of 36 percent of the total supply of 450000 units globally in 2018. By 2020, China is forecasted to manufacture 150,000 industrial robot units and have 950,300 industrial robots in operation.

The production volume of industrial robots has grown considerably since 2015. More than 253,000 industrial robots had been produced worldwide in 2015.

The number reached 294,000 units in the following year and 381,000 units in 2017. In 2018, there has been total manufacturing of 450,000 units of industrial robots with 7.5% growth from the previous year and the unit production estimated to reach 553,000 in 2020.

B. Service Robotics

The year 2018 saw robust growth in the number of service robots sold marking 165300 units with 50% growth rate than the previous year. The total number of service robots sold in 2017 rose dramatically by 85% to 109,543 units with sales value reaching USD 6.6 billion.

The number stood 59,269 units in 2016. In 2015, the total numbers of service robots sold were 41,060 units up from 32,939 in 2015. The sales value hit USD 4.7 billion in 2015.

Top Market Opportunities

Outdoor Applications: Although today’s robots are typically restricted to indoor, closed-course, or warehouse environments, these precursors may soon pave the way for robots to take over the airport, yard, and port logistics in order to reduce congestion and improve employee safety.

An increasing number of airports are gradually switching towards use of robots replacing the human workforce. Kansai International Airport and Osaka International Airport are just the two examples where robotic trial has been tested to cut passengers check-in times by moving robots to the most congested areas in airports in contrast to the conventional way of travelers standing in queue for a single point check-ins.

The fully autonomous robots move to the areas in the airport by using AI and GPS navigation and they even response to collision avoidance. Similarly, Leo of Geneva airport is a bag-drop robot that hangs around at the drop-off point as the traveler steps out of a taxi.

Traveler can place his suitcase onto Leo’s belt and by scanning the boarding pass with a handheld scanner Leo prints a bag tag that is attached to the suitcase handle, a door closes with the suitcase secured inside, and then the robot prints out a baggage receipt.

This system enables travelers not to drag their luggage around. Robots are also used for cleaning and maintenance. Incheon Airport in South Korea and Changi Airport in Singapore, for examples have deployed Airport Cleaning Robot, which is a large vacuum cleaner fitted with cameras, light sensors, and sensor-laden bumpers which moves around the airport vacuuming up rubbish.

By 2030, robots are expected to replace the human at the airport check-ins. At Gatwick Airport in London, robots are being on test for autonomous parking robot that slides a large, slender bed beneath vehicles and totes them to spots in the lot.

Gatwick Airport plans to cut 170 of the 2,350 self-parking spots that are currently in a lot to create 270 robot valet spots for the trial effectively adding 100 spots.

Passengers will drive their cars into one of eight numbered cabins, confirm their parking reservation on a touch screen, and take their keys with them as they leave. Then, a robot will take the car to a spot in a secured lot.

Robotic packing: Packing is one of the most common logistics tasks, everything shipped must be packed. Robots can be used for many of the several steps in packaging. At first, products are packed into individual packages. This is often done by the manufacturer. The next two steps of secondary and tertiary packing involve packaging into larger boxes which could be carried out by the logistics robots.

At Amazon warehouse, Kiva robots move the products ordered by customers to the other end of the warehouse at picking stations where robots quickly pick items off shelves when a customer order comes in.

Robotic ports: One of the future robotic-logistic applications is robotic ports to load and unload cargo onto ships. It will use autonomous cranes and self-driving container vehicles to perform all the functions of a cargo port, but with no humans on site.

TraPac terminal and Port of Long Beach are among the first U.S. ports experimenting with robots to keeps good flowing into and out of ports. These massive robotic cargo handling technologies are not only seen in U.S. ports but many ports in China are also adopting such tools to automate the cargo logistics near seaports.

Market Trends

The growth of online retail: The online retail industry is doubling to USD 4 trillion in 2020 from the current USD 2 billion globally. Data predicts a 10% year-on-year growth for online retail in Europe and the US. Online growth in Asia is even faster; for instance, by 2020, the online retail market in China is projected to be equal to that of France, Germany, Japan, the UK, and the US combined. This growth directly affects the requirement for logistics labor since online retail typically needs more labor per item sold than conventional brick-and-mortar retail. Moreover, one of the biggest challenges facing the logistics industry today is labor shortage. Research shows that over the next fifteen years Germany alone could see a labor deficit of up to 10 million workers. Also, over the next thirty years, the US will need 35 million more workers than will be available. To fill this gap, robots are proved to be the efficient source of logistics.
Faster delivery or product movement rates: A survey shows that 56% of millennial consumers aged 18-34 expect a same-day shipping option while shopping online. Still, most of the companies are not able to fulfil customer’s demand at last-mile deli delivery since they are dependent on manual labour force for delivery of goods. However, robots as a digital labour could effectively meet this requirement and unicorn companies like Amazon and Alibaba are already using drones for the fastest delivery.
Demand side business driver: In the long run, implementation of robotics in logistics significantly reduce operating cost while increase productivity. Similarly, it enables companies to run their services with a greater flexibility at optimum capacity. Adoption of these technologies is currently at 34%. However, adoption is predicted to reach 53% over the next two years, and 73% over the next five years.
Labour Market: The adoption of robotics is dependent on the demand and supply dynamics of manual labour. A higher potential level of adoption of robotics is seen in nations which exhibit ageing populations and a higher per capita wage, such retiring workforce could be replaced by higher degrees of digital labour, also called robots. On top of this, improvement in workplace safety with regards to robots will certainly play a critical role in terms of the pace of adoption. The number of the aging population above 65 years, for instance, exceeds 28% of the total population in Japan. By 2050, it is projected that this number will account for more than 40%. Likewise, the minimum labour wage in China has been steadily rising measuring in the bracket of USD 1.79- USD 2.98 (RMB 12-RMB 20) in 2018. The minimum hourly rate was below RMB 12 in many provinces of China before 2018.

Cost and User friendliness

The resistance in adopting advanced technology is tied to cost, expertise and a lack of understanding of how they could produce an attractive return on their investment—both upfront and ongoing through maintenance and programming of new tasks.

Top reasons for limiting investment in robotics technology include their cost-effectiveness and no need. The smaller companies are still struggling with their adoption and are slower to adopt new technologies. The cost of entry is somewhat high, and they have trouble making the leap either because of staff or because of the cost.

Technology Trends

Drone

Drone delivery is one of the hot applications for Unmanned Aerial Vehicles and companies like Amazon, Google, FedEx, Alibaba and Walmart have come out with the deployment of such drones for fulfilling “last-mile” delivery challenges and are running test-programs.

Pricing Trends

The adoption of robotics is becoming viable in terms of cost and return as the cost per unit is gradually reducing each year. In Europe, per unit cost will be halved.

Currently, it costs USD 130,000 per unit on average. This cost includes equipment USD 22,000- USD 56,000 (EUR 20,000-50,000); the environment (marking, security, adaptation of the warehouse, etc – up to USD 56,000 (EUR 50,000) – though this is becoming increasingly unnecessary with current solutions); system costs USD 50,000 (EUR 45,000), project management (approximately 10% of the total cost).

The total cost of robotic solutions is falling due to the drop in equipment and integration costs. Now, the least expensive robot costs USD 22,000.

Other Key Market Trends

Growing investment

In 2015, China has collaborated with Russia to develop USD 200 million robotics research center and startup incubator. Similarly, Japan has also announced the creation of the Robot Revolution Initiative Council backed by 200 companies and universities, the council’s five-year plan whose aim is to deepen the use of intelligent machines in manufacturing, supply chains, construction, and healthcare, while quadrupling Japan’s annual robotics sales from USD 5 million to USD 20 billion by 2020.

Region-wise market dominance

Europe remains the most significant region in terms of demand for service robots, accounting for 31.36% market share. It is followed by North America that captures 25.50% share. Asia ranks third with 13.57% share for service robotics.

Market Size and Forecast

The total of 69,000 logistic systems was installed in 2017, 162% more than in 2016, accounting for 63% of the total units and 36% of the total sales (in value) of professional service robots.

The value of sales of logistic systems was estimated at about USD 2.383 million in 2017 and increased by 138% compared with 2016. In 2018, total unit sales of professional service robots increased by 66% to about 115,000 units with a value of almost USD 3.9 billion.

From 2019 to 2021, nearly 485,000 units are projected to be sold with CAGR of 18%. The value of such units will exceed USD 10 billion by 2021.

Market Outlook

The global warehouse robotics market was valued at USD 3,041 million in 2018. The warehouse robotics market is projected to grow at a CAGR of 11.6% and is forecast to reach $5,186 million by 2023.

Global spending on robotic process automation (RPA) software reached USD 680 million in 2018, an increase of 57 percent year over year, RPA software spending is on pace to total USD 2.4 billion in 2022.

Globally, the sales value of logistic robots will reach USD 10 billion by 2021. Logistic robots are projected to increase considerably during 2019-21 to 485,000 units at a CAGR of 18%.

Technology Roadmap

Grasping technology

For warehouse automation, current robotic picking systems are still far from replicating human performance in grasping random objects in unstructured environments.

In 2017, RightHand Robotics unveiled a solution called RightPick that can pick items at a rate of 500 to 600 per hour, on par with a human worker. It uses a machine learning background and a sensorized robot hand to recognize and handle thousands of items.

Machine learning and artificial intelligence will impact logistics automation well beyond machine vision’s benefits to picking technology. These spurring technologies will be greatly enhancing the flexibility and ease-of-use of a wide range of automated systems in the next five years.

Distribution Chain Analysis

OEM manufacturers: The leading manufacturers of robots include ABB, FANUC, KUKA, and Yaskawa Motoman. Most of them have a dominant market in Europe.
Materials: Most of the materials for a common robot include controllers, sensors, and component parts such as motors, pistons, grippers, wheels, etc. sourced from different parts of the world.
Customers: Customers in the logistics industry comprise manufacturers, retailers, and private consumers both from B2B and B2C segment.

Competitive Landscape

ABB, FANUC, KUKA, and Yaskawa Motoman remain on top. They all serve ‘industry 4.0’ through automotive manufacturing, which is the first and still the biggest user of robotics.

Europe remains the leading region for robots companies. Out of the top 700 companies, 31.36% have a presence in this region.
North America is the second most popular region for many robot producing companies. The companies operating there constitute 25.50% of the global market share.
Asia-Pacific is the third emerging place for robotics output volume.

China has significantly expanded its installation of 138,000 industrial robots. Chinese robot accounted for one-third of the global installation in 2017.

South Korea is the second biggest market in the world. About 40,000 units were sold in 2017. South Korea has the highest level of robot density in the world.

In Japan robot sales reached to 46,000 units in 2017, reaching the highest level since 2006 (37,400 units). Japan is the predominant robot manufacturing country.

In the United States, robot installations crossed 33,000 units (2017). The driver for this continued growth since 2010 was the ongoing trend to automate production in order to strengthen the competitiveness of American industries in overseas markets.

Germany is the fifth largest robot market in the world and by far the largest in Europe. The annual supply and operational stock of industrial robots in 2017 were 21,000 units.

Key Market Players

ABB

ABB is one of the world’s leading provider of robotics and industrial automation solutions. Its robotics business offers robots, controllers, software systems, as well as complete robot automation solutions. The company’s products are specifically used by tier 1 OEMs in the automotive sector as well as by others in the general industry. It has the market capitalization of USD 40.23 billion as of 2019 and has a 43% market share.

Hangzhou Hikvision Digital Technology Co. Ltd

Hangzhou Hikvision Digital Technology Co. Ltd. is increasingly focusing on industrial robots that leverage its expertise in video surveillance products. The company is currently focusing on warehousing robots, transferring robots, sorting robots, parking robots and software platforms.

The two flagship products include a warehousing robot ‘Crossroad’ and a smart parking robot. The company has a market capitalization of USD 48.78 billion as of 2019 and enjoys a 35% market share globally.

Fanuc

Headquartered in Yamanashi, Japan, Fanuc Corporation was founded in 1972. The company provides factory automation products worldwide. Fanuc is one of the largest makers of industrial robots in the world with robot sales of over USD 1.6 billion.

Fanuc has a diversified portfolio and supplies a broad range of robots from arc welding robots to materials handling robots to painting robots. It’s market capitalization stood USD 33.03 billion. The company maintains an 8% market share worldwide.

Univarsal Robots (Teradyna)

In 2015, Teradyne (TER) acquired the leading collaborative robot (cobot) manufacturer in the world called Universal Robots (UR), for USD 285 Million. As of 2019, it holds market capitalization of USD 6.9 billion. It has roughly 60% of the global market share.

KUKA

KUKA Robotics offers a broad range of highly modular robots, covering all common payload categories, from 3 kg to 1000 kg. The company has a market cap of USD 2.19 billion as of early 2019.

Yaskawa Motoman Robotics

YASKAWA Electric Corporation was founded in 1915 and is headquartered in Kitakyushu, Japan. YASKAWA’s major segments include motion control, robotics, system engineering, and others. Yaskawa is Japan’s second largest vendor of industrial robots. The company has a wide presence in the Americas, Europe, the Asia Pacific, and Africa. The company has shipped over 300,000 robots since releasing Japan’s fully electrically-driven industrial robot in 1977. Yaskawa’s market capitalization stands at USD 8.17 billion in early 2019.

Other prominent vendors

Adept Technologies
Apex Automation and Robotics
Denso Robotics
Epson
Honda
Mitsubishi Electric
Nachi Robotics
Pari Robotics
Rethink Robotics
Stabuli
TM Robotics
Yamaha Robotics

Strategic Conclusion

Logistics robot provides versatile benefits in logistics and supply chain activities ranging from improving the efficiency of the warehouse, reducing the cost of labors in the long run, to fast last mile delivery.

Despite the high investment of installation, this can be amortized much faster since these robots work 24 hours. Nevertheless, the deployment of robotics will inevitably replace millions of jobs in many industries, therefore governments and industries should be prepared for such transition.

The declining rate of per unit cost of a robot and the increase in productivity, in the long run, while steadily increasing the cost of labor will demand robotization in the coming years.

Booming online retail where a large number of small packages needs to be delivered each day and provided the labor challenge in the near future, robots could possibly help combat such issue.