Skip to content
Search AI Powered

Latest Stories

Warehouse automation services market to double by 2025

Equipment makers, integrators to benefit from demand for service contracts as more companies automate warehouse operations, researcher says.

Warehouse-Automation-Services-scaled.jpg

The global market for warehouse automation services is set to double by 2025, creating a “stable and lucrative” business for integrators and equipment makers, according to data from research firm Interact Analysis, released this week.


Growing demand for automation-related service contracts is in line with soaring demand for automation equipment, a market that topped more than $19.6 billion in revenue in 2020. Service contracts were worth $4.3 billion in 2020 and are expected to reach $8.7 billion globally by 2025. The increasing complexity of automation equipment and the pressure to avoid machinery downtime are driving the demand for service, according to the research.

“The research shows that the potential revenue generated from offering a lifetime service contract to an automation project is roughly equivalent to the original cost of the project. So, in broad-brush terms, a whole-life service contract could double the original revenue from the sale of the machinery,” the researchers wrote. “Furthermore, the research shows peaks and troughs in the service cycle, with the highs coming around the 5-, 10- and 15-year marks, corresponding to times when parts are likely to require replacement, and computers and control equipment to need upgrading.”

Automation service growth is strongest in the Americas and Europe, but is expected to catch up in Asian markets by 2024 due to changing market conditions and labor trends.

“In 2020, 80% of the revenues from automation machinery service contracts were generated in the Americas and in the EMEA (Europe, the Middle East, and Africa) region,” Jason dePreaux, principal analyst at Interact Analysis, said in a statement. “Historically, there has always been a much higher adoption rate of service arrangements in those two regions than there has been in the Asia Pacific (APAC) region–due to lower labour costs in Asia, expectations for maintenance to be included in the project sale, and robust in-house service capabilities by large e-commerce companies. But this situation is set to change. As worker expectations rise and wages level up in APAC, and other factors come into play, such as recent experiences with social distancing and the pandemic, we expect the region to be setting the pace where warehouse automation installations are concerned. Indeed we forecast that, by 2024, the rate of growth in the APAC service market will be faster than in the Americas or EMEA.”

Recent

More Stories

manufacturing job growth in US factories

Savills “cautiously optimistic” on future of U.S. manufacturing boom

The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.

While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”

Keep ReadingShow less

Featured

container ships at dock port of savannah

54 container ships now wait in waters off East and Gulf coast ports

The number of container ships waiting outside U.S. East and Gulf Coast ports has swelled from just three vessels on Sunday to 54 on Thursday as a dockworker strike has swiftly halted bustling container traffic at some of the nation’s business facilities, according to analysis by Everstream Analytics.

As of Thursday morning, the two ports with the biggest traffic jams are Savannah (15 ships) and New York (14), followed by single-digit numbers at Mobile, Charleston, Houston, Philadelphia, Norfolk, Baltimore, and Miami, Everstream said.

Keep ReadingShow less
EDGE 2024 diversity educational session

Diversifying your supply chain beyond China to minimize risk

Jason Kra kicked off his presentation at the Council of Supply Chain Management Professionals (CSCMP) EDGE Conference on Tuesday morning with a question: “How do we use data in assessing what countries we should be investing in for future supply chain decisions?” As president of Li & Fung where he oversees the supply chain solutions company’s wholesale and distribution business in the U.S., Kra understands that many companies are looking for ways to assess risk in their supply chains and diversify their operations beyond China. To properly assess risk, however, you need quality data and a decision model, he said.

In January 2024, in addition to his full-time job, Kra joined American University’s Kogod School of Business as an adjunct professor of the school’s master’s program where he decided to find some answers to his above question about data.

Keep ReadingShow less
warehouse problem medical triage strategy

Medical triage inspires warehouse process fixes

Turning around a failing warehouse operation demands a similar methodology to how emergency room doctors triage troubled patients at the hospital, a speaker said today in a session at the Council of Supply Chain Management Professionals (CSCMP)’s EDGE Conference in Nashville.

There are many reasons that a warehouse might start to miss its targets, such as a sudden volume increase or a new IT system implementation gone wrong, said Adri McCaskill, general manager for iPlan’s Warehouse Management business unit. But whatever the cause, the basic rescue strategy is the same: “Just like medicine, you do triage,” she said. “The most life-threatening problem we try to solve first. And only then, once we’ve stopped the bleeding, we can move on.”

Keep ReadingShow less
Preparing for the truckload market upswing

Preparing for the truckload market upswing

CSCMP EDGE attendees gathered Tuesday afternoon for an update and outlook on the truckload (TL) market, which is on the upswing following the longest down cycle in recorded history. Kevin Adamik of RXO (formerly Coyote Logistics), offered an overview of truckload market cycles, highlighting major trends from the recent freight recession and providing an update on where the TL cycle is now.

EDGE 2024, sponsored by the Council of Supply Chain Management Professionals (CSCMP), is taking place this week in Nashville.

Keep ReadingShow less