Warehouse automation is now experiencing expansion in unexpected niches.
One of the most tedious but critically necessary logistical chores is measuring and weighing freight—whether it is a box, a pallet, or a shipping container. It has to be precise; no guesstimates allowed. Botch the dimensions and space is wasted; time, money and efficiency are all lost.
That’s true for all transport modes – ocean shipping, trucking, air cargo, barges or any freight that requires storage, warehousing packing, loading and documentation. Until the digital age dawned, “dimensioning”— as it is described in a single word—was a manual, time consuming exercise with ample opportunity for costly blunders and shipment-delaying mistakes. And with no rigid standardization or reporting.
Warehousing Automation Finds New Niches
The advent of computerization and now artificial intelligence (AI) and the scanner changed that. Plus, some technology visionaries and companies have refined and streamlined the process considerably and cost effectively. The long-time freight processor and warehouseman cited above, Jason Joachim, chief executive, and co-founder of Cargo Spectre in Houston, is one of those trailblazers. As the career warehouse operator-turned-technology entrepreneur put it in an exclusive interview with the American Journal of Transportation (AJOT), “warehouse automation is in our DNA.”
Cargo Spectre Freight Dimensioning System sounds exceptionally complex and costly, but Joachim insists it is “accurate and affordable” whether it is dimensioning pallets or parcels. While the market is crowded with competitors, the system is priced some 40% to 50% below its rivals. “We have made what was a $120,000 system 10 years ago into a $700 monthly service,” he contends.
But it does not shortchange users on features which includes 3-D scanning technology to “accurately calculate the precise dimensions of a pallet or parcel,” Joachim said.
For example, while the software system has a built-in scale to secure the exact weight of the shipment, Cargo Spectre also includes tiny, embedded cameras to record the physical condition of every pallet that moves through the warehouse, explains the CEO of the company.
But it doesn’t stop there, he maintains. The collected pallet or parcel is documented by saving it in the “database or cloud storage system of your choice.” Moreover, customers do not need a squadron of information technology specialists to install Cargo Spectre software, said the co-founder of the company, “The software can be integrated with any backend or cloud-hosted application in less than an hour,” said Joachim. And it is split second fast, he added. “Each pallet dimensioner, is capable of dimensioning, weighing and photographing any pallet in a couple of seconds.”
But those capabilities are more logistical than pure analytical. “Our process automation feature lets the system use AI to collect and analyze the data and make educated calls. This works especially well for air cargo which is four times more expensive to transport cargo than moving it by sea when you factor in fuel, crew and other expenses.”
Cargo Spectre’s Dimensioning has a huge advantage over manual freight handling, said the software executive. “Because it is costly and catastrophic to overload an airplane and disrupt the weight and load balance, we do a freight loading simulation on the ground—study and model it—before actually loading the cargo onto the aircraft.”
Warehouse Space: Going Vertical
For decades, warehouses and distribution centers were situated in suburbs and off freeways and expressways where owners could get lots of land and unencumbered access to thoroughfares, where commuter traffic was minimal, and automobile and 18-wheeler snarls did not disrupt schedules and fray driver nerves.
But urbanization, shrinking land parcels, the insatiable demand for swift, no-excuses cargo delivery to the front porch and not just a loading dock, where a shrinking scarcity of big rig drivers and the recent trend to accept runs and routes close to their home rather than bunking in at truck stops or sleeping in their cabs, has changed the face of trucking and of industrial real estate, specifically warehousing and DC’s.
Now, stir in not just computerization but advanced digital technology such as AI or machine learning and the basic warehouse — if there is such a thing anymore—is immediately transformed into a 24/7 AI laboratory.
The burning logistical question becomes where do you situate these structures, so they generate maximum productivity, profits and minimum waste and do not swallow up prime commercial and industrial real estate?
Robert C. Kossar, vice chairman of global real estate brokerage JLL (Jones Lang LaSalle) and head of its Northeastern (U.S) Industrial Region, told AJOT “we spend more time counselling (warehouse) occupants and owners on how the property will ‘fit’ a tenant’s operational and logistical needs.”
As he puts it, rather than just signing warehouse leases for industrial property owner-clients, “I focus as a player-coach on creative outcomes for others. Clients who are successful in making strategic real estate are well positioned for broader success.”
Kossar was an early enthusiast and expert in the benefits of multi-story warehouses and distribution centers in markets where space is at a pricey premium and trade and transportation is a high-volume, high-density, year-round business. The first examples of multi-level warehouses appeared in Asia 20-plus years ago. The world’s largest San Francisco-based logistics real estate investment trust and owner, Prologis, pioneered that specific marketspace with vertical properties in industrial land- scarce Far East and developed the first vertical warehouse in the U.S. in San Francisco five years ago.
Kossar, a 25-year veteran of commercial real estate who is based in JLL’s East Rutherford, New Jersey, office, isn’t reluctant to talk. He first spotted high rise freight warehouses when he was in Shanghai and Tokyo. “They were built close to the city center, and they were very efficient from a design and operational standpoint,” he recalled.
Since then, Kossar and his senior JLL colleagues have amassed a reputation for expertise in marketing vertical warehouses in the U.S. and consulting with tenants who can benefit from the logistical advantages they offer.
Location still reigns supreme as the primary consideration in any real estate transaction and even more in multilevel warehousing. There are realities that simply cannot be altered. Kossar tells of a “state of the art” one million square foot vertical distribution center at 2505 Bruckner in the New York City borough of the Bronx.
Another multi-level warehouse property in Long Island City was creatively designed. “The first two floors were industrial space, the third floor were entertainment spaces, and the upper floors were studio spaces,” he said.
Kossar also said there is a six story vertical warehouse in Queens and a three story 397,000 square foot multi-level industrial property in the Red Hook section of Brooklyn which is fully leased to e-commerce giant Amazon. Two other massive multi-story warehouses are slated for completion in the Bronx in early 2024.
Multi-level warehouses are a reality or under development in densely populated cities like Chicago, Seattle, San Diego, and San Francisco. In many cases the properties are targeting e-commerce giant Amazon as a sole tenant. (Prologis opened the first U.S. multi-story warehouse in Seattle some five years ago. It is a three-level, 590,000 square foot facility near the Port of Seattle and close to rail connections).
Warehouse Automation: Drones Take Flight
Innovative, automated warehouses are not confined to marquee high-tech cities. One 27-person, five-year-old warehouse inventory management software concern —Gather AI – is headquartered in Pittsburgh and the three founders have stayed with the venture to grow it rather than cash out.
Interestingly, the founders, then all graduate students at Carnegie Mellon University in Pittsburgh, developed what the company claims is the “first guaranteed safe full-scale autonomous helicopter, funded by the Defense Advanced Research Project Agency (DARPA), and tested at the FBI training grounds in Quantico, VA. The helicopter could avoid obstacles, land itself, cover 10 kilometers in three minutes and build a 3D map of its environment.” Said co-founder Sankalp Arora: “That’s when we realized drones are excellent data gathering machines.”
Gather AI’s founders also realized the helicopter format could be scaled down to a drone size that could navigate the inside of a cavernous warehouse said Arora and take automated inventories. With a venture capitalist in its corner, the start-up acquired an established company in autonomous inventory management called Ware, vaulting Gather AI to a spot as the “world’s largest software player in the space,” the company contends.
In an interview with AJOT, Arora capsulized Gather AI’s modus operandi. “We do not develop the autonomous, commodity drones. We supply the software that allows the drones to fly through warehouses with no Wi-Fi or GPS, in the dark and in very narrow aisles. The drones photograph inventory stored in pallet locations and the pictures are uploaded into the Cloud where the AI reads barcodes, text and other photographic information and compares it to what’s in the warehouse management system.”
As a result, warehouse employees no longer spend, he continues, “long, tedious hours doing manual inventory counts working on forklifts. There is less likelihood of misplacing products. Gather AI is up to 15 times faster than manual cycle counting.”
Rather than market directly to company warehouses and distribution centers, Gather AI sells its inventory management software mainly to third party logistics (3PL) companies that provide warehousing services to a variety of their clients.
For example, Gather AI, working with 3PL Barrett Distribution Centers had a challenging assignment when its client, U.S. based high end global sneaker and apparel company called Stadium Goods, came aboard. Barrett housed in its warehouse 450,000 to 500,000 individually serialized and bagged shoe boxes stored in very narrow aisles.
Gather AI’s software, powering the warehouse’s robotic drones, scanned the individual shoeboxes, so Barrett Distribution was able to provide its footwear client with a 99.95% to 100% inventory count “accuracy rates” on a weekly basis, said a Gather AI statement. It also freed up warehouse staff who were previously doing manual counting so they could work on other value-added work, resulting in “efficiency gains,” said Arora. How efficient? The co-founder said the Barrett Distribution facility was able to reassign six forklift operators to other warehouse chores when one drone took over their inventory management responsibilities.
