The Battle to Bring Robots into the Warehouse

Will the winner be America or China?

Benjamin Gordon
Aug 23 · 2 min read

by Benjamin Gordon, Cambridge Capital

In just a few years, robots have gone from science fiction to reality. In my opinion, nowhere will the impact be greater than in logistics.

The U.S. has historically enjoyed a global economic advantage in part due to superior supply chains. In 1956, Malcom McLean invented the modern intermodal shipping container. Beginning in 1979, deregulation of the U.S. transportation sector enabled companies to thrive in non-asset truck brokerage. FedEx spearheaded next-day logistics via its high-volume overnight center in Memphis. And is driving even more aggressive changes via its Amazon Prime membership program, conditioning consumers to expect same-day delivery.

Today we are in the world of digital logistics. Robotics is rippling through the supply chain, and automation is poised to reshape logistics. The global warehouse robotics market today is approximately $3bn, growing at close to 20 percent annually. Robots can be used for a variety of applications, including storage; retrieval; transportation; pick, pack, and ship; forklifts, and more. As e-commerce continues to expand, robotics adoption will also accelerate.

These trends will accelerate. The Chinese government has established a series of goals to transition from low-cost labor to high-value intellectual property. In 2013, China’s Ministry of Industry and Information Technology announced “Guidance on Promotion of Development of the Robot Industry.” China intends to produce at least 100,000 robots per year by 2020, as part of a program to build industrial parks and provide tax incentives to drive adoption. These policies are already starting to bear fruit, as robotics manufacturers such as ABB are now building in China.

As a result, robotics companies in China are flourishing. Shanghai’s Quicktron was founded in 2014. It won Alibaba as a customer and has scaled up to sell more than 5,000 robots since then. Geek+, another Chinese robotics startup, is in the midst of raising another $150m, from investors such as GGV Capital, D1 Capital Partners, and Warburg Pincus. Geek+ has won Xiaomi, SF Express, Alibaba and Suning as clients, and claims to have sold over 7,000 robots. And Chinese e-commerce companies such as JD Logistics and STO Express are also investing rapidly. This video shows automation at JD Logistics and STO Express. It is stunning to watch.

These robotics investments are giving China a technological edge that will translate into a supply-chain edge. Will the future belong to China?

Benjamin Gordon is managing partner at Cambridge Capital, a private equity firm investing in the supply chain and technology market. This article was originally published in SupplyChainBrain on August 22, 2019.

Supply Chains

Supply chains: the convergence of old-economy transportation and new-economy technology

Benjamin Gordon

Written by

Ben Gordon, CEO of Cambridge Capital and BGSA. Investor in logistics and supply chain technology. Published at Fortune and CNBC.

Supply Chains

Supply chains: the convergence of old-economy transportation and new-economy technology

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