Thanks to growing pressure on labor supply, fulfillment speed, and capacity, 3PLs are looking for new ways to streamline their operations and improve the client experience. As a result, supply chain automation has become one of the most popular investments by 3PLs in recent years.
By automating time-intensive, repetitive tasks, fulfillment automation has made it possible for 3PLs to upskill their staff, manage labor more efficiently, and most importantly, pass significant cost savings onto their customers.
This is why Ryder E-commerce by Whiplash has made the decision to invest in a Dorabot system at our Chino, CA facility, paving the way for more productive, cost-effective order fulfillment workflows for our clients.
It may be one of the world’s oldest industries, but the logistics space faces the age-old challenge of maintaining efficiency and cost savings – all while keeping pace with client expectations.
The COVID-19 pandemic may have departed the popular imagination, but it’s continuing to put pressure on supply chains. Although China’s zero-covid strategy is winding down, restrictions are affecting manufacturing and freight availability, leading to slowdowns in productivity that are challenging for businesses and 3PLs alike to plan for.
Against this backdrop, demand for industrial and warehousing space is only continuing to increase, with a national vacancy rate of just 3.2% for industrial real estate in 2021. This is due to the rapid growth of e-commerce over the past decade, which has seen large numbers of consumers pivoting to online shopping out of convenience and to access a greater range of product options. According to Statista, e-commerce sales are due to increase by 50%, from $907.9 billion in 2022 to $1.4 trillion in 2025.
Although additional warehouse space is under construction across the country, new distribution and fulfillment centers require a significant labor force. According to Supply Chain Brain, 78% of shippers and 56% of 3PLs reported that labor shortages have impacted their supply chain operations. Moreover, a 2021 Statista survey cited labor shortages as the second-biggest challenge for supply chain professionals.
With consumers still expecting ever-faster delivery times and unique brand experiences, e-commerce fulfillment partners cannot afford to let their service standards slide, lest they become unable to fulfil promises made to their clients.
So, what can 3PLs do to tackle these challenges and continue meeting consumer expectations?
Manual, repetitive workflows benefit the most from automation in the world of fulfillment. This includes everything from Warehouse Management Systems (WMS) to self-service return workflows that enforce return policies – eliminating the need for customer service representatives.
However, automation can play a role in more than just technology workflows. As robotics becomes more portable and available at more accessible price points, there’s a growing demand for robotic systems to simplify the so-called ‘heavy lifting’ of logistics management.
According to the 2022 26th Annual 3PL study, robotic systems in the areas of high-density storage, picking, and palletizing is the leading automation technology that 3PLs and shippers plan to invest in over the next three years. Peerless Research Group found that 23% of organizations surveyed were already using some form of robotic automation, while 28% plan to invest in robotics in three years or beyond.
In the challenge to streamline order fulfillment, parcel sortation has quickly emerged as one of the most significant pain points for 3PLs and parcel carriers alike.
Sorting and identifying parcels to divert them to specific destinations is a time-intensive process prone to errors and delays. With e-commerce continuing to exhibit steady growth even after the height of the pandemic, 3PLs need to gear up to handle higher small parcel volumes effectively over the long term for their clients.
This is precisely what Ryder E-commerce by Whiplash is doing by investing in a Dorabot, an AI-powered robotics solution that’s bringing faster, more cost-effective parcel sortation to its Chino, CA campus facility, which offers customers over 400,000+ square feet of high-volume retail store replenishment.
“We were looking for a sustainable, flexible sortation solution that could respond effectively to long-term challenges in the logistics industry, namely labor constraints and being able to free up our staff for more complex warehouse activities,” says Andrew Bagwell, VP of Engineering at Ryder E-commerce by Whiplash.”
Even older sortation systems are proving to be inefficient when faced with the demands of today’s e-commerce shopping habits. During peak season, major carriers such as FedEx and UPS have begun levying additional handling fees against shippers whose parcels don’t fit into their sortation systems, therefore minimizing the number of parcels that need to be sorted manually.
“Most traditional, large-scale sortation systems are not moveable or scalable enough to fit the needs of a fast-moving 3PL,” says Bagwell. “We needed the flexibility to move a solution around a facility to fit in with changing picking locations and different client needs. Dorabot has a compact footprint and is easily deployable in lots of configurations, such as sortation, picking, and palletizing, making it the perfect solution for busy, multi-client facilities like Chino.”
With peak season fast approaching, the engineering team at Ryder E-commerce by Whiplash wanted to be confident that Dorabot could achieve the scale required for high-demand clients during the holiday season. This pilot validated the forecast productivity savings, with a sortation rate of a thousand packages per hour. There are now plans for additional Dorabots to be deployed to additional facilities to increase efficiency and alleviate labor pressures.
“Our investment in the Dorabot technology is an exciting new development for Ryder E-commerce by Whiplash,” says Bagwell. “It enhances our ability to offer clients the most up-to-date technology and infrastructure on the market and ensures that we can continue to offer the very best brand experiences.”