A year ago, GXO Logistics chief investment officer Mark Manduca said in an interview with Modern Shipper that 100% of the company’s contracts signed in Q3 2021 involved some form of automation.
This November, those early automation gains are starting to show. On Tuesday, GXO (NYSE: GXO) announced that by the end of this year it will increase automation usage at its facilities by more than 50% compared to 2021, with approximately 7,600 technology units operational at customer sites. These include cobots and robots, vision scanners, driverless transport systems and goods-to-person robots.
“GXO is embracing more automation and robotics than ever because the benefits they provide are game-changing for our customers and our team members,” said Sandeep Sakharkar, GXO’s chief information officer. “The technology we use makes warehouse operations safer, more productive, more efficient and more cost-effective in times of high inflation, while educating employees.”
In July, GXO announced a multi-year renewal with 6 River Systems. The latter company’s robots, known as Chucks, will work alongside GXO workers. They are designed to reduce operator intervention and increase overall productivity. Prior to the transaction, GXO operated more than 900 6 River robots on its network. The agreement did not specify how many new systems would be added.
Manduca previously said that GXO is testing over 100 different technologies at its facilities to create customized solutions.
Watch: Mark Manduca talks about GXO’s earnings
“We will never, ever, create a standard solution in our special storage facilities,” Manduca had said. “It’s about value-added services. This is personalization on a whole new level.”
GXO has said that more than 30% of its revenue comes from automated websites, compared to an industry average of 5%.
“As the growth of the working-age population slows and the capabilities and cost-effectiveness of automation improve rapidly, the ‘roboconomy’ will continue to accelerate,” Sakharkar said. “Across our business, we are working with a growing number of customers to adopt technologies that allow for greater precision in inventory management and improve the speed and accuracy of order fulfillment, as we see the potential to achieve significant cost savings through automation, thereby unifying people Gaining a competitive edge is the customization that GXO offers.”
Last week, GXO announced that it had expanded its partnership with furniture maker Floyd. The companies opened a new GXO Direct facility in Horn Lake, Mississippi. The 120,000-square-foot facility is used to pick and pack large pieces of furniture, as well as to support kitting and returns management.
GXO Direct provides storage space when and where it’s needed, reducing fixed costs and eliminating the need for customers to invest in dedicated warehousing. The model offers the opportunity to bring products closer to end customers, reduce emissions and shorten transit times.
Last month, GXO announced it would hire 22,000 employees to support the holiday peak season. About half of that would happen in the UK, it said, where GXO recently completed its $1.3 billion acquisition of Clipper Logistics. GXO has over 950 facilities worldwide, more than 210 million square feet and 130,000 employees.
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