FedEx Follows Amazon Into the Robotic Future

KERNERSVILLE, N.C. — As soon as the first robot arrived at a FedEx shipping hub in the heart of North Carolina tobacco country early last year, talk of pink slips was in the air.

Workers had been driving the “tuggers” that navigated large and irregular items across the vast concrete floor of the 630,000-square-foot freight depot since it opened in 2011.

Their initial robotic colleague drew a three-dimensional digital map of the place as it tugged freight around. A few months later, three other robots — nicknamed Lucky, Dusty and Ned in a nod to the movie “¡Three Amigos!” — arrived, using the digital map to get around on their own.

By March, they were joined by two others, Jefe and El Guapo. Horns honking and warning lights flashing, the autonomous vehicles snaked through the hub, next to about 20 tuggers that still needed humans behind the wheel.

The robot team, part of the automation trend rippling through the worlds of shipping and online retail, was the first significant deployment of mobile robots inside a FedEx hub. Amazon and our e-commerce shopping habits are big reasons it’s happening.

In 2012, Amazon acquired a robotics company called Kiva. Since then, it has moved many of that company’s robots into its network of more than 210 fulfillment and package-sorting centers. Now, many Amazon partners and competitors are moving in the same direction, including big shipping and logistics operations like FedEx and DHL.

But what has happened at the FedEx hub may be a surprise to people who fear that they are about to be replaced by a smart machine: a robot might take your role, but not necessarily your job.

Yes, the robots replaced a few jobs right away. And in time, they will replace about 25 jobs in a facility that employs about 1,300 people. But the hub creates about 100 new jobs every year — and a robot work force still seems like the distant future.

“Everyone will have a job,” said Galen Steele, the senior manager who oversees the depot. “It just might be in a different place.”

As people have become more comfortable buying online, big and bulky goods like car tires, canoes and boxes as big as a coffin have accounted for an increasing percentage of the packages flowing through FedEx’s distribution centers, said Ted Dengel, who oversees operations technology for the FedEx Ground network, which includes 35 shipping hubs across the United States and Canada, including the facility in North Carolina.

These ungainly items can’t fit on a conveyor belt. That’s where the robots, which cost several thousand dollars and are made by a Massachusetts company called Vecna, come in.

Kernersville, the home of the FedEx hub, sits in the middle of the North Carolina Piedmont, the plateau between the coastal lowlands in the east and the mountains in the west, in an area that used to be known as the Tobacco Road. In the 20th century, it embraced textile and apparel manufacturing. But as automation has increased inside factories and textile work has moved overseas, the local economy has sputtered.

“In the middle of a boom elsewhere, things really aren’t that great here,” said Andrew Brod, senior research fellow at the University of North Carolina, Greensboro, who tracks the local economy. The local unemployment rate is 4.6 percent, modestly above the 4.1 percent national rate.

Mr. Brod estimates that the arrival of distribution centers like the one FedEx opened in 2011 has provided a boost, creating as many as 120,000 jobs, a majority of which go to workers with no more than a high school education.

And Mr. Steele, the manager of the FedEx facility in Kernersville, did not envision pink slips when he saw the first Vecna robot.

“I understand people thinking this will take their jobs,” Mr. Steele said on a recent Monday morning inside the hub. “But over time, they realize that is not the case at all.”

But those fears were not unfounded. In a recent report, the McKinsey Global Institute, a business research organization, predicted that about one-third of workers in the United States will have to switch occupations because of technology-driven automation by 2030.

“What people underestimate is the time needed for this to happen,” said Michael Chui, a partner with McKinsey.

Workers who once spent part of their time driving tuggers might spend more time lifting boxes onto trailers or stacking those boxes inside delivery trucks bound for other parts of the country. But over all, the work force inside the hub will grow, not shrink, Mr. Steele said.

For Mr. Steele, a 24-year FedEx veteran, this is just another step on a long and gradual climb toward greater automation — a march that began decades ago with automatic scanners and sorters. The North Carolina hub is already highly automated; more than 80 percent of packages move across the facility through a system of conveyor belts, scanners and sorters that needs no human labor.

When a truck filled with packages arrives, workers load the bulky items onto trailers hitched to a robot. Once these trailers are full, they press a button that sends the vehicle on its way. Equipped with laser-based sensors, cameras and other navigation tools, the robots stop when people or other vehicles get in the way. In some cases, they even figure out a new way to go.

But most of the work in this facility still requires human dexterity. Modern robots are not nimble enough to unload a truck filled with randomly sized boxes or pack those boxes onto a truck at the other end of the hub.

“People are remarkably good at handling lots of different shapes and amazingly good at fitting those things into tight spaces,” said Dave Clark, who oversees robotics work at Amazon. “Machines, today, can’t keep pace.”

These companies, however, will continue to automate as much of the process as they can. The online retail and shipping markets continue to grow, and with Amazon setting new standards for fast and inexpensive delivery, everyone else has to keep up. That means more shipping centers and more workers — both machines and humans.

The need for automation is particularly acute in areas with low unemployment. RK Logistics, a small company that runs a shipping warehouse in Livermore, Calif., — with the help of three mobile robots — has had trouble hiring. The pool of available workers is low — the local unemployment rate is around 2.7 percent — and it is hard to keep up with the salaries Amazon is paying in nearby Tracy. “We have 30 positions open at any given time,” said Rock Magnan, the company’s president.

And the desire of companies to rely on robots isn’t abating. FedEx is already exploring the use of robotics in the concrete yards outside its hubs, where workers move freight with forklifts and other vehicles, Mr. Dengel said. On the second floor of the North Carolina hub, where most packages race down conveyor belts, the company is preparing to install a system that can automatically recognize packages that need special handling. In the past, that also required a paid worker.

After testing five Vecna robots over the past several months, FedEx said it will begin testing 20 more with an eye toward replacing all the existing tuggers. It may then expand the program into other hubs across the country. DHL has reached a similar point, after putting mobile robots from two start-ups, Locus and Fetch, into two small parts of its worldwide operations.

With a six-year head start, Amazon is much further along. Mr. Clark said the company has deployed more than 100,000 Kiva robots across 26 distribution centers in the United States, Canada, Europe and Japan. And about 30 robotic arms, built by outside companies, are helping to lift and stow standard containers in a handful of facilities.

But even inside Amazon, the need for human labor is growing much faster than the robot work force. Since acquiring Kiva and deploying its first robots, Amazon has expanded its work force by 300,000 people.

“The biggest problem is not having enough people and I don’t think that is going to change,” Mr. Clark said.

Content originally published on https://www.nytimes.com/2018/03/18/technology/fedex-robots.html by CADE METZ