With demand for shipped products soaring during the COVID-19 pandemic and foreseeable future, the transition to warehouse automation is already underway - likely to displace warehouse workers and result in rising technological unemployment.
Supermarket chain Kroger opened its first automated warehouse in Bulter County, Ohio, last week, reported Hamilton JournalNews. The massive 335,000-square-foot customer fulfillment center is entirely run by robots and artificial intelligence that can put together an order of about 50 items in six minutes compared with 30 to 45 minutes it takes a Kroger employee to pick items from shelves.
The new $55 million automated facility is known as the "shed" and is the first of 20 planned.
The Cincinnati-based grocer completed its first order at the facility last Wednesday. Rodney McMullen, Kroger's chairman and CEO, told investors during Thursday's call:
"This marks the soft opening of the facility, and we look forward to our grand opening in early April.
We continue to be excited about the elevated experience that this will bring to our customers in the tri-state area and across the country as we continue to open additional facilities," McMullen said.
Kroger's partnership with U.K.-based Ocado has been an essential part of leveraging advanced robotics technology to run the supermarket chain's e-commerce segment.
An Ocado "shed" helps Kroger achieve faster delivery times compared to the in-store experience. It also lowers costs for the grocer.
The growing demand for grocery e-commerce by Kroger comes at a time when Instacart, otherwise known as the "personal shopper" app, mulls over robo-driven warehouses as they come to the same realization as Kroger that robots are more efficient and faster in fulfilling orders than humans.
The main takeaway is that fulfillment centers will one day be operated by robots and artificial intelligence no matter what the products are. Millions of working-poor Americans, mostly young and less-educated, have joined the ranks of Amazon and other e-commerce retailers as "pickers" in giant warehouses. Many of these jobs will be displaced in the coming years by automation as technological unemployment is set to soar. Maybe if Amazon employees unionize there would be a slower effort by the e-commerece giant to automate its warehouses.
This note is a warning to all warehouse workers that robots are coming for their jobs - perhaps now is the time to find a new occupation that will be less impacted by the economy's technological transformation in the 2020s.