AutoStore shows that automation is future for logistics

Industry 4.0. Fourth industrial revolution. Digitalization of modern business process and using robots, online technology, Internet of thing etc. stock photo

AutoStore is seeing explosive growth for its robots. In its latest results, the Norway-based logistics automation company said that it saw its sales jump 95% year-on-year in the third quarter, to US$84.7m with an EBITDA (Earnings Before Interest, Depreciation and Amortisation) of $42.3m. AutoStore observed that it had an “order intake of $140m” and that it would see revenues of more than $500m in 2022.

AutoStore is now one of the most valuable companies in Norway, overshadowing the country’s shipping, logistics and oil field services providers. Its flotation on the Oslo stock exchange last month resulted in a capitalisation of over 100bn krone (US$11bn).

The underlying story is one of violently increasing demand for new automated logistics solutions. AutoStore says that it is focussing on e-retail at present with a particular attention to what it calls “Grocery Micro-Fulfilment Centres”, however, the company emphasises that in grocery retailing alone it is looking to penetrate the supply chain end-to-end, a market it estimates as being worth $230bn. In addition, it has also established a presence in other sectors, such as sports apparel, luxury and automotive but in parallel has sold to logistics service providers including DB Schenker, UPS, DHL, Geodis, K+N and DSV.

However, what often AutoStore receives most attention for is its battle over patents with the UK based Ocado, with both sides arguing over who came up with the idea of the distinctive square-shaped robots mounted on a ‘stack’ of tote-boxes that are the core feature of both companies’ grocery fulfilment-centre technology. AutoStore’s business model seems to differ from Ocado in that Ocado has its own retailing business as well as selling a complete integrated platform for e-retail rather than AutoStore’s ‘bolt-on’ solutions.

AutoStore’s growth illustrates is that almost all areas of logistics are becoming highly automated, with materials handling and warehousing being at the cutting-edge. The demand for automated solutions in fulfilment centres is already established amongst the largest retailers, however, the trend to automation will spread rapidly into other areas with medium-sized logistics service providers faced with the imperative to improve productivity through digitally controlled operations or go out of business.

Source: Transport Intelligence, 25 November 2021

Author: Thomas Cullen

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