Sep 22, 2016|
Robbie Whelan (WSJ, Warehouse Robots) by The Financial Exchange
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
Robbie Whelan is a reporter for the Wall Street Journal and he posted an article a couple of days ago that I'll read the headline. Fully autonomous robots the warehouse workers of the near future he joins us on the financial exchange now Robby welcome to the show. Are you good good thanks for joining us so Robby when you're doing your research for the story. How many workers I had no idea that how many workers are there just American workers that work in warehouses that. There's nearly 900000. People Americans who work in warehouses although. It should be said that got all of those are working Indian food distribution warehouse results included. Where else is attached to manufacturer's factories. E-commerce warehouse is of the companies like Amazon inaccurate things sort of crossed important so the Merck. Number refrigerated skiers are working for our members of the creature and put them yet that it's nearly 900000 people. And if theory in reading your article it sounds like robots are making a lot of those jobs obsolete. Yeah it's not totally clear whether it's a lot of those jobs or if you had done for now and then that's gonna republics Hillary in the coming years. But it's certainly is what might try is sort of particularly ridiculous story was that it's certainly something that. Many companies including some of the biggest ones to targets in the wal mart's. The world are looking as a as a as a way of saving money in sort of accommodating growth in demand. Without having to it is to spend a lot of money on on raising workers' wages and and and and building entirely new. Purpose facilities. One Amazon has done that right whenever they build a new warehouse it's always robotic correct. That's true although on Amazon's system is is polite about it completely able a couple of years ago what can you vote. Which was a Massachusetts based robotics firm Lucent was actually deliberately at MIT and there are about excited that's been done. You and there's a little bit different functions to leave the Boudreau about actually crawler on the scoreboard house. Distributions that are in the gravel shelf and bring it to a human worker. And that didn't work that takes product inputs and in the box and packed up into the Q your home. And it's a little bit less. A parliament is the word we use in the in the robotics industry described. What would describe tasks that can be carried out almost entirely by a robot and don't require human help. So it was on or about school board they have some of the most you know sophisticated. Brooke a lot of sized warehouses in the country they do also would depend very heavily on human labor concede that when policies general round when. There are hundreds and thousands of I mean thousands of of temporary workers to accommodate the big shopping rush around Christmas. You looked at another robotics company from New England called symbolic what can you tell us about symbolic because that's old that's a private company and it's not public. That's straight guys tailed they're they're based in Wilmington Massachusetts not far from Boston. And material but I got him Rick Cullen who is also the owner of a of a company called pianist wholesale grocers which is the biggest. Grocery wholesaler in in the country by delta what that means is you don't. A lot of warehouses across the country. That or start to win with products that mark needed at the stoppage shopper to Croker that giant brewer the Winn-Dixie and in the aid being put together big shipments of of products you know. Everything from get tipped coffee to. Two breakfast cereal that put it on these pilots and truck and into the various. Stores where they are sold. So it is so yeah he's working on. Yeah my impression from talking to him is that he was burning the students for a very long time. Which has very thin margins and it's it's very tough to sort of make him make a bucket to wholesaler. And one of the biggest costs that you have as a whole seller is secure labor force people were walking up and down on the I'll liquor warehouse every day ticket products and package them into Pallet. It's hitting them all of the stores. And also the speed that you so it's very costly to run a huge warehouse like the ones that he. Iran and so he invested in the companies symbiotic. Which. It was you know it's time startup. As a way of trying to find technology that can help them cut costs and and and boost his fortunes first first business. And since then the company's kind of growth in their sort you know there now spilling this technology to in the system they have which of these sort of huge. Middle include leaders told the teacher box and that gives the it robots they designed it sort of seemed on the aisles at speeds of 25 miles an hour picking and and retrieving and depositing very cases have sort of food products for them back to be loaded. Very efficiently five times as fast as human being to do it. And they. They've they've now started telling these systems to other other users so other grocery distribution businesses and other retailers such as target and government Coca-Cola. And and ended just sort of you know expanding the scope what this the technology can can do and that's why people sort of think this is something that could eventually be. Much more widespread as something. Community could could eventually the placement and more jobs. When you look at the cost of operating a robot I've looked at other studies and it was two dollars an hour vs whatever the wage cost was per worker. Didn't didn't symbiotic share with you the differential. We they did not because they're privately that there are surprised about some of those kind of financial data. But they did I was able to learn from other sources that this that because it's pretty costly to install these systems of puree if you have a big million foot square million square foot warehouse which is on the larger side for distributions senators. And you more and stolen their systems can cost as much as 406080. Million dollars. Which is a big investment for even even award should district distribution companies so. And what that means is basically bearer they're looking for sure. Payback of system to cost savings over the course of 46 years. So in other words he can do matter if you get out there you know forty particularly box. There how big it is so much you spend on it initially. That's paid back over from. Or over five years or so. He doesn't start being profitable so to speak until the statistics year or so that's it is a big investment in that fashion with a hurdles. Towards this becoming really really widespread it is it is just the idea that it's big capital investment and we haven't figured out a way to make it. Can make that kind of efficiency. Super affordable yet. Well and robot and robots haven't unionized strain. Me there's no risk of them forming unions. I title except as far as I know there's risked their stories and yet know that's a good contributed. Good point which is. A lot of warehouse workers because they'll work in the same place and they come back the same books say dipped date. Our are unionized and there's say there's long been tension between organized labor and and and the management of these kind of facilities because management is not. Didn't have the same interest typically is a worker groups due to the attitude of keeping the jobs in place keeping the jobs there and keeping them well paying and then and with good benefits. It's a social have you in our reporting it did talk to the Teamsters are one of the biggest warehouse. That you workers' unions. A condition of preparing truck drivers note its workers and they were very candid about how automation is is. Yeah it's not. Changing. There is there that are Europe's sitting their power you know there are there insolent and in the could should situations and certainly will be in this. And in the future as something is that is very much and their minds. You know the Robby you like you did a great job on the article we sure appreciate your taking time to join us on the show thank you. Trevor that's Robbie Whelan. And Wall Street Journal and you know these there's a lot of people responding on our tax board and whenever we talk about something like this people bring up the question chuck witches. Job elimination. Woody and do with the people that lose these low level jobs. In its a million jobs and in. And the fact is there's no easy answer for that but. The question in and here's the thing that you need to think about with the introduction and really the gradual. Use of more automation is. Historically. People had to work because there's no other way to get these jobs. When he talked veto it used to be you go back and it's OK you had to you know and deal with you know the the field yet the go and deal with the pigs yet deal with house where look at how many people used to work in the agricultural sector exactly so if you look at what's happened and agriculture over the last eighty years you about 20% of the workforce there. But it produces about three times as much food. Okay so the question becomes as as you go through this look if you can figure this out so that. Fewer people can push fewer buttons but still produce the same result what do you do with everyone else that's a court. Businesses can't answer that unfortunately knowledge it's an unfortunate it it it becomes survival of the fittest. You know it did every man for them or you have to figure out some kind of you know social contracts that he all of deal with each other which we're very good demeanor or not we're not go to that.