In brief: Amazon has spent years investing in robots that work in its fulfillment centers around the world. Developing and deploying these machines costs millions of dollars, but a new report claims they could save the tech giant up to $10 billion a year by 2030.
Amazon’s use of robots in its fulfillment centers and warehouses goes back more than a decade, but it really started ramping up the numbers in recent times, increasing from 350,000 robots in 2021 to more than 750,000 by June 2023.
The robots perform virtually every task a human is able to do, from picking/packing and sorting items to transporting goods, inventory management, and storage, all of which make up about 60% of fulfillment costs.
As noted in a Morgan Stanley report, Amazon has developed six new significant warehouse robots in the past three years, covering almost every stage of the fulfillment process.
One of those robots is Digit. This bipedal, 5-foot 9-inch, 143-pound robot from Agility Robotics can walk forward, backward, and sideways, squat and bend, and move, grasp, and handle items using its arm/hand-like clasps.
In September, Amazon opened a new fulfillment center in Shreveport, Louisiana, that was the first to include all of the company’s latest robots. Morgan Stanley writes that it expects to see a 25% reduction in fulfillment costs at the site during peak periods.
According to the analyst’s report, if Amazon manages to fufil 30% of orders in the US through robotic fulfillment centers by 2030, it will save $4.5 billion to $9 billion annually. Should that figure reach 40%, the total savings could exceed $10 billion per year.
Creating these futuristic locations isn’t cheap. Amazon’s traditional fulfillment centers cost around $200 million to develop, while the next-gen versions cost around $450 million. Even retrofitting current centers into high-tech robot-filled ones costs around $100 million. But if Morgan Stanley’s predictions are accurate, the long-term savings make the spending worthwhile.
There’s little mention in the report of the impact these robots will have on human jobs. Both Amazon and the machines’ maker have tried to quell fears by insisting the robots are there to enhance, not replace, jobs – a statement often rolled out by companies adopting generative AI tools.
