PHOTOS: Brett Jelinik & Jeremy Liebman
Amazon, Target, Wal-Mart, FedEx, UPS are in a race to robotize; 80% cheaper
If you have a holiday job this year, count yourself lucky, even though it’s temporary and doesn’t pay a helluva lot. Holiday hiring is down, and it will most likely drop again next year.
Don’t blame the workers in China or Mexico. The malls, big-box stores, and e-commerce distribution centers are right here in the U.S., as are Fed-Ex and UPS, which deliver most of the e-commerce goods.
FedEx exemplifies what’s happening. Its holiday hiring is flat, even though it expects more business. That’s because it is automating its distribution centers.
Even big-box stores like Target and Wal-Mart are replacing workers with robots — not on the floor, but in the warehouses — as they compete with online merchandizers like Amazon.
Amazon has the jump on them all. The 45,000 stock-picking robots in a third of its distribution centers have replaced at least 135,000 workers — and have kept a lid on wages for the rest.
Now Amazon is going up against Fed-Ex and UPS, planning to build its own distribution network — much of it as robotic as possible, including final delivery by drone.
That means its cutting-edge facilities will be competing with the older, less automated facilities of FedEx and UPS, forcing them to robotize, too, or lose out.
Meanwhile, Wal-Mart has also been feeling the Amazon heat. In response, it has bought a competing online merchandizer, jet.com, to rev up online sales. And it’s doing this while it slows down opening new stores.
In fact, robotic warehousing is replacing not just the people who work there — or who might have worked there — but hundreds of thousands who work in the malls and shopping centers, causing lost business for Amazon and the like.
Some 3,500 shops in malls closed by Labor Day this year, laying off tens of thousands of sales clerks. Those closings are the most since the recession. And Macy’s has announced that it is closing 100 more stores.
When fashion chain Aeropostale threatened to close, Simon Properties, an owner of malls across the county, took the unprecedented step of buying the company to keep the 160 stores in its malls open.
All this robotizing is affecting more than just e-commerce. Rick Cohen, owner of the nation’s largest grocery distributor, C&S Wholesale, has introduced a new breed of robots into his food warehouses.
More than that, Cohen developed the robots himself and is now offering to automate the warehouses of suppliers like Coca-Cola. He says the robots cut warehousing costs by 80 percent — that is, they get rid of 80 percent of the warehouse workers.
The Wall Street Journal described Cohen’s operation: “The autonomous bots delivered products to less-mobile cousins in the warehouse. At the other end, robots ferried the cases to another area, where fixed robots arranged them into pallets, then shrink-wrapped them to be trucked to supermarkets.”
A generation ago, “there were a lot of folks who made careers working in warehouses,” a VP of the Kroger grocery chain told the Journal. Not anymore, he said.
Of course, this puts the remaining warehouse workers in a tough spot.
“Employers are looking to move more and more into automation,” says Steve Vairma, the head of the Teamsters Union warehouse division. “I think we’re going to be facing those challenges in contract negotiations in coming years.”
What he means, of course, is that the employers will be making demands for lower wages and fewer benefits. The workers are competing with robots now.
