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Five warehouse trends to watch in 2024

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Five warehouse trends to watch in 2024

By: Sovereign Insurance

Warehouses are the heart of the supply chain, ensuring that goods and materials are stored and handled correctly before being shipped to their next destination. As technology advances and customer demands change, warehouse operators must look for ways to stay ahead. Here’s a look at five warehousing trends to watch this year and beyond.

Leaning into AI-driven data

Artificial intelligence (AI) is set to transform many aspects of warehousing. AI-powered systems can analyze large volumes of data collected from warehouses to enable better decision-making across their operations, from inventory management and demand forecasting to supply chain optimization. For example, insights can help to reduce stockouts, predict bottlenecks and optimize warehouse layouts, which can bring operational efficiencies and cost savings.^1,2

AI can also help operators use labour and equipment as efficiently as possible. On the labour front, AI provides insights that lead to more efficient allocation of workers. The technology can also prevent equipment problems or failures by predicting when maintenance is needed.³

More robots, more efficiencies

While using robotics to automate warehouse tasks is nothing new, it’s set for significant growth. Globally, the warehouse robotics market is to reach US$10.5 billion by 2028, growing at an annual rate of 11.4%.⁴ Among the factors driving growth are the e-commerce boom, rising labour costs, labour shortages and technological advances.⁵

While robots are traditionally used for tasks like sorting, picking, and packaging items, the latest models can plan their own optimal routes and picking sequences.⁶ More types of robotics are being introduced too, such as automated guided vehicles (AGVs), which help transport materials and supplies within a warehouse, and collaborative robots (or “cobots”) that work alongside employees.⁷

Although bringing robots on board has its challenges – high upfront costs and integration with legacy systems, for instance – the benefits are many.⁸ By automating tasks with greater precision, robotics help improve accuracy in order fulfillment. The technology also reduces time and resources spent on retrieving and transporting items around the warehouse.⁹

Worker health and safety levels up

By implementing more automation – thus relying less on humans to do strenuous or risky tasks – warehouse operators can reduce the risk of workplace accidents and injuries.¹⁰ At the same time, operators are turning to advanced technologies to keep workers on the floor safe.

One example is wearable technology such as smartwatches, safety vests, and helmets that monitor for health and safety issues. Some devices monitor workers’ heart rate and body temperature, triggering emergency alerts if fatigue or another health concern is detected. Additionally, some wearables have sensors that alert workers if they’re in the danger zone of a moving vehicle. ¹⁰

Drones are another example. These aerial devices can be used to perform safety inspections rather than requiring workers to climb ladders and scaffolding, reducing the risk of falls and injury. Drones can also be equipped with sensors to detect gas leaks, fires, and structural damage. They can also use thermal cameras to locate workers in danger and quickly notify emergency services.¹¹

The future is green and clean

The warehousing sector is primed for a green revolution. With large physical footprints, warehouses use vast amounts of energy for lighting, heating, cooling, and powering machinery, resulting in substantial carbon emissions. In addition, most warehouses use gas-powered forklifts, contributing to air pollution, while the large amounts of packaging used in warehouses often end up in landfills.¹²

To reduce their environmental impact, warehouse operators will increasingly look for green solutions. On the energy front, warehouses can switch to renewable energy sources such as solar, wind or geothermal power. They can also invest in energy-efficiency measures like LED lighting, which consumes less electricity and lasts longer than conventional lights. Automated control systems for lighting and temperature can be used to cut back on wasted energy, as they adjust based on real-time needs. When it comes to machinery, more eco-friendly options include electric or hybrid forklifts. To cut back on packaging waste, warehouses can move to recyclable, reusable or decomposable material.¹³

Supply chains go local

Manufacturers are increasingly realizing the importance of localized supply chains, especially given some of the challenges of globalization.

See: Is deglobalization the answer to supply chain woes?

As part of supply chain localization, companies place inventory in warehouses in the same country as their customers, allowing for faster delivery times, greater efficiencies, and cost savings. For example, a U.S. e-commerce company might place inventory in Canadian warehouses for customers in this market.¹⁴ There is also a growing trend toward nearshoring, a strategy in which a company moves all or part of its production closer to its main consumer market. Nearshoring can help companies save money and avoid some of the logistical challenges that can come with overseas supply chains.¹⁵

While it may not be realistic to embrace every trend today, staying on top of the shifts will help warehouse operators identify future opportunities and see where the competition might be headed. Expect to see more changes and opportunities in this exciting and fast-changing sector this year and beyond. Ensure your risk protection keeps pace with the advancements and changes being made.