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‘Roboconomy’ infiltrates GXO Logistics facilities

Contract logistics firm has doubled automation use in past year

GXO Logistics said it has doubled use of automation in facilities and is operating nearly 7,600 pieces of technology. (Photo: GXO Logistics)

One year ago, in an interview with Modern Shipper, Mark Manduca, chief investment officer for GXO Logistics, said that 100% of the company’s contracts signed in Q3 2021 included some type of automation.

This November, those early automation gains are starting to show themselves. On Tuesday, GXO (NYSE: GXO) announced that by the end of this year, it will have increased automation use in its facilities by more than 50% over 2021, with approximately 7,600 pieces of technology operational at customer sites. This includes cobots and robots, vision scanners, automated guided vehicles and goods-to-person robots.

“GXO is deploying more automation and robotics than ever because the benefits they deliver are game changing for our customers and our team members,” said Sandeep Sakharkar, chief information officer for GXO. “The technology we’re deploying makes warehouse operations safer, more productive, more efficient and, in a time of high inflation, more cost-effective while upskilling the workforce.”

In July, GXO announced a multiyear extension with 6 River Systems. The latter company’s robots, known as Chucks, will operate alongside GXO workers. They are designed to reduce human operator intervention and increase overall productivity. Prior to the deal, GXO operated more than 900 6 River robots across its network. The agreement did not specify how many new systems would be added.

Manduca had previously said that GXO was testing over 100 different technologies in its facilities as it sought to build customer-specific solutions.

Watch: Mark Manduca discusses GXO earnings

“We will never, ever, in our dedicated warehouse facilities, create a boilerplate,” Manduca had said. “It’s about value-added services. This is personalization to a whole new degree.”

GXO has said that more than 30% of its revenue comes from automated sites compared to an industry average of 5%.

“As growth in the working-age population declines and the capabilities and cost-effectiveness of automation rapidly improve, the ‘roboconomy’ will continue to accelerate,” Sakharkar said. “Across our business, we’re working with more and more customers to apply technology that enables greater precision in inventory management and improves speed and accuracy in order fulfillment because we see the potential to realize substantial cost savings through automation and gain a competitive edge through the customization GXO provides.”

Last week, GXO announced it had expanded its partnership with furniture maker Floyd. The companies opened a new GXO Direct facility in Horn Lake, Mississippi. The 120,000-square-foot facility will be used for picking and packing large furniture items as well as supporting kitting and returns management.

GXO Direct provides warehousing space when and where it is needed, reducing fixed costs and eliminating the need for clients to invest in a dedicated warehouse. The model provides the ability to move product closer to end customers, reducing emissions and shortening transit time.

Last month, GXO announced it would hire 22,000 people to support the holiday peak season. About half of those would be in the U.K., it said, where GXO recently completed its $1.3 billion acquisition of Clipper Logistics. GXO has over 950 facilities globally, more than 210 million square feet and 130,000 employees. 

Click for more articles by Brian Straight.

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Brian Straight

Brian Straight leads FreightWaves' Modern Shipper brand as Managing Editor. A journalism graduate of the University of Rhode Island, he has covered everything from a presidential election, to professional sports and Little League baseball, and for more than 10 years has covered trucking and logistics. Before joining FreightWaves, he was previously responsible for the editorial quality and production of Fleet Owner magazine and Brian lives in Connecticut with his wife and two kids and spends his time coaching his son’s baseball team, golfing with his daughter, and pursuing his never-ending quest to become a professional bowler. You can reach him at [email protected]