Top 10: Automated Warehouses
Before we get you into the Top 10 Automated Warehouses, you might want to check this article out as it appears in our March Issue of Supply Chain Digital. Trust us, it's way cooler to read this article when you can flip through our user-friendly e-reader.
You can’t compile an automated warehouse list without putting this warehouse giant on it. We left Wal-Mart at No. 10 because it doesn’t really have warehouses per se, unless you consider the fact that every Wal-Mart superstore is essentially a consumer-operated automated warehouse. You can kind of say it’s automated because the hordes of consumers that pile into Wal-Mart each day are kind of like robots the way they zig-zag through every aisle.
9. COCA COLA
Coca Cola’s fully automated warehouse for the EMEA region is a sophisticated facility that provides on-site storage, thus eliminating the expensive double-handling task that bogs down logistics when shipping stock off-site to local warehouses. Delivered by FKI Logistics, Coca Cola’s warehouse houses 25,224 pallet locations and is designed to accommodate future expansion of the factory.
“Wait a minute, that doesn’t look anything like an automated warehouse!” That’s probably what you’re thinking if you watch this awesome Netflix video. You’re right because those people are most certainly not robots. Netflix uses humans to send off those DVD copies of “Black Dog” and “A Walk to Remember” each and every day. Some futurists might be calling for robots to optimize Netflix, but with next-day shipping for every order, you cannot question the efficiency of this human-automated warehouse.
Amazon.com fulfillment centers are located all over the world, including 18 in the U.S., 20 in Europe and 10 in Asia. Interesting enough, none of the Amazon.com fulfillment centers are located within 500 miles of the headquarters in Seattle, Washington. There aren’t enough resources for each of these to be state-of-the-art automated warehouses, but they do deploy a certain degree of automation. Amazon basically used this massive network of strategic locations to become the largest online retailer in the world.
6. FEDEX SUPERHUB
FedEx uses 4,000 employees during the day and 8,000 at night so it’s not a fully automated operation by any means. But the SuperHub is still an unbelievable facility with plenty of automated solutions that keep FedEx connected to any point on the globe. There are 300 miles of conveyor belts that help support the nearly 3.3 million packages that come through Memphis International Airport each day.
Nike’s “Distribuzione” is an automated warehouse for the European region that holds more than 25,000 SKUs and also where 43 million items are handles each year. The heart of the system is a 280 meter long loop sorter, which handles both automated inbound and outbound orders.
IKEA, the Swedish international home products manufacturer uses automated warehouse services to send distribute those connect-me-if-you-can home items to locations all over the world. With furniture that is found in so many of today’s homes, IKEA can be thought of as the leading furniture logistics company. IKEA grossed about € 23.5 billion in 2010, and it was able to drive out significant costs with the implementation of automated warehouse solutions.
3. UPS WORLDPORT
Worldport is the worldwide hub for United Parcel Service and it’s located at the Louisville International Airport in Kentucky. The automated services used at the sorting hub helps UPS handle 84 packers per second, or 416,000 per hour. UPS really does love logistics, and one reason it does is because of the automated distribution systems at Worldport.
Diapers.com was founded in 2005 and quickly became the largest specialty retailer for baby products. Diapers.com set out delivering diapers, wipes and formula to parents with free 1-2 day shipping, but eventually expanded to include clothes, car seats, strollers and toys and you can check out this awesome video to see how it all goes down. Think about the awesomeness of this solution. You can order diapers for your child while sitting on the couch in your boxers watching ESPN. It doesn’t get much better than that.
An empire built by Tony Hsieh, Zappos gained widespread notoriety for delivering items within 24 hours of a purchase. With the help of its automated warehouse, Zappos grossed over $1 billion in 2009, which eventually led to Amazon.com paying $1.2 billion deal to acquire Zappos. As you can see from the video, Zappos deploys fully automated warehouse services from KIVA Systems to help the company get the most efficiency out of its operation in Shepherdsville, Kentucky. Zappos is able to maintain free shipping, a 365-day return policy and a full-time call center only with the help of its automated warehouse. Zappos is quick, free and easy … just like … Nevermind.
The Top 10 Automated Warehouses
Top 10 air freight carriers
10. Cargolux Group
The Luxembourgish freight carrier Cargolux Group (comprised of Cargolux Airlines and Cargolux Italia, established in 2008) remained in the number 10 spot, with a total reported FTK (Freight Tonne Kilometer) equaling 7.45 bn, which represents a 7.7% expansion year-over-year. The carrier group currently operates a fleet of 30 aircraft (26 through Cargolux Airlines and an addition four through Cargolux Italia), primarily variants of the Boeing 747.
9. Korean Air
Headquartered in Seoul, Korean Air provides cargo and passenger services to over 100 destinations in 44 countries. The carrier fell from eighth place in the previous year’s rankings, with a total FTK of 7.66 bn, representing a 7.1% decrease year-over-year. Korean Air reported a net revenue of $10.7bn in 2017, also reporting a return to profitability for the first time in five years, according to Forbes.
8. Air France-KLM
The Air France-KLM freight carrier group was founded in 1947. The group is comprised of Air France, KLM, and Martinair, and is based in Paris, France. Falling from seventh place in the Freight 50 rankings, the carrier reported a total FTK of 8.13 bn, which represents a 9.2% decrease in traffic year-over-year. The group reported a net revenue of $29.08bn at the end of 2017 and is ranked #28 on Forbes Magazine’s list of Best Employers.
7. Qatar Airways
Qatar Airways, the nationally owned airline of the Kingdom of Qatar is based in Doha, and ascended two places in the Freight 50 rankings, with a total FTK of 9.22 bn, representing a 19.6% increase in comparison to the previous financial year. The carrier’s Cargo division recently launched facilities at its hub in Doha to provide a “Seamless Cool Chain”, comprised of a “2,470 square metres Climate Control Centre situated at the airside… equipped with segregated temperature-controlled sections for storing pharmaceuticals and perishables.” This end-to-end supply chain control is expected to further improve Qatar’s standing as a leader of Middle Eastern air freight.
6. Lufthansa Group
Based in Cologne, Germany, the Lufthansa Group (comprised of Lufthansa, Swiss, Austrian, and Brussels Airlines) fell from the fourth position in the Freight 50, with a combined FTK of 9.46 bn. While this represents a 1.6% increase in traffic, year-over-year, the carrier was forced down the list by drastic growth from other German freight company, DHL. According to Forbes, Lufthansa’s revenue and net profits ($41.5 bn and $2.78 bn, respectively) in 2017 are both the highest reported by the company over a ten-year period.
5. Cathay Group
The Cathay Group (composed of Cathay Pacific Airlines and Dragonair) is headquartered in Hong Kong and its Cargo division accounts for 21% of the airline’s total revenue. The company’s first dedicated cargo flight between Hong Kong, Frankfurt, and London, was established in 1981, according to the official site. Now, Cathay Pacific’s Cargo Division services over 47 destinations worldwide. The carrier fell from the fourth position on the Freight 50 ranking, as its total FTK fell by 3.6%, to 10.21 bn. According to Forbes, Cathay Pacific experienced a second year of unprofitability, although the airline’s asset portfolio reached a record high in 2017, with a net value of $24.1bn.
4. DHL Express Group
Operating as the largest European carrier group, DHL Express Group (composed of DHL Air, DHL International, Air Hong Kong, Polar Air Cargo, ABX Air, Southern Air, Aerologic, and EAT Leipzig) rose two positions in the Freight 50 rankings. The carrier reported a total FTK of 10.56 bn, which represents an increase of 15.1% year-over-year. In 2018, at the Farnborough Air Show, DHL Express announced the purchase of 14 Boeing 777s, part of a new strategy to modernise its fleet.
3. UPS Airlines
Headquartered in Atlanta, Georgia, UPS Airlines is part of United Parcel Service, Inc. Founded in 1908, UPS is the oldest company in the Top Ten, and retained third place in the Freight 50 rankings, with a total FTK of 11.26 bn. This represents a 3.9% increase year-over-year. The Company as a whole reported a net revenue of $67.7 bn, according to Forbes, representing a continuation of a ten-year trend of continuous growth. Forbes also ranks UPS among the world’s top 100 most-innovative companies, and the world’s top 50 most-valuable brands.
2. Emirates Skycargo
The state-owned air freight carrier for the UAE, Emirates Skycargo remains in second place on the Freight 50, with a total FTK of 12.27 bn, representing a 0.4% decrease year-over-year. The carrier’s central hub in Dubai allows its 259-strong fleet to reach over 1.5 bn consumers in under eight hours. Current purchasing plans are underway for Emirates Skycargo to almost double its fleet size. According to Albawaba, “In response to increasing demand from its customers, Emirates SkyCargo introduced a range of air transport solutions specific to industry verticals including Emirates Pharma, Emirates Wheels and Emirates Fresh.” Emirates Wheels has transported close to 150 cars per month since the program’s inception.
1. FedEx Express
Founded in 1998, FedEx Express is both the youngest and largest air freight carrier worldwide, with a total FTK of 15.71 bn. Haulage decreased by 0.9% year-over-year, while revenue increased to $60.5 bn in 2016, and again to $63.8 bn in 2017, continuing an eight-year growth trend. FedEx employs 395,000 members of staff, with FedEx Express operating across twelve transport hubs globally. The carrier purchased an additional 24 Boeing 777 variants in 2018, maintaining their company’s position as the largest airline in terms of cargo haulage.