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5G and the warehouse of the future

5G technology is set to bring about significant change to traditional warehousing practices.

Trade Reimagined

With the fourth industrial revolution in full swing, we’re beginning to see how technology is having an impact on how we live.

One way in which this has been most obvious is through the growth in popularity of online shopping. Everything from a pint of milk to the latest best-seller can be ordered, paid for, and delivered to your front door.

Ecommerce has been growing steadily over the past decade but has soared during 2020 as the Covid-19 pandemic took hold. Sales have rocketed as people have been forced off the high street and into their homes by lockdowns and through social distancing.

During the third quarter alone, the US Department of Commerce reported e-commerce sales of $209.5bn - slightly lower than the $211.6bn recorded during the second quarter but 36.7 per cent higher than a year earlier.

And, representing just 14.3 per cent of total retail sales currently, there is still plenty of room for future growth as consumers become more comfortable with shopping online.

Yet, as ecommerce has grown in popularity, it has also led to challenges for traditional warehousing methods. To meet those, the transportation industry and its use of warehousing will have to change.

Automation

With greater numbers shopping online, manufacturers and retailers must scale up their warehousing operations, particularly as consumers increasingly expect same-day delivery. This could be expensive, and with labour representing the greatest operating cost in warehouses, increased automation in warehouses is likely to become far more common.

Consultancy McKinsey highlighted that €300bn in costs are incurred in running warehouses, globally, in a recent report. It found more than 85 per cent of this is spent on operating costs, which include: labour, space, and equipment required to receive, sort, store, pick, pack, and finally dispatch products.

Automation could be a game changer, ridding businesses of many of these costs. It would likely impact other areas too – mistakes will be fewer and productivity will likely be enhanced. It is no surprise then that automated warehouses are becoming more common.

There were around 4,000 automated warehouses globally in 2018, according to a report by ABI Research. It expects this to increase to 4 million commercial robots in 50,000 warehouses across the world by 2025, with adoption increasing as warehouse robotics become more affordable and more versatile. The introduction of 5G will also likely accelerate the automation process.

Introducing 5G

With speeds of up to 100 times faster than its predecessor (4G), 5G will improve data latency and capacity, allowing more devices to stay connected to the internet via the Internet of Things (IoT).

5G will also bring about changes for traditional warehousing practices and make smart warehouses a much more common feature in the transport industry. While the rollout of 5G is still in its infancy and coverage limited, it’s not too early to start planning for what will be a truly transformative change for industry.

At DP World, we have already begun to think about how to work with businesses to help them adapt for this change.

Our joint enterprise with DHL Supply Chain, for example, has anticipated the rollout of 5G and included it in almost every part of the warehouse design.

At its 428,000 sq ft, the warehouse will be the single largest unit at DP World’s London Gateway and has an internal volume equivalent of 645 Olympic swimming pools. But, most of all, it represents a significant investment in automation and fully embracing 5G.

Due for operation in early-2023, full planning permission was received for the warehouse in just 24 days. Our plan is to work with both existing and prospective clients on a range of build-to-suit solutions with fast delivery from agreement for lease, so they are fully able to adapt to the demands of this new, faster-paced, world.

It is our intention that companies seek to partner with DP World to future-proof their businesses. By using our expertise, we believe we can smooth the flow of goods and use our resources to help drive corporate growth.

Having invested in technology for many years, we’re ready to listen about the challenges facing every business. We believe our prior investment means we are well placed with suitable solutions to ensure our clients are truly ready for the digital age.

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