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Cyngn’s autonomous industrial vehicles are revolutionising how logistics companies get work done
How do you solve a $1 trillion problem?
That’s the question that’s been plaguing the logistics industry since the start of the pandemic. As consumers shifted their buying habits, ecommerce exploded, and it hasn’t slowed down. During the 2020 holiday season, for example, online spending shot up 32 per cent to a record-breaking $188 billion. Today, ecommerce sales have hit $5.4 trillion annually.
For manufacturers and third-party logistics and fulfilment centres (3PLs), this dramatic shift has left them struggling to meet rising demand, battling supply chain efficiency, productivity and safety issues, as well as labour shortages along the way. These challenges are not unique to this industry. Nonetheless, 3PLs are definitely feeling the pain. In the case of the latter, the number of employers struggling to attract new workers has tripled since 2020.
Until recently, organisations have sought to solve the labour shortage problem through more aggressive recruiting. 3PLs have started to offer novel – albeit expensive – incentives to attract and retain workers: a higher minimum wage, paid time off or assistance plans. Today, labour takes up 70 per cent of a warehouse’s entire budget.
Unfortunately, workforce shortages persist. There simply aren’t enough people to do the things that need to be done – and this gap between the need for workers and their availability could cost the US economy more than $1 trillion by 2030.
“It’s a big, pervasive problem,” said Lior Tal, the CEO of Cyngn, an industrial autonomous vehicle company. “We’ve talked to organisations who said they would hire 500 people right away if they could find them.”
But how do you solve a worker shortage problem when there simply aren’t enough workers?
Business Reporter: Driven towards greatness
Enter autonomous vehicles
Early this year, we took a tour of Cyngn’s headquarters in Menlo Park, California. The facility was abuzz with a variety of industrial vehicles, all running DriveMod, Cyngn’s autonomous vehicle technology. In one part of the facility, several DriveMod-enabled Columbia Stockchasers zipped around shelves, piloting themselves to a series of pick-up spots and drop stations. In another area, hardware engineers gathered around a forklift, training sensors for pallet and people detection.
Seeing all these vehicles working on their own was a thing of magic – the fulfilment of a decades-old promise that vehicles would one day drive themselves.
In recent years, the story of autonomous driving is one of companies struggling to keep that promise, particularly on public roads. The problem of open-road driving is just too complex. Driving is as much cultural as it is technical, and humans are unpredictable. Every year, leaders from robotaxi companies go before journalists to reset expectations. “The self-driving revolution is coming,” they insist, “just not quite yet.”
To be at the Cyngn facility, however, is a reminder that the self-driving revolution is already here, particularly across industrial use cases. For 3PLs and manufacturers, this news couldn’t have come at a better time.
Putting autonomous vehicles to work
In October 2021, Cyngn’s stock was listed in its IPO under the ticker symbol CYN. At the time, the company was pre-revenue. Its pitch to investors was akin to that of a pharmaceutical start-up developing a promising new drug. Stick with us, Cyngn promised. The upside could be huge. (Huge is the operative word here. According to its investor presentation, the company is not only going after the $119 billion logistics and manufacturing market but also that of mining and other heavy industries.)
Since its IPO, Cyngn has invested substantial resources in scaling its engineering workforce and deploying autonomous stock chasers to key locations across the US. By all accounts, the company is ahead of the timeline it outlined when it went public, notching several high-profile clients across logistics and mining.
“Most companies understand they must automate to remain competitive,” said Mr Tal. “What they might not understand is how easy it is to integrate these technologies into their existing workflows.”
The company, he explained, has intentionally designed its self-driving vehicle suite to foster easy adoption. Cyngn offers autonomous retrofits of common warehouse vehicles such as stock chasers, ensuring that operators can continue to use their existing vehicle fleet without major capital expenditures or changes to their workflows. They can even be switched back into manual mode when needed.
Moreover, these deployments are structured using the robotics-as-a-service model, which means clients tap into the power of autonomy without having to staff a team of engineers for technical support.
For their clients, the impact of these autonomous vehicle deployments has been overwhelmingly positive. The implementation of autonomous vehicles offers significant benefits that are realised almost immediately: increases in productivity, safety and scalability, to name a few.One case study, conducted at a 3PL facility in Las Vegas, found that Cyngn’s technology increased productivity by 33 per cent and decreased human labour costs by 64 per cent.
For a 3PL, there is almost no other intervention a company can adopt to increase productivity by that much. The increases are so dramatic, early adopters of autonomy are carving out a clear competitive advantage.
Beyond increases in productivity, shifting workers away from driving increases profitability. 3PLs make their money in two ways: order fulfilment and item storage. In the case of the former, the facility charges sellers a pick fee for every item that goes into a box.
The more workers pick, the more money the facility makes.
By deploying DriveMod-powered Stockchasers, facilities have been able to shift their workers away from the money-losing effort of driving to the money-making effort of picking. It’s hard to overstate the impact that this shift can have on a company’s bottom line.
Collaborating with robots
In the past, the rise of automation seemed to predict massive redundancies. Today, however, those fears have come to be seen as overblown — particularly in the context of such dramatic labour shortages. Today, warehouse technologists see automation as augmenting, not replacing, its existing workforce. Autonomous vehicles take up monotonous, repetitive driving, leaving humans with more fulfilling, thoughtful work. Robots that work in tandem with humans even have their own buzzy nickname: cobots.
In many ways, autonomous vehicles are the perfect cobot — and the perfect solution to the labour shortages plaguing third-party logistics companies. It’s no surprise, then, that the industry is starting to embrace this technology. Warehouse adoption of robotics will increase by 50 per cent or more by 2027, according to surveys taken by industry trade groups.
While the debate continues over whether or not self-driving trucks and taxis will take over the roadways, autonomous industrial vehicles are silently and swiftly transforming the very fabric upon which the world’s businesses operate. From defence to dairy, autonomous industrial vehicles are radically improving productivity while reducing costs.
According to Cyngn’s white paper, ‘Autonomous Industrial Vehicles: The State of the Industry’, the industrial automation market is expected to reach $306.2 billion by 2027. This rapid surge of industrial autonomy has facilitated profound changes in workflow, profit pools and value chains, ushering global industries into an age of unprecedented flexibility, scalability and efficiency.
To learn more about Cyngn, visit cyngn.com.