COVID triggers mechanisation of warehouses

India's warehousing sector received institutional investment commitments of $6.5 billion after the GST implementation.
COVID triggers mechanisation of warehouses India's warehousing sector received institutional investment commitments of $6.5 billion after the GST implementation. The sector, which received around $1,508 million in private equity (PE) investments in 2019, saw investment dropping to $57 million during January-May 2020 because of the COVID 19 pandemic. However, given the indispensable nature of warehousing, experts expect the sector to see a faster recovery in FY21 driven by the strong demand from industries such as 3PL (third party logistics), E-commerce, FMCG and pharmaceutical.

Most industries - facing labour shortage issue created by the COVID 19 pandemic - are concerned about maintaining social distancing at the workplace. Warehouses, striving to continue operations amid trying conditions, are opting for warehouse management system (WMS) and technology-enabled operations for handling material.

With mechanisation rising in warehouses, the adoption of modern material handling equipment (MHE) is increasing as they help in reducing dependence on labour. Nowadays even medium size industries are using palletization and are opting for semi-automatic and automatic products to be more productive. To optimise usage of limited available space, height of warehouses in India are getting higher providing more opportunity for automation of MHE to improve safety and efficiency.

In the recent future, the semi-automatic solutions like very narrow aisle (VNA) truck along with warehouse navigation - which can increase the efficiency of warehouse by 25 per cent as compared to manual driven very narrow aisle truck with less aisle width - are expected to see a growth in India. The demand for automated guided vehicles (AGVs) is also likely to see a jump as they can help warehouses to solve their operator unavailability issue during pandemic-like situation.

As warehouse operations grow in scale and complexity, emerging technologies like warehouse trucks for specific tasks, forklifts integrated with WMS, etc are catching up. It also gives material handling equipment suppliers opportunities to associate with WMS and racking manufacturers to provide holistic and turnkey solutions to be a one stop service provider. Besides, Internet of Things (IoT) is fast emerging as a useful tool to monitor fleet health, provide proactive or predictive maintenance and optimise fleet size. All these trends will take India’s MHE industry towards a cleaner, more productive, safer and digitally enabled future.

COVID has led the MHE industry to re-think on their business models. Seeing volatility and uncertainty in demand, many warehouses are feeling a liquidity crunch. To meet surges, they are more likely to opt for rental equipment in the short-term to minimise capital expenses. This will spur demand for MHE rental services.

Increasing consumption, growing middle-income population and rising industrial activity augur well for material handling equipment market in India. There will, of course, be ups and downs along the way, like the economic slowdown in the second half of 2019 and COVID pandemic in 2020. But, the long-term story for India and its MHE industry remains intact and strong as the economic engine cranks up again.

- Pratap Padode, Editor-in-Chief, Industrial Products Finder & IPFonline.com.

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