E-Commerce at Work: Humans Beware

“The next decade is a story not about job loss, but more so about changes in job quality,” writes Gutelius in her report. She and Theodore believe: “Technology has led to workers being pushed harder and also their privacy getting violated.” In effect, for many, technology is making a bad job worse.

The hope is that humans can keep pace with the work velocity that’s increasing everywhere around them. In our collective heart of hearts, however, we all know that humans won’t keep up and that it’s a just a matter of time.

Workers and their warehouses in the U.S
And what of the warehouses themselves, most of which in the U.S. are small and cannot afford high-tech upgrades or makeovers…most of which would also find it difficult to support even RaaS (Robots as a Service)?  E-commerce churn could well exact a severe toll on the viability of many of those warehouses.

In the U.S., there are approximately 1 million workers who collectively earn wages approaching $50 billion annually [median hourly wage $15.85]. “According to County Business Patterns (2016), there are just more than 15,000 warehousing establishments in the United States, the majority of which are small, employing fewer than 20 workers. However, while establishments with 100 or more workers account for just 12 percent of total establishments, they account for the lion’s share of employment—73 percent of all warehouse workers work in these facilities.” For example, Amazon’s warehouse archipelago with 250,000 workers, or the Inland Empire in California employing 68,000.

Because of razor-thin profit margins and cost-sensitive competition from other warehouses, “warehouse operators have thus far moved cautiously into risky experiments with new technologies, relying instead on streamlining current processes and on workforce experimentation.”

Mega shippers like Amazon, DHL, XPO, and now Shopify have the wherewithal to spend on logistics robots. Amazon owns 200,000 robots, and its own robot factory (Amazon Robotics (formerly Kiva Robotics)) to experiment with and to build them. 

It creates an atmosphere for disruption through consolidation, as PwC’s The Future of the Logistics Industry remarks: “The current market leaders compete for a dominant market position by acquiring smaller players, achieving scale through consolidation, and innovation through the acquisition of smaller entrepreneurial start-ups.”

Gutelius and Theodore offer up this chilling viewpoint: “For all the emphasis on sophisticated, strategic approaches to goods movement that abound in business literature, warehousing largely still is seen as a cost to be contained—a “necessary evil.”

“Warehousing rarely adds an increment of value to the end product—and fast, free shipping and returns reinforce this point—so the dominant dynamic across the warehousing industry is one of low margins and cost cutting.”

So, where in this “necessary evil” do humans sit? Not very high, that’s for sure.

In stacking up myriad concerns over humans laboring in logistics, e-commerce warehouses are quickly forcing the realization that humans just don’t belong there; they simply aren’t good places for humans to be. The job is totally unrewarding to the workers, the pay is low, human workers are constantly surveilled by sensors and their job performance graded by algorithms. Clearly, humans are just being tolerated until logistics robots shed their clumsiness and get a bit brainier, which is not far off.

Then what? The throughput speed in warehouses will be ratcheted way up to meet the demands of the marketplace. Humans who can’t keep up in 2021 surely will be overwhelmed a few years on.

E-commerce warehouses have also forced another and even weightier realization: What’s to be done with a million warehouse workers when they are no longer needed?