MODEX, the largest logistics and transportation tradeshow in the U.S., occurred this past week in sunny Atlanta. It was my first time attending the event, and I can confirm the show is absolutely massive. Boasting around 45,000 attendees, over 190 educational sessions, and spanning the entirety of the Georgia World Congress Center, taking in all that MODEX has to offer will make your head spin.
I was there for a particular reason - I wanted to get my finger on the pulse of the logistics industry and gauge whether private LTE and 5G networks are at the forefront of driving automation in warehousing. The conclusion? It’s starting to happen, but mass adoption is still a little ways out.
Automation, robotics, and data
The first thing any newcomer to the show will notice are all the robots. Self-driving forklifts, automated sorters, and robotic manufacturers make the bulk of the tradeshow floor. Cordoned off for the audience’s protection, these marvels of engineering are diligently performing pre-set tasks while representatives stand nearby, ready to answer any questions.
So, what did I learn? Almost all the robotics manufacturers had capabilities to connect to a private LTE or 5G network or had plans to offer those capabilities before the end of the year. Great! The bad news? Almost none of these manufacturers had seen a live use case where a customer needed to connect the robots to a private LTE or 5G network. Not great.
From my understanding, most warehouses are still using Wi-Fi to keep their operations running and increase automation capabilities. Only the newest and the largest warehouses are seriously considering installing an LTE or 5G private network, and even then, those organizations plan on having a Wi-Fi network to connect their employees and keep the data flowing. They’re hybrid environments, where the most critical operations and robots are using private LTE or 5G and everything else is leaning on Wi-Fi.
Private LTE/5G networks are still not mainstream. Most in the industry aren’t thinking about the technology or aware it exists. A Honeywell representative, who was showing me their 5G compatible handheld scanners, told me he thinks it’s still at least a year before adoption really steps up. Some integrators I spoke with were less optimistic, stating they think private LTE/5G won’t hit the mainstream for another 3-4 years. There’s a wide gap between the optimists and the pessimists, but both parties ultimately agreed that once it does catch on, they expect adoption to spread like wildfire.
Why? Well, private LTE/5G networks are still the number one recommendation for newer, larger warehouses that are focused on delivering efficient solutions. The reason being that LTE and 5G networks are far more secure, have better range and penetration (up to 10x the range in outdoor environments like ports), and are built for mobile applications.
Anyone I spoke with who was aware of the capabilities of private LTE or 5G networks agreed that warehouses were a perfect use case for private LTE/5G, but they would usually caveat this by stating that warehousing is still a Wi-Fi first world. It’s common for these environments to have 10, 50, or 100s of Wi-Fi access points that have been hyper engineered to provide the connectivity necessary for the environment. Not exactly a cost-effective solution, but it’s a solution that many are comfortable with; however, this is expected to change as warehouses continue to improve efficiency and increase automation.
That all being said, fear of 5G still appears to be alive and well. I spoke with a couple of individuals who insisted they would never want to work in a warehouse that is wired for 5G because they were afraid of the possible (unvalidated) health risks. It’s another barrier to entry that goes to show that educational content still has to be created and the technology needs to be better explained.
Educational sessions galore
A total of 191 educational seminars occurred this past week, not including the incredible keynotes. These seminars were categorized into nine tracks:
Automation and Robotics
Sustainability and Alternative Energy
Transportation and Logistics
Emerging Trends and Technology
Workforce and Labor
Manufacturing Planning and Sourcing
Distribution and Warehousing
E-commerce Fulfillment and Last Mile Logistics
Risk Mitigation and Resilience Planning
Now what I found interesting was that across this range of sessions the word “automation” could be found in 41 of the titles. That means 21% of all the seminars had an automation feature forming the cornerstone of the presentation material. These sessions were not limited to the “Automation and Robotics” track, either. Automation could be found across every single track, regardless of focus.
Despite all the talk about automation, there was only one session I could find that discussed how to enable this automation from an infrastructure perspective. That session focused on private 5G networks and discussed critical connectivity infrastructure. While automation is a driving force in the industry, the discussion on how to effectively enable this automation still needs to be further explained to drive adoption.
You can view all the sessions that occurred at MODEX 2024 on the Expo Guide.
The data from MHI
MODEX is sponsored by MHI (formerly the Material Handling Institute), an international trade association whose members include material handling, logistics and supply chain equipment and systems manufacturers, integrators, consultants, publishers, and third-party logistics providers. The organization consists of 1,144 members which provides the organization with unique insight into the industry.
MHI partnered with Deloitte to publish the 2024 MHI Annual Industry Report, which compiles key findings from input of 1,675 supply chain professionals across the industry. The breakdown of these respondents can be seen in the figure below:
The bulk of the report discusses the impact of AI and Data Analytics across the industry, but what I found most interesting was the very last figure of the entire report, found on page 47. This figure outlines where the respondents plan to invest in products and services over the next three years.
AI is by far the most anticipated category; however, I thought it was particularly notable that automatic guided vehicles, wearables, automated retrieval systems, autonomous mobile robots/drones, and Industrial Internet of Things are all categorized in this graph and each of these need to be connected to the network somehow.
Do these connections need to be wireless? Not necessarily, but it certainly would be more cost-effective to have these systems operate on a private wireless network than wiring each connection. While explicit numbers for wireless networking aren’t given in the report, it doesn’t take much to deduce that as investments to these various categories increase, upgrades to connectivity infrastructure will need to be considered.
Why is it taking so long for the logistics industry to adopt private LTE and 5G?
At its core it’s an education and positioning problem. The adoption of new technologies takes time, but this is compounded by the fact that many warehouses do not have RF specialists onsite and so there often isn’t a person on the inside pushing to adopt the newer technology. All the pushing is coming from outside representatives, whether those are technology integrators or the LTE/5G hardware manufacturers themselves.
Paul McQuillan at Oceus, an organization that builds custom private 5G solutions for warehouses, healthcare, and the federal government, explained to me like this. First, the education barrier needs to be broken. There needs to be an overwhelming amount of content that is focused on the solution and showcases the use cases, and that content needs to be easily accessible by those decision makers. Second, when talking to individuals within the warehousing and logistics industry, the economics need to be properly explained and private LTE and 5G networks need to be positioned in a different light than many system integrators are used to.
Private LTE and 5G networks can appear expensive from the outset, so it’s important to lead with explanations around operational and “hidden” costs along with capabilities and efficiencies before jumping into the cost of the hardware. It’s OPEX first, CAPEX second, and if you can make that budget make sense from an IT perspective, adoption suddenly starts to make a lot more sense.
So, there’s a trust/educational barrier that needs to be overcome along with an economic argument. Afterall, logistics keeps the world running. Breaking a system that “works” and upgrading to future-proof technology sounds like a no-brainer when you’re sitting on the outside, but from the inside it can be a daunting proposition. However, once that barrier is broken and there are tried and tested use cases that showcase economic benefits, more will quickly begin to follow.
How can integrators position themselves to build private 5G networks for warehouses?
The low hanging fruit for private LTE and 5G networks will be the new, large warehouse builds. Establish connections with local governments in the markets you compete in. You can request an open records review with zoning departments or attend public hearings that usually occur once or twice a month. These meetings can provide valuable insider information on the latest builds and permit issues. From there, it’s a matter of professional networking and positioning the solution.
Alternatively, you can partner with established contractors that specialize in warehouse builds. There’s a likely chance you have unique insight into the technology that hasn’t been tapped by those who build the warehouses.
When discussing the private 5G networks, establish a clear value proposition that positions OPEX at the forefront and demonstrates increased efficiency. Efficiency is the name of the game for logistics and if you can easily show how your private network can increase automation for less in the long-term, you’re in a position that’s difficult to beat.
Finally, begin developing content, today, that will showcase your organization as a thought leader for this particular market segment. It’s apparent that private 5G networks will eventually be mainstream for warehouses, so putting in the effort now will pay dividends in the future.
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