The current market demand for forklift AGVs in China

Market Size

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An AGV/AMR forklift is equipped with various guidance technologies, map algorithms, and obstacle avoidance safety technologies that enable unmanned operation of the forklift. Fork-type mobile robots that integrate stacking functions with automated guided handling have become increasingly popular among application companies in the past two years due to the increased demand for automated handling.

According to the data from China Mobile Robot (AGV/AMR) Industry Alliance and the New Strategy Mobile Robot Industry Institute, China's fork-typed mobile robot (including visual navigation) sales reached 8,000 units in 2021, a 60% year-on-year growth, representing a market value of about 2.45 billion yuan, a 42.40% increase.

A recent industry update highlights that the market is expected to continue this growth trajectory in 2023. A report from October 2023 indicates that the demand for automation in logistics has surged, especially post-pandemic, leading to a predicted growth rate of over 55% this year alone.

In 2021, laser forklifts with reflective plates accounted for 69% of the market, while SLAM-guided unmanned forklifts, which gradually penetrate some scenes requiring high robot flexibility, accounted for 23%. Based on the latest industry trends, the share of SLAM-guided unmanned forklifts is expected to rise to 30% by the end of 2023 as technology advancements make them more versatile and cost-effective.

Competitive Landscape

Prior to 2014, only a few companies in China sold forklift AGV/AMR robots, but after 2014, the market has exploded and many companies are competing. According to the data of China Mobile Robot (AGV) Industry Alliance and the statistics of New Strategy Robotics Industry Institute, there are more than 60 domestic forklift AGV manufacturers, including traditional forklift manufacturers, logistics integrators, and warehouse robot manufacturers. Different attributes of enterprises lead to different considerations, and each has its own advantages and disadvantages in a competitive market.

The main business of traditional forklift companies in this field was initially to manufacture OEM bodies for forklift AGV/AMR manufacturers. Forklift companies are also facing changes with the advent of intelligent manufacturing, and forklift AGV/AMR are gaining popularity, so it seems natural for traditional forklift companies to resume software development based on their advantages in body design, production, and manufacturing. The traditional forklift companies that are familiar with the body process and have a mature distribution network have certain advantages in the industry competition.

In general, the scale of forklift AGV/AMR production enterprises in China is currently developing unevenly. Although there are more and more enterprises entering this market, it is not easy to make a difference in the market.

Economic cost is the main entry barrier in the forklift mobile robot industry. For forklift AGVs, the R&D cost of forklift AGVs/AMRs is high if they are developed independently, so it will be difficult to amortize when the production of the product cannot reach a certain scale. Secondly, the product differentiation and capital chain needs, the recognition of the original brand in the market by the application vendors will force the new entrants to spend huge amount of money to overcome the negative impact of the brand loyalty of consumers. When the industry to enter requires a large amount of capital, it can pose considerable obstacles to new entrants, especially in terms of advertising and R&D, etc. There is no return on investment, requiring new entrants to be courageous enough. Finally, the distribution channels and policy standards, new entrants in addition to the need to produce products must also build channels to consumers, in this regard new entrants often have a certain disadvantage.

Future Trends

At this stage, the domestic unmanned forklift market is still in the initial stage, and its characteristics are mainly reflected in the small market scale base, fast growth rate, huge market space and diversified customer demands. Although the market competition at this stage is becoming increasingly hot, the enterprises related to unmanned forklifts generally express optimism about the market prospect.

From the external environment, with the deepening of the intelligent upgrade of China's manufacturing industry, the innovation in automation technology, production and service will accelerate the process of importing intelligent equipment. Meanwhile, the rapid development of artificial intelligence and new generation information technology, the Internet and digitalization of forklift industry as a whole, and the landing application of driverless technology are becoming more and more mature. All these factors will promote the development of unmanned forklift industry. In the future, with the help of 5G, big data, Internet of Things, cloud computing and other technologies, forklift mobile robots will not simply carry goods to the designated position, but become a new type of intelligent industrial equipment with multi-functional functions such as real-time sensing, safety identification, multiple obstacle avoidance, intelligent decision making and automatic execution. In recent years, due to the promotion of market demand and the entry of a large number of enterprises, the technology of forklift AGVs has been moving towards maturity, and with the current progress of artificial intelligence and other technologies, unmanned forklifts have also started to develop in a more intelligent direction.

There are four main key technologies and application advantages of intelligent forklifts.

First, the perception technology of forklift, such as vehicle-mounted UHF RFID reading and writing technology, and lane tag, cargo tag, cargo tag effective identification perception, to achieve automatic confirmation of the in and out system.

Secondly, the technology of interaction with information system scheduling instructions, most typically the application of on-board computers and handhelds, which greatly improves logistics efficiency.

Thirdly, the application of various sensors of forklift trucks, such as speed, weight, collision, temperature, oil pressure, electricity and other sensing technologies, makes the forklift bus control data more abundant, with the system safety warning, to realize the monitoring of equipment status.

Fourth, the intelligent forklift's location, task, status, efficiency and other information will be gathered in the "industrial vehicle remote platform" for big data processing and output to realize remote operation and rental operation of forklift.

External reports from logistics tech conferences that took place in the past week emphasize the integration of AI with AGVs, improving efficiencies and safety standards further. Highlighted at the recent event were key advancements in machine learning algorithms that enhance obstacle detection and real-time decision making.

From December 13th to 15th, at the "2022 China Mobile Robot (AGV/AMR) Industry Development Annual Conference", three industry blue books will be released.

"Blue Book of Mobile Robots (AGV/AMR) Solutions for Construction Machinery Industry (2022 Edition)"

"Blue Book of Mobile Robots (AGV/AMR) Solutions for the Semiconductor Industry (2022 Edition)"

"Blue Book on Development of Special Controllers for Industrial Application Mobile Robots (AGV/AMR) (2022 Edition)"

Automation creep – beyond manufacturing

Automation offers many advantages to manufacturers. Quality, precision, consistency, increased output, safety and the ability to focus humans on tasks where their skills, judgment and dexterity make a difference.

While industrial automation covers a huge spectrum, it’s often experienced as the integration of robotic arms to support specific functions. Increasingly affordable and flexible robotics are accelerating adoption in more and more facilities, and reviews of Pack Expo International 2016 had many calling it the “robot” show.

As key manufacturing functions are automated, technology is being applied to a number of challenges in warehousing and logistics. Amazon’s purchase of Kiva and the rise of “smart” storage and inventory taking drones are a couple well known examples.

Just as with early factory robotics, many of the early applications of warehouse automation are speculative, expensive and not flexible. But the rapidly evolving technology is fueling accelerated adoption and reducing the cost and integration challenges.

Warehouse automation is increasingly accessible for SMBs and for applications in large companies which historically didn’t meet justification requirements.

AGVs are both a great example of this trend and a significant opportunity for many small and mid-sized manufacturers to improve operations.

An introduction to Autonomous Guided Vehicles

They’re known by many names including AGVs, Autonomous Guided Vehicles, and Autonomous Fork Trucks. For specialists, those names may convey subtle distinctions, but for the purposes of this article we’re talking about driverless vehicles that operate “automatically” within manufacturing, warehouse and distribution environments.

In an interview with Modern Materials Handling, Mark Longacre (the then chair of the automatic guided vehicle product section at the Material Handling Industry of America) defined an AGV as “a computer-controlled mobile robot used to move materials around a facility.”

According to Savant Automation, the AGV was invented in 1954 by Barrett Electronics, and originally, they were known as “driverless vehicles.” The “automated guided vehicle” name came into common use in the 1980s.

Actual rate of adoption is a bit tough to quantify as many companies protect that sort of information as proprietary. However, financial projections for the industry provide some indication of growth and rate of adoption. Statistics include:

• Projected 1.5Bn USD market by 2024
• Roughly 3,000 AGV systems have been installed in the US in the last 50 years
• The average installed system in the US has 4-5 vehicles, while there are many smaller systems (1-3) and larger (50-100)
• Tow systems are experiencing growing demand because of their ability to move more loads with multiple trailers than a single fork truck

Early applications were simple. One of the first AGVs was deployed to deliver mail around the Sears Tower in Chicago. In contrast, industrial applications were expensive and complex and reserved for extreme requirements. Examples of early AGV implementations include towing and “heavy carrying.” Early adopters saw the potential to not only reduce cost, but also improve workplace safety. Given the extreme nature of early applications, the extensive programming and integration, and the significant cost were justifiable based on the ability to satisfy dangerous and extreme requirements without jeopardizing safety.

As with every disruptive industry built on rapidly evolving technology, there is ongoing consolidation and launch of new players. Well known manufacturers include Savant, JBT Corp, and Egemin Automation.

As adoption becomes more common, so does awareness and innovation. For instance, as early as 2012 a study commissioned by the Automation Alliance of the MHI (Material Handling Institute) found that:

• 74% of manufacturing & distribution professionals were already considering automation for their operations – more focusing on AGVs (17%) than robots (16%)
• Warehousing respondents emphasized order accuracy while manufacturing respondents cited throughput as a major driver of projects
• Implementation of AGVs was influenced by market demand, customer mandates, operational excellence, cost reduction and new product launches in order of decreasing importance

In 2014 Inc. magazine article “Automated Guided Vehicles: Behind the Swift Business of a Heavy Industry” identified AGVs as a “Best Industry” for innovative start ups. (For what it’s worth, in 2016 top of the Inc list is marijuana....)

In summary, the gradual development of AGVs which began 60 years ago, has recently accelerated. Adoption is broadening beyond heavy and dangerous applications as prices fall, technology improves and capabilities expand. It seems that AGVs might soon be on ever factory and warehouse floor.

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Except....

A cultural barrier

It’s a bit unnerving to be walking through factory, warehouse or distribution center and see a driverless vehicle come around a corner and head toward you – even if you’re safely inside the demarked walkway area!

Unlike robots which are typically fixed (although new generations are moved easily from work cell to work cell and work alongside people) AGVs can conjure up images of runaway trucks. Among audiences that have undergone OSHA fork truck safety training and are aware of the potential for mayhem and grievous injury, the unattended movement of fork trucks is particularly disconcerting. Therefore, one of the elements of a system implementation is an extensive “cultural” training regimen to acclimatize workers to the presence of AGVs.

There’s also a potential set of political and workforce considerations. AGVs may be perceived as management replacing workers. In some situations, that may be the case – a cold calculation of cost. However, many implementations are predicated on safety and comfort, and an open discussion about the goals and outcomes of a project may relieve the natural concern among warehouse workers.

Examples of AGV use cases which are designed to improve worker comfort and safety include:

• Operations in extreme temperatures (frozen food blast freezers & scorching foundry floors)
• Heavy, awkward repetitive applications such as retrieving an empty pallet from a stack and placing it on the floor for manual loading
• Improving accurate location of products to reduce frustrating time spent searching for misplaced goods

Just like any significant technological change, management must be aware of potential perceptions, interpretations and angst, and use transparency and training to alleviate the concerns to pave the way for a successful implementation that will deliver the anticipated return.

Technology convergence – lift truck power steering and Lidar Sensing

Beyond cost and culture, one of the impediments to broader adoption has been the need to dedicate in-house engineering resources to manage an extensive integration project and requirement to invest in facility upgrades and ongoing maintenance. Guidance systems, for instance, often required disruptive and expensive installation of wires or inductive elements into concrete floors. Alternatively, lasers searched for reflectors which were installed extensively throughout a facility.

In fact, guidance systems were one aspect which distinguished solutions from each other – and which illustrate some of the integration challenges.

But two independent trends developed in the mid-2000s that converged to disrupt the AGV market.

Electronic power steering began to be integrated into various lift truck platforms. Replacing mechanical and hydraulic systems, electronic power steering was originally envisioned as a solution to ergonomic and safety requirements. As it became more widely adopted other advantages began to emerge including improved maneuverability. Within a few years, it was a common feature of many fork lift models. (Interestingly developments in the fork truck space have led to innovations in automobile design.)

Coincidentally lidar technology, which was originally developed for meteorology, began to evolve quickly into a mapping and 3D scanning tool. In 2004 a pair of French engineers saw an opportunity to leverage lidar to create virtual maps of factory and warehouse facilities which could support AGV navigation.

Things became interesting when they mashed together their robotic software control system, a fork lift with electronic power steering and a virtual map. The essence of that combination – creating AGVs from standard fork lifts and easily implementing them in facilities without significant adaptive modifications – held promise of accessible autonomous vehicles for warehouse automation even for SMBs and lower return but important integrations in large companies.

They founded a software robotics company[JH1] they called BALYO. They identified fork trucks as a target market but knew that their expertise was in controls [JH2] [EM3] [EM4] – not the trucks themselves. They undertook a program of partnership development, and after successful partnership and growth in Europe, signed a cooperation agreement with US fork truck manufacturer Hyster-Yale in early 2016. Today they offer standard AGV control integrations on newly ordered trucks from both the Hyster and Yale lines of lift trucks – “driven by Balyo” is the way they’re described.

Standard trucks...adapted

This approach offers some interesting advantages over a traditional purpose built automated guided vehicle. One is obvious – when needed an operator can jump on the truck and operate it using traditional controls. The biggest advantage though is ease of implementation.

Unlike legacy AGV systems which require facility modification for navigational aids (buried wires, etc.) BALYO’s lidar adaptation of traditional fork trucks simply requires some time to “learn” the warehouse by being driven around while the system gradually catalogs the various fixed features around which it will need to navigate. This means that an SMB with limited local engineering resources has the same opportunity as a multi-national with a pan-global engineering department.

AGVs can reasonably be implemented with a bit of proactive planning, several days of on site “learning” and adequate cultural & operations training to ensure operators are comfortable. (Keep in mind that an adapted, standard truck may startle operators more than an odd looking AGV moving unattended through a facility.)

Cost & Justification

Cost will remain a factor in small implementations. While a single standard truck might cost between $15-40K, an adapted truck could run >$100K installed. That’s a huge reduction from the cost of early systems, but still substantial delta. There are some economies to be had with multiple truck installations.

The cost, therefore, impacts the typical application and use case. Generally, companies that are running at least two shifts and have one of several additional factors find reasonable justifications for this sort of system. Additional factors might include safety, comfort and significant non-value added time spent shuttling products.