Substantiated by recent combinations of developments like Industry 4.0, increasing integration of automation, stringent regulation ensuring workers' safety, availability of cost-effective measures that ensure the merchandise to remain in pristine conditions, thereby guaranteeing customer satisfaction, thus retain customer loyalty, an unprecedented level of internet penetration facilitating international business to customer (B2C) transactions along with domestic transactions - material handling application by industry vertical of warehousing, especially that of eCommerce, has gained unprecedented currency. Moreover, new warehouse and fulfillment centers are being continuously established to cater to the increasing consumer base, which is reinforcing the market share of warehousing. Anticipating such robust growth of eCommerce, the largest online retailer Amazon.com, Inc. (NASDAQ: AMZN) had in 2012 announced the acquisition of Kiva Systems, Inc., a leading innovator of material handling technology for a reported sum of $775 million in cash backed by Bain Capital Ventures and Meakem Becker Venture Capital, which was roughly 300% premium to the company's last private valuation in 2008.
The bespoke robots which started fulfilling shipments reportedly brought the "click to ship" cycle down from the 60 to 75 minutes required by humans to just 15 minutes. Later, rechristened as Amazon Robotics, other retailers were offered its automated material handling services which led to a wide opening in the material handling market especially pertaining to eCommerce applications. Complementarily, Fluence Automation, LLC. in August 2018, had announced the acquisition of POST Integrated Solutions (POST-IS) which was a parcel processing and material handling technology company that served the eCommerce markets, among others, facilitating Fluence Automation’s technology offerings along with complementing the former’s efforts in the surging eCommerce automation space, thereby empowering customers to reduce costs and delivery timeframes by increasing production speed in their eCommerce operations, among others.
Fork-Lift Trucks; Other Works Trucks Fitted With Lifting or Handling Equipment, Imports
In Thousands of US Dollars
Source: International Trade Centre
Further, in November 2018, Honeywell International Inc (NYSE: HON) had announced the completion of the acquisition of Transnorm which is a global leader in high-performance conveyor solutions, which are employed by diverse end-user markets comprising airport industries, e-commerce fulfillment, and parcel delivery, from IK Investment Partners for approximately €425 million. Complementing Honeywell Intelligrated business, Transnorm was reported to be a part of Honeywell Safety and Productivity Solutions (SPS), enabling Honeywell’s expansion of its portfolio of warehouse automation solutions. Since the advent of eCommerce and the rate at which it has proliferated around the world, especially due to the spread of COVID 19 (B2C & D2C centric eCommerce are being referred), the market pertaining to material handling also reported quite a few product launches during the past few years.
Later, the COVID 19 crisis severely affected the global manufacturing, metal and mining landscapes with outcomes common to those endured during the past crisis periods starting with second oil shock between 1981-1987, then onto the collapse of Soviet Union during 1991-1994 till commodity price crisis between 2015-16, like price shock, followed by demand shock subsequently the new supply-demand equilibrium. Further according to the estimates by Committee for the Coordination of Statistical Activities (CCSA) the fall in global products and manufacturing output was 9% year-on-year and the value of the merchandise was expected to fall during the second quarter of 2020. Taking the example of metals and mining as well as manufacturing, which have been contributing to the material handling market growth long before eCommerce existed, the first phase of price shock has already passed and these industries are currently facing the subsequent phases of demand shock and the new supply-demand equilibrium
Iron Ores and Concentrates, Incl. Roasted Iron Pyrites, Exports
In Thousands of US Dollars
Source: International Trade Centre
To this end, it is important to note that demand for commodities like zinc, iron ore, and copper remained low corresponding to a lower near-term demand outlook for the same. With falling demand in construction among others, the demand for thermal and metallurgical coals and iron ore are estimated to be severely affected. Further, as countries have been affected during various times and to a varied extent, the supply correction too is expected to vary, as exemplified by the hiatus in the global supply of Uranium, whereby a reduction of the total supply by 50% occurred when Kazakhstan stopped production during May 2020. Nevertheless, few commodities that are driven by end-users like agriculture in the case of potash, will remain resilient, among others. Further with China along with a few other countries which are gradually emerging out of the COVID 19 crisis will witness the manufacturing, metals, and mining resuming operations to full speed. In total, the global mining sector is estimated to remain relatively resilient, partly due to lower energy prices which in turn is expected to reinvigorate the automation industry.
A few notable developments during 2020 that suggest a healthy growth of the market especially pertaining to those of metals and mining industries, among others, during the next few years are as follows:
January – Acquisition
The Canadian leader in the design, manufacture, and adaptation of attachment equipment for heavy machinery, GRYB, had reportedly announced the acquisition of 100% of Winkle Industries and its subsidiaries LiftTech Field Services and PROEN Engineering Solutions. The latter is based out of Alliance, Ohio, USA, and is known as the leading supplier of material handling solutions and engineered mechanical solutions and contract manufacturing services. This strategic decision enables GRYB to enter the US market ad establish itself as the industry leader with unparalleled materials handling product offering, ultimately contributing to the share of mobile cranes which find its applications in mining, demolition construction, among others.
May – Product Launch
Terex Corporation (NYSE: TEX) reportedly launched a new range of products to address the needs of the bulk material handling and product stockpiling applications, called the ProStack range has been designed for key markets and applications aggregates, agriculture, mining, ports and terminals, recycling, and many other bulk material handling industries.
July – Product Launch
Doosan Infracore Europe launched, DL420-7 Stage V wheel loader that reportedly features increased fuel efficiency with higher performance and a conducive operator environment featuring a spacious and ergonomically designed cab along with innovative features facilitating higher productivity, increased controllability, and operator comfort. Further, with a standard bucket capacity of 4.5 cubic meters, it is the largest in its class. Its smooth and responsive hydraulics and auxiliary hydraulic connections make it ideally suitable for material-handling solutions for construction, demolition, mining and quarrying, recycling, and waste management.