Amazon.com Inc is rolling out machines to automate a job held by thousands of its workers: boxing up customer orders.
The company started adding technology to a handful of warehouses in recent years, which scans goods coming down a conveyor belt and envelopes them seconds later in boxes custom-built for each item, two people who worked on the project said.
Amazon has considered installing two machines at dozens of more warehouses, removing at least 24 roles at each one, these people said. These facilities typically employ more than 2,000 people.
That would amount to more than 1,300 cuts across 55 U.S. fulfillment centers for standard-sized inventory. Amazon would expect to recover the costs in under two years, at $1 million per machine plus operational expenses, they said.
The plan, previously unreported, shows how Amazon is pushing to reduce labor and boost profits as automation of the most common warehouse task – picking up an item – is still beyond its reach. The changes are not finalized because of vetting technology before a major deployment can take a long time.
Amazon has rapidly opened warehouses across the United States to deliver goods faster, becoming a major employer. Now, the retailer is starting to automate a central role in those facilities: boxing customer orders.
Amazon is famous for its drive to automate as many parts of its business as possible, whether pricing goods or transporting items in its warehouses. But the company is in a precarious position as it considers replacing jobs that have won its subsidies and public goodwill.
“We are piloting this new technology with the goal of increasing safety, speeding up delivery times and adding efficiency across our network,” an Amazon spokeswoman said in a statement. “We expect the efficiency savings will be re-invested in new services for customers, where new jobs will continue to be created.”
Amazon last month downplayed its automation efforts to press visiting its Baltimore fulfillment center, saying a fully robotic future was far off. Its employee base has grown to become one of the largest in the United States, as the company opened new warehouses and raised wages to attract staff in a tight labor market.
The new machines, known as the CartonWrap from Italian firm CMC Srl, pack much faster than humans. They crank out 600 to 700 boxes per hour or four to five times the rate of a human packer, the sources said. The machines require one person to load customer orders, another to stock cardboard and glue and a technician to fix jams on occasion.
Though Amazon has announced it intends to speed up shipping across its Prime loyalty program, this latest round of automation is not focused on speed. “It’s truly about efficiency and savings,” one of the people said.
Including other machines known as the “SmartPac,” which the company rolled out recently to mail items in patented envelopes, Amazon’s technology suite will be able to automate a majority of its human packers. Five rows of workers at a facility can turn into two, supplemented by two CMC machines and one SmartPac, the person said.
The company describes this as an effort to “re-purpose” workers, the person said.
It could not be learned where roles might disappear first and what incentives, if any, are tied to those specific jobs.
But the hiring deals that Amazon has with governments are often generous. For the 1,500 jobs Amazon announced last year in Alabama, for instance, the state promised the company $48.7 million over 10 years, its department of commerce said.
Amazon is not alone in testing CMC’s packing technology. JD.com Inc and Shutterfly Inc have used the machines as well, the companies said, as has Walmart Inc, according to a person familiar with its pilot.
The machines have the potential to automate far more than 24 jobs per facility, one of the sources said. The company is also setting up nearly two dozen more U.S. fulfillment centers for small and non-specialty inventory, according to logistics consultancy MWPVL International, which could be ripe for the machines.