Are you curious about material handling? Material handling is the process of moving, storing, controlling, and protecting materials, goods, and products. It is essential for the efficiency, safety, and profitability of any business that deals with physical goods.

However, material handling is not a static field. It is constantly evolving and adapting to the changing needs and challenges of the industry. In this article, we will explore some of the key material handling trends that are shaping the future of the industry and how you can benefit from them.

Trend 1: Automation and Artificial Intelligence

Automation and artificial intelligence (AI) are revolutionizing material handling. They can help reduce human errors, labor costs, and operational risks while enhancing speed, accuracy, and flexibility. Here are some examples of automation and AI applications in material handling:

• Automated storage and retrieval systems (AS/RS): These systems use robots, conveyors, and software to store and retrieve items from high-density racks.
• Automated guided vehicles (AGVs) and autonomous mobile robots (AMRs): These vehicles transport materials and goods within warehouses and factories without human intervention.
• Digital automation platforms: These platforms integrate and orchestrate various material handling systems and solutions using data-driven decision-making and cloud computing.
• Artificial intelligence algorithms: These algorithms analyze data from sensors, cameras, and RFID tags to optimize inventory management, demand forecasting, and order fulfillment.

According to a report by Interact Analysis, the global warehouse automation market will experience some growth in 2024 and return to pre-pandemic levels by 2025.

Trend 2: Cybersecurity and Fraud Prevention

Cybersecurity and fraud prevention are vital for material handling. As material handling systems become more connected and digitalized, they also become more vulnerable to cyberattacks and fraudulent activities. These can compromise sensitive data, customer trust, business continuity, and financial health. Here are some examples of cybersecurity and fraud risks in material handling:

• Ransomware attacks: These attacks encrypt and lock the data and systems of material handling companies and demand payment for their release.
• Phishing scams: These scams trick material handling employees or customers into revealing their personal or financial information or clicking on malicious links or attachments.
• Data breaches: These breaches expose the confidential information of material handling companies or their clients to unauthorized parties.
• Identity theft: This theft uses the stolen information of material handling employees or customers to commit fraud or other crimes.

According to MHEDA, companies need to enlist both internal and external partners to protect against this threat.

Trend 3: Environmental, Social, and Corporate Governance

Environmental, social, and corporate governance (ESG) are important for material handling. ESG refers to the standards and practices that measure the environmental, social, and ethical impact of a company’s operations and activities. ESG compliance can help material handling companies improve their reputation, customer loyalty, employee engagement, and regulatory compliance. Here are some examples of ESG factors in material handling:

• Environmental factors: These factors include energy efficiency, carbon footprint, waste management, and pollution prevention.
• Social factors: These factors include human rights, labor conditions, health and safety, and diversity and inclusion.
• Corporate governance factors: These factors include board structure, executive compensation, shareholder rights, and business ethics.

According to MHEDA, members need to be cognizant of ESG and potential customer and supplier demands for ESG compliance.

Trend 4: Procurement and Contracting Challenges

Procurement and contracting challenges are common for material handling. As material handling customers become more sophisticated and demanding, they are modifying their procurement processes and requiring more favorable terms, rebates, and complimentary services from their suppliers. This can impact the cash flow and profitability of material handling companies and pose a risk to their business relationships. Here are some examples of procurement and contracting challenges in material handling:

• Online bidding platforms: These platforms allow customers to compare and select the lowest-priced material handling suppliers and solutions.
• Reverse auctions: These auctions force material handling suppliers to bid against each other and lower their prices to win contracts.
• Long-term contracts: These contracts lock material handling suppliers into fixed prices and volumes, regardless of market fluctuations and inflation.
• Performance-based contracts: These contracts link material handling suppliers’ payments to their service levels and customer satisfaction.

According to MHEDA, larger end-users are demanding these terms and conditions from material handling suppliers.

Trend 5: Forklift Inventory and Rental Issues

Forklift inventory and rental issues are relevant for material handling. Forklifts are one of the most common and essential material-handling equipment in the industry. However, the forklift market is facing some challenges and changes that affect the inventory and rental of forklifts. Here are some examples of forklift inventory and rental issues:

• Declining orders for new forklifts: This is due to the economic uncertainty and supply chain disruptions caused by the pandemic.
• Decreasing prices and utilization of used forklifts: This is due to the oversupply and reduced demand in the market.
• Increasing requirements to order new forklifts: This is due to the obsolescence and maintenance costs of older models and the need to comply with environmental and safety regulations.
• Increasing competition and consolidation in the forklift rental market: This is due to the entry of new players and the acquisition of smaller players by larger ones.

According to MHEDA, these issues are placing pressure on the forklift distributor and cash flow.

Trend 6: Succession Planning and Consolidation

Succession planning and consolidation are ongoing for material handling. Succession planning is the process of identifying and developing the future leaders and owners of a material handling company. Consolidation is the process of merging or acquiring other material-handling companies to increase market share and competitiveness. Both processes can have significant implications for the business valuation and strategy of material handling companies. Here are some examples of succession planning and consolidation in material handling:

• Family-owned material handling companies: These companies face the challenge of transferring the ownership and management to the next generation or selling the business to an external party.
• Independent material handling companies: These companies face the threat of being acquired or outcompeted by larger and more diversified material handling companies or groups.
• Material handling companies that seek to expand their geographic reach, product portfolio, or customer base: These companies acquire or partner with other material handling companies or complementary businesses.

According to MHEDA, the business valuation model will fluctuate along with changing economic conditions.

The Future of Material Handling

The future of material handling is bright and exciting. Material handling companies can leverage the latest technologies, innovations, and best practices to improve their performance, productivity, and profitability. They can also adapt to changing customer expectations, market conditions, and industry standards. Here are some of the possible scenarios for the future of material handling:

• More customization and personalization: Material handling customers will demand more customized and personalized solutions that suit their specific needs and preferences. Material handling suppliers will use advanced data analytics, AI, and automation to deliver tailored and flexible solutions that meet or exceed customer expectations.
• More collaboration and integration: Material handling systems will become more connected and integrated with other systems and platforms. Material handling suppliers will collaborate and partner with other suppliers and stakeholders to create seamless and holistic solutions that optimize the entire supply chain and value chain.
• More sustainability and resilience: Material handling systems will become more sustainable and resilient to cope with environmental and social challenges and risks. Material handling suppliers will adopt green and circular practices that reduce waste, emissions, and resource consumption. They will also implement risk management and contingency plans that ensure business continuity and recovery.

Conclusion

Material handling is a dynamic and evolving industry that faces many opportunities and challenges in the future. By staying informed and prepared for the material handling trends that we have discussed in this article, you can gain a competitive edge and achieve your business goals. If you need any help or advice on material handling solutions, please contact us today. We are happy to assist you with your material handling needs.

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