Take advantage of new OBBBA tax codes to enable automation.
The One Big Beautiful Bill (OBBBA)reshapes how businesses can expense automation and material handling equipment. The law permanently restores 100% bonus depreciation, increases Section 179 expensing limits, and introduces a new category for Qualified Production Property (QPP -139 STAT. 198)
For warehouse operators, integrators, and distributors — this means you can immediately deduct most automation investments if the requirements are met.
Under Sections 179 and 168(k), eligible equipment is defined as:
Tangible personal property used in an active trade or business.
Machinery and equipment with a useful life over one year.
Sec. 70301: Full expensing for “qualified business property”
Sec. 70306: Raises expensing cap to $2.5 M with a $4 M phase-out
Sec. 168(k): Permanently reinstates 100% bonus depreciation
Sec. 168(n): Creates a new category for “qualified production property” used in U.S. manufacturing or production.
These provisions apply to property acquired and placed in service after Dec 31, 2024 (for QPP, construction beginning after Jan 19, 2025).
What Equipment Is Eligible?
Equipment Type
Eligible for Deduction?
Overhead conveyors, belt conveyors, roller conveyors (bolted or mobile)
High probability of qualifying as sec. 179 or sec. 168(k) property (movable, not structural)
AGVs, AMRs, sorters, robotic arms
Typically qualifies as machinery, assuming they are not permanently integrated into walls/structure
Palletizers, pallet conveyors, depalletizers
Typically qualifies as machinery, assuming they are not permanently integrated into walls/structure
Picking/GTP systems, order fulfillment equipment
If considered interior improvements/nonstructural, may qualify under sec.179 or sec.168(k)
Mezzanine floor add-ons for sortation / conveyor access
If considered interior improvements/nonstructural, may qualify under sec.179 or sec.168(k)
Racking systems
If considered interior improvements/nonstructural, may qualify under sec.179 or sec.168(k). Ceiling supporting racking may not be eligible
Embedded track systems or conveyors within floors
May be considered structural – eligibility assessment would be required
Elevators and lifts built into building structure
Usually considered structural and excluded from eligibility
Electrical distribution, wiring, controls, compression, safety systems
Eligible to the extent they are deployed for qualifying machinery (and are not for the general facility structure)
Because the line between “machinery” and “structural” can be difficult to define, the utility of the equipment, method of integration, and whether the system can be moved or reconfigured will all factor into the evaluation
Qualified Production Property (QPP)
This new category allows 100% expensing for equipment directly tied to production activities, such as conveyors or MHE systems.
Key criteria:
Construction must begin Jan 19, 2025 – Jan 1, 2029
Must be placed in service by Jan 1, 2031
“Original use” starts with the taxpayer
Must elect this treatment on your tax return
QPP property used for non-production (like offices or parking) does not qualify.
Why Should I Act Now?
Sec. 179 enhancements and bonus depreciation under OBBBA apply only to property placed in service after December 31, 2024.
The law also raises the caps but those limits might evolve or be tightened in the future if funds or political winds shift.
QPP’s window for construction start is January 19, 2025 to January 1, 2029, and service by January 1, 2031
Because these rules are new, IRS guidance or auditing practices may take a conservative view in early years. Early adopters who document to current regulation may get a proactive benefit.
Although Sec.168(k) bonus depreciation is now permanent under OBBBA, that doesn’t guarantee there won’t be future legislative changes that peel back current code.
The No. 1 risk is delaying: if you push a capital project into a later year, you may lose certainty, or face stricter scrutiny or regulatory adjustments.
In short: the sooner you plan and execute qualifying automation or material handling investments, the more likely you can lock in favorable treatment under current law.
Contact Century
How Century Can Help
Century specializes in engineering automation systems that meet budget and efficiency goals. We can evaluate your facility for qualifying improvements – the majority of equipment we integrate would be eligible for the new deductions.
Our proposals include detailed equipment and materials documentation for deduction filing and if a project is started now (estimate a year on average for a system integration) the tax stipulations can be met quickly before any future rollbacks or adjustments are made.
If you are planning your next system, there hasn’t been a more favorable time to make the automation leap.
Automation equipment solutions that drastically optimize 3PL and FC/DC shipping operations.
Third-party logistics providers (3PLs), distribution centers, and shippers face a highly demanding operational environment: rapidly changing customer needs, SKU proliferation, same-day/next-day expectations, variable case dimensions/types, and cost pressures on labor, transport, and real estate. The need to deliver fast, accurate, and flexible fulfillment amid a large and complex inventory offer significant opportunities for MHE automation integration.
Remove slow manual ops and reduce reliance related to staffing
Improve accuracy and reduce returns or costly shipping errors
Support omnichannel fulfillment (B2B, B2C, eCommerce)
Ability to handle pallets, polybags, cases, totes, and other package types
Achieve better facility space utilization and continuous flow
Provide real-time visibility, diagnostics, and agility
Boost profits with quick system ROI, fast order throughput, and reduced labor overhead
The current struggles of the 3PL, distribution & fulfillment industry
Challenge
Impact
Automation Solution
Labor constraints & turnover
High costs of recruiting, training, and managing staff
Automates repetitive or strenuous tasks, removes need for manual labor
SKU proliferation & variable order types
Increased complexity in picking, sorting, and staging
Dynamic routing, sortation, and handling solutions adapt to changing SKUs
Mixed-mode order fulfillment (parcel, case, pallet)
Manual movement and bottlenecks increase error rates
Integrated systems can route items across modes seamlessly
Congestion & bottlenecks at docks / staging areas
Delays, inefficiencies and processing confusion
Conveyor lines, AGVs/AMRs, sortation automation streamline flow and reduce waste
Inaccurate or delayed order processing
Customer dissatisfaction, returns, chargebacks
Integrated WCS/WMS, accurate order fullfillment/GTP, and proper scan/print/apply operations
Underused vertical space or a cluttered warehouse floor
Underutilized space resulting in slow ops or a need to spend on additional warehouse space
AS/RS, mezzanines, hanging conveyors, vertical shuttles and more help maximize cubic space
These challenges are especially acute when serving multiple clients with varying product types and processing needs. The ideal conveyor or automation system setup must be modular, scalable, and adaptable, so changes in order patterns or clients can be adjusted without significant disruption to daily ops.
Conveyor & Sortation Equipment
Conveyors remain fundamental in 3PL ops, moving items efficiently through pick, sort, and shipping zones. Sorters typically are the core of the automation system, rapidly scanning and directing parcels to outbound lanes. Many automation systems can be dropped into an existing system, or engineered into an overall conveyor network (as opposed to a standalone and disparate unit).
Zero-pressure accumulation, diverters, buffer zones, and scanning stations optimize routing and prevent jams. For small parcels, modular belt and roller systems work alongside tilt trays or cross-belt sorters to direct items to zones or outbound lanes.
Crossdocking is a common method of immediately receiving, distributing, processing, and then shipping incoming orders without storing inventory.
Pallet Handling Equipment
Pallet roller and chain conveyors, pallet transfer cars, turntables, and build/break/singulate automation keep pallets flowing between docks, staging, and storage, reducing reliance on forklifts and manual handling.
Robotic arms (with grippers or vacuum tooling) can handle cases or cartons for order building. For full or mixed pallets, robotic palletizers arrange layers based on order specs or destination. Depalletizers automate inbound pallet breakdown, inducting cases onto conveyor flows.
Autonomous Mobile Robots (AMRs) & AGVs
AMRs/AGVs transport totes, carts, or pallets autonomously among receiving, storage, pick zones, and shipping docks. They reduce labor burden and improve flow flexibility. They are ideal in facilities with complex routing, varied GTP operations, non-conveyables, or slow-moving slotting operations.
Automated Storage Retrieval Systems (AS/RS)
In high-density, high-throughput operations, AS/RS systems (shuttle, mini-load, unit-load) store and retrieve pallets or totes with minimal human intervention. Integration with conveyors allows seamless storage and retrieval operations to continue flowing with processing operations.
Goods-to-Person (GTP) Systems
Goods-to-Person systems eliminate walking and searching by bringing stored inventory directly to the operator. Totes or trays are automatically retrieved and delivered to ergonomic pick stations via shuttles, lifts, or conveyors. This setup shortens pick paths, increases throughput, and improves accuracy. GTP systems are ideal for high-SKU 3PLs that manage diverse client inventories with rapid order turnaround.
Picking Systems
Picking automation improves speed and accuracy across order fulfillment processes. Technologies such as pick-to-light, voice-directed picking, and robotic piece-picking arms guide operators or perform picks autonomously. Integrated scanning and verification reduce errors, while conveyor or AMR-assisted movement ensures efficient replenishment. These systems help 3PLs handle fluctuating order volumes and SKU variety with consistency and reduced labor dependency.
Order Fulfillment Automation
Order fulfillment systems coordinate picked goods into complete, labeled, and ready-to-ship orders. Automated or manned sortation, packing, and labeling stations streamline the final stages of processing. Integration with WMS/WCS software provides real-time visibility into order status, inventory, and carrier routing. For 3PLs, this ensures fast, accurate shipments across multiple clients, improving SLA performance and reducing handling time per order.
Investing in automation is not a plug-and-play undertaking. Century completes significant planning to understand your facility, the product handled, goals and objectives, ROI, budget, demand forecasting, future installations, barriers or sources of waste, and many more factors before engineering begins.
Once those key insights are captured, Century engineers will design preliminary system layout drawings with automation equipment recommendations that best fit.
System Support, Fine-Tuning, & Equipment Maintenance Service
Contact Century
Let’s Talk Automation for Your Distribution Operation
3PL, distribution centers and fulfillment centers are under constant pressure to adapt faster, deliver better, and expand profitability. Strategic automation can offer that competitive edge. Century engineers assemble the puzzle that is your automation system in a cost-minded yet efficiency-guided manner. Our goal is to provide the most optimal system for you, not sell the most expensive or overperforming one.
Contact us to explore how we can transform your operation with automation
Cheers! The ideal automation solutions for distribution facilities that handle and process a variety of beverages.
Wine, spirits, and beer distributors operate in a uniquely complex environment where high product variety, strict handling requirements, and time-sensitive deliveries converge on a daily basis.
Distribution facilities must manage a varied and ever-changing inventory that includes fragile glass bottles, bulky kegs, and diverse packaging formats, each requiring specialized storage and handling. Seasonal demand spikes, SKU proliferation from new brands and product lines, and mixed-case or mixed-layer orders add further levels of operational difficulty.
At the same time, distributors face constant pressure to maintain accuracy, protect product integrity, and meet tight delivery schedules, all while contending with labor shortages, rising operational costs, and the need to maximize throughput in often space-constrained facilities.
The current struggles of the WS&B distribution industry
Distribution facilities are often challenged by labor shortages, high turnover, and the physical demands of repetitive manual tasks. This makes it difficult to acquire and keep reliable labor while ensuring workers are trained sufficiently on their tasks to maintain processing rates and avoid breakage
Product loss from improper handling can cut into already thin margins, particularly with fragile glass packaging and liquid cargo that is susceptible to breakage, seepage, or spoiling. If defects go by undetected, the client will end up with damaged product which could incur a loss of business if it’s a repeat situation.
As new products and SKU variations continue to proliferate driven by consumer demand for specialty brands, seasonal offerings, and diverse packaging formats - managing inventory complexity becomes increasingly difficult. Currently, younger markets are not consuming “traditional” beverages at the same rate as other consumers, but rather more specialized products like mocktails, energy drinks, mini serving sizes, zero-alcohol items, CBD seltzers, and more.
Mixed-layer order fulfillment (rainbow pallet), a common requirement for retail and hospitality customers, is time-consuming and error-prone when handled manually, while traditional pallet building and singulation processes limit throughput and consistency. Storage and retrieval workflows can also bottleneck when relying solely on forklifts or manual pallet movement. The flexibility of products clients want in their orders add a significant layer of complexity, but properly engineered automation can streamline these ever-popular order requests and make sense of even the most specialized load.
Bridging the gap between production and material handing operations can be a significant pain point for WS&B businesses that run manufacturing or filling operations. Typically, manual processing in this stage is time-consuming and inefficient since it’s difficult to time all parts of the operation without cohesive automation. Many facilities opt to keep each area siloed for control and management purposes, only processing production in a separate line or shift. Automation can connect disparate systems in a continuous, optimized, and visible solution to avoid overcomplication.
By integrating material handling automation into post-production and distribution operations, beverage companies can overcome these pain points – reducing labor dependency, protecting product integrity, efficiently managing growing SKU counts, automating complex order building, and streamlining storage and retrieval for faster, more reliable fulfillment.
Conveyor Equipment
Case conveyors are ideal for picking and sortation zones, transporting cartons of wine, beer, or spirits from depalletizing stations or replenishment zones through WMS-directed routes to fulfillment lanes. The layout would support both zone-based and batch picking strategies, with diverters, labelers, and barcode scanners integrated along the line for accurate routing and tracking.
Zero-pressure accumulation zones can be used to protect fragile products from impact, while elevation changes and spiral conveyors would connect case flow to mezzanine levels or sorting chutes for outbound staging, ensuring fast, controlled movement of individual cases throughout the order cycle.
Motorized pallet conveyors form the backbone of the facility’s heavy-load transport system, linking dock doors, staging areas, palletizers, mixed-layer pallet building terminals, wrappers, and storage lanes in a continuous loop.
Pallet conveyors are the typical entry choice for a beverage distributor looking to begin automating their facility, as the system can replace costly lift-truck operations while increasing constant movement, stability, and flexibility.
Designed with chain-driven or roller-driven modules depending on pallet weight and size, these conveyors can be engineered to support both uni-directional and bi-directional flow, enabling the smooth transfer of full or mixed-product pallets across the warehouse. Strategically placed transfer cars or turntables would allow for layout flexibility and efficient movement between perpendicular lines or multi-zone operations without requiring manual processes.
Pallet Handling Equipment
Robotic palletizers can be deployed near the end of the case conveyor picking lines to automatically build mixed or full-SKU pallets based on dynamic customer orders, using layer-forming tables and programmable patterns suited for cases of bottles or cans.
Depalletizers can be installed at the receiving side of the warehouse or near sortation zones, where they would unload inbound pallets and singulate cases directly onto conveyors for putaway or replenishment.
These robotic arms are usually outfitted with vacuum suction cups to handle a variety of case dimensions common in beverage distribution. End-of-arm tooling can expand it’s ability to handle single bottles (for packaging), kegs, or specialized non-conveyables (mini-kegs, bagged liquids, oversized promotional items, etc.)
For mixed-layer orders the ideal solution can be an automated layer picking system using flow rack, a central pallet conveyor line, and an overhead gantry palletizer. This setup automates highly-technical mixed SKU orders that are difficult to process manually without error.
In a high-throughput wine, spirits, or beer distribution center, ASRS units would be engineered into the facility’s racking layout to enable automated vertical and horizontal storage of full pallet loads, typically segmented by product type, SKU velocity, or expiration date. An ASRS unit automatically retrieves and stores pallets, transporting the load on a large shuttle and inducting it to an outfeeding pallet conveyor source.
Integrated AGVs (automated guided vehicles) or AMRs (autonomous mobile robots) would be programmed to transport pallets between receiving, storage, picking, and outbound staging zones without requiring human-operated forklifts. These mobile units would follow predefined paths or dynamically update routes based on real-time WMS instructions, supporting both full pallet movement and partial pallet replenishment, and eliminating congestion in high-traffic dock or pick areas. This is ideal for slower moving operations
Ancillary Automation
Pallet lifts would be installed to vertically move full or empty pallets between ground-level conveyors and upper-level storage or mezzanines, particularly in multi-tiered facilities where vertical space optimization is key. This eliminates the requirement for a forklift and removes the vertical retrieval limitations associated with running lift equipment. Pallets can be stacked much higher with upper-level equipment or structural racking and processing these orders can be achieved with lifts and proper conveyor routing.
Stackers would be located at inbound and outbound docks or near robotic palletizers to automatically handle empty pallets for reuse or staging, maintaining a consistent supply of pallets without manual stacking. Stackers can be integrated into a pallet conveyor line that can automatically induct itself when an empty pallet is called for processing.
Automatic stretch wrappers (or strappers in some situations) would be positioned near the end of the fulfillment line, integrated with pallet conveyors, to automatically rotate and wrap completed loads using stretch film. Certain wrapper units can be equipped with scales for outbound weight checks and WMS verification.
These systems can be deployed as stand-alone units or integrated within a line to maximize automation while decreasing reliance on manual labor.
See a Century wine and spirits distribution system in action
Wine, spirit and beer distributors have a fair share of operational challenges within their industry. Coupled with the current shift to specialized drinks with less demand for traditional beverage offerings, operators are looking for solutions to remove barriers and costs while pivoting their inventory to what’s selling.
Century Conveyor can design, build, and provide post-launch support for an automation system engineered precisely to your needs. Our extensive experience in the WS&B distribution industry guides us in engineering solutions that directly solve your top issues while providing efficiency, performance, and ROI.
With U.S. tariffs on Chinese imports reaching up to 145%, supply chain disruptions have once again taken center stage for American businesses. Rising costs, extended lead times, and increased uncertainty have prompted many companies to reevaluate their operations and seek sustainable solutions.
Across industries, firms are responding with bold investments in domestic infrastructure, automation upgrades, and new logistics strategies. Here’s how major players are adapting—and how you can too.
Logistics Industry Response to Tariffs: Movements by Key Players
Temu recently reversed planned price hikes by adopting a “local fulfillment model,” partnering with U.S.-based sellers to absorb tariff-related costs. This approach mirrors a broader trend: the desire to localize supply chains to preserve pricing power and delivery speed.
Kimberly-Clark is investing over $2 billion into U.S. operations, including an $800M facility in Ohio and a $200M automated distribution center in South Carolina. This expansion is projected to create over 900 jobs and reinforce their supply chain resilience through automation and innovation.
Roche is committing $50 billion over five years to expand drug and diagnostic manufacturing in the U.S., reducing dependence on imports and aligning with a national movement toward domestic production.
Prologis reports that customers are proactively increasing inventory levels to mitigate risks associated with potential tariffs. This strategy involves seeking additional warehouse space and short-term storage solutions, particularly through third-party logistics providers. Notably, some 3PLs have experienced a rise in space utilization from 83% to over 90%. The company has observed a 20% decline in its typical leasing activity, signing approximately 80 leases totaling over 6 million square feet in the past two weeks
Hershey, Amazon, Hasbro, and PVH Corp. are also actively reengineering operations:
Hershey launched a new 250,000 sq. ft. processing plant to enhance U.S. capacity.
Amazon is building a 930,000 sq. ft. cross-dock facility in Mississippi to streamline regional distribution.
Hasbro is cutting Chinese reliance to a single factory.
PVH is consolidating warehouse operations to boost efficiency by up to 90%.
Supply Chain Automation as a Tariff-Proofing Strategy
Rather than pause modernization efforts due to uncertainty, many companies are doubling down on automation—recognizing that it’s a hedge against both labor shortages and tariff turbulence.
Why Automation Now?
Certain automation OEMs will soon raise prices if they rely on imported raw materials
Companies that nearshore will require more labor; automation reduces workforce dependency
In-house services limit exposure to tariff-influenced vendor pricing
Uncertaintly prevails in this current market - but automation is a constant growth goal
Customer buying behavior is expected to decline, consolidatation of capital and inventory may be in order
In a recent survey by C.H. Robinson, shippers said the top risk to their supply chains in 2025 is changes in tariffs and trade policy.
Nearly 50% said the uncertainty around tariffs and trade policy is a pain point for them today.
Survey results also show shippers are actively preparing for changes in tariffs and trade policy, including analyzing their existing customs data, identifying alternative suppliers, and re-evaluating their cross-border strategies.
Century’s Approach: Modular Automation for a Flexible Future
When optimizations are require to grow, but the cost of a complete overhaul is too big a bite to chew – phasing, retrofits, modernizations, and preventative maintenance are solutions Century often recommends to our clients.
In the current turmoil of trade policy, shifting supply chains, and not knowing what fees could be implemented in the future – it makes sense to minimize cost while gradually moving logistics in-house. This usually takes the form of automation, which can also be used to pivot to new product lines, services, or to take advantage of growing demand.
Century has had success integrating client systems with this method, since our focus is on maximizing your efficiency while maintaining cost-effectiveness and innovative engineering.
Best Use Cases:
Proactively avoid rising costs related to current trade uncertainty
Automate in a meaningful, yet budget-friendly project approach
Remove inefficent operations and waste by identify areas that are prime candidates for automation
Eliminate headaches and cost related to finding reliable warehouse staffing
Move costly outsourced partners to an in-house model with automation
Phasing
Splitting a distribution facility project into phases that incrementally automate specific sections of your ops is a viable “two-birds-one-stone” solution.
When optimizations are require to grow, but the cost of a complete overhaul is too big a bite to chew – phasing the project into distinct segments that allow daily ops to be completed in tandem is a solution Century often recommends to our clients.
Benefits
Budget minded - break a large capex project into cost-digestible phases
This makes executive buy-in and allocations easier to acquire
Implement new automation technology where it counts
Open new lines, maximize space, eliminate manual ops, and grow business quicker
A phased approach gives more time to train, test, and capture results for each new installation
Phasing may be the solution to getting your automation plans off the ground.
Unfortunately, conveyors don’t age as gracefully as a classic car or a vintage bottle of wine. Running equipment that exceeds 25 years of constant operation most likely means you’re not operating optimally.
Older conveyor systems come with the usual gamut of maintenance issues. Excessive downtime, hard-to-find parts, and a general decrease in mechanical functionality due to age and wear. But, the greatest negative of all is the lack of technology. Retrofitting modern and advanced equipment can inject new life into an operation.
Benefits
Keep your system layout, simply remove and update the obsolete or worn equipment with new units
Achieve higher order fulfillment and throughput rates
Re-sell your old equipment
Avoid failures and inefficiencies related to running old equipment
Certain solutions - like a large sorter, can completely revolutionize operations
Retrofits are a future-proofing and cost-effective method to implement new automation tech.
If the equipment in your distribution facility are operating as expected, the key to squeezing every last drop of efficiency out of your system is proper modernization. The goal of this method is to update the ancillary components of your equipment.
Think photoeyes, scanners, sensors, controls, WMS, WCS, and other readily deployable systems. The mechanical foundation of your conveyors stay the same, but the information capturing parts are updated to modern standards.
Benefits:
Upgrade to latest photoeye, sensor, and controls generation
Gather valuable data and insights about your system to guide future decisions and investments
Enable powerful WCS and WMS platforms for warehouse management, visibility, and inventory data
Re-use your equipment - most cost effective option when compared to phasing and retrofits
Make the most of your current setup with proper modernization
If phasing, retrofits, and modernization don’t fit the bill for your system, the absolute bottom line for optimization is ensuring your equipment doesn’t break down.
Downtime can destroy profits and leave operations halted until a conveyor tech can be dispatched on-site or a specific part is received. A Century PM contract offers routine servicing and part replacement on a frequency you decide. Having a PM in place brings peace-of-mind knowing your equipment won’t break down and is mechanically cared for on a regular basis.
Benefits:
Avoid costly system failure situations and halted operations
Extend the life of your conveyor system
Peace of mind that your conveyors are always being routinely serviced
Site visits can be custom built to your needs, and the same tech can service your equipment each time
Catch when parts need to be replaced before they fail - allows time for component shipping
Eliminate unsafe situations or band-aid solutions in your system
Century’s PM Program is flexible enough to meet your needs and budget.
Certain policies and programs can help shippers, manufacturers, and distributors avoid tariff fees. While not applicable to all businesses – spending time evaluating your current supply chain with these trade options can save thousands if it’s approved.
Free Trade Zones (FTZ)
General Purpose FTZs are typically large warehouses or industrial parks, and are ideal for companies that need to store finished products, equipment, parts, or other goods. Space is leased according to a company’s individual storage needs, and can be used continuously or on an as-needed basis.
No duties on imported goods that are later re-exported
Delayed payment of duties on goods entering the US market
No duties on waste, scrap, or defective parts
More efficient supply chains
Inverted Tariff – gives companies the option of paying duty on a finished product or on the individual components—whichever is lower.
Special Trade Programs
Businesses should explore various special trade programs that can offer tariff relief under specific circumstances. Chapter 98 of the Harmonized Tariff Schedule, for instance, includes provisions that allow for tariff mitigation in certain scenarios, such as:
Temporary Importation Under Bond (TIB): This program allows for duty-free importation of goods intended for export within a specified period.
American Goods Returned Declaration: This program allows some U.S.-origin goods to be returned to the country duty-free as long as there was no substantial transformation abroad.
Generalized System of Preferences (GSP): Under this program, certain products can be imported from designated beneficiary countries in the developing world duty-free.
Quick Summary
Future-proofing and enabling an adaptable and tech-focused supply chain is the best way to prepare for fluctuating trade policies. Understand the current landscape of your businesses’ industry and the impact of tariffs on the supply chain and adjust accordingly.
Streamlining and cutting the fat from your supply chain process by evaluating services and technology to transition to a more controllable internal model can avoid surcharges from 3rd-party suppliers.
Nearshoring and reshoring: Companies should evaluate the feasibility of moving production closer to end markets to reduce transportation costs and tariff exposure.
Strategic partnerships: Companies should forge alliances with suppliers, logistics providers, and even competitors to share best practices and navigate tariff challenges collectively.
Technology integration: Companies should invest in automation and artificial intelligence to optimize supply chain decisions in real-time and enhance visibility across the entire network. This can take the form of gradual modernization and retrofitting, or a phased system overhaul.
System maintenance – Optimizing your automation equipment from a sweeping project standpoint may not be financially feasible, but retrofitting, modernization, and completing maintenance can offer a viable alternative.
Ready to future-proof your distribution operations?
Let Century help you plan, phase, and implement an automation strategy built for success —even in the face of tariffs.
In modern warehousing, distribution, and manufacturing, pallet conveyors play a critical role in optimizing material handling. These large format conveyors are designed to move heavy, bulk goods quickly (but stable) across a warehouse or distribution facility, reducing manual labor and improving throughput. However, selecting the right type of pallet conveyor depends on the specific needs of an operation, such as load capacity, space constraints, product to be handled, and level of automation.
In this blog, Century will explore the different types of pallet conveyors, how they work, and when to use them in your facility for maximum efficiency.
Pallet Conveyor Equipment Types
Roller Pallet Conveyors
Roller pallet conveyors use a series of metal rollers to transport pallets. They can be either gravity-driven (where pallets move due to incline) or motorized (driven by chains or belts). This solution is the most commonly-integrated pallet conveyor equipment.
Key Features:
Designed for handling heavy loads.
Available in powered and non-powered variations.
Can be customized for pallet size and load weight.
Best Use Cases:
Accumulation: Ideal for buffering and staging pallets before loading or storage.
Sorting & Distribution: Can integrate with scanning and sorting systems.
Warehouse & Manufacturing Lines: Used for transporting pallets between different processing stations.
Use powered roller conveyors when you need controlled movement, and gravity rollers when cost-efficiency is a priority. Gravity works well for slower-moving ops and staging, powered should be used for continuous movement
Chain-Driven Pallet Conveyors
Chain pallet conveyors use chains to move pallets along a fixed path. These conveyors are highly durable and are built for heavy-duty applications. Simplicity in design make maintenance easy and supports slower, more stable operations.
Key Features:
Suitable for handling non-standard or bottom-boarded pallets.
Can handle heavier loads than roller conveyors.
Offers precise pallet control, making them ideal for automated storage and retrieval systems (AS/RS).
Best Use Cases:
Heavy Manufacturing: Great for industries like automotive, steel, and heavy equipment.
Cold Storage: Operates well in extreme temperature conditions.
High-Traffic Areas: Works well in high-volume facilities with heavy palletized loads.
Choose chain-driven conveyors when handling uneven, non-standard, or extra-heavy pallets.
Belt-Driven Pallet Conveyors
Belt-driven pallet conveyors use a continuous belt to transport pallets. These are often used in applications where smooth, gentle movement is required. Often seen as a seldom-integrated alternative to slow-moving gravity applications.
Key Features:
Less vibration compared to roller conveyors.
Can handle a variety of pallet sizes without modification.
Suitable for delicate or sensitive loads.
Best Use Cases:
Fragile Product Handling: Used in food, pharmaceuticals, and electronics industries.
Incline/Decline Conveyance: Works well when moving pallets between floors or height levels.
Light-to-Medium Loads: Best for applications that don’t require heavy-duty transportation.
Use belt-driven conveyors for products that require gentle handling and precise movement.
Drag Chain Pallet Conveyors
Drag chain conveyors use multiple segments of chain to pull pallets along a track. They are designed for applications where pallets need to be moved smoothly and at a consistent pace.
Key Features:
Excellent for transferring pallets between different conveyor sections.
Works with wooden, plastic, and metal pallets.
Often used for 90-degree transfers in automated systems.
Best Use Cases:
Pallet Transfer Systems: When integrating with robotic picking or AS/RS.
Cross-Docking: Moving pallets quickly in a high-speed distribution center.
Heavy Industrial Environments: Common in automotive and manufacturing sectors.
Use drag chain conveyors when handling diverse pallet types or when changing direction in a conveyor system.
Turntable Pallet Conveyors
Turntable pallet conveyors allow pallets to change direction while staying on the same conveyor path. These are often integrated with roller or chain conveyors. Other methods of diverting a pallet can come in the form of roller attachments on AGVs/AMRs or stacker systems that transport full pallets to a higher level (or stack empty pallets).
Key Features:
Provides flexibility in warehouse layouts.
Rotates pallets 90° or 180° to match different conveyor lines.
Reduces the need for manual handling or forklift usage.
Best Use Cases:
Space-Constrained Warehouses: Helps redirect pallets in small layouts.
Multi-Directional Conveyor Systems: Used in complex sorting and fulfillment setups.
Pallet Orientation Needs: When pallets need to be positioned before scanning, wrapping, or unloading.
Use turntable conveyors to improve flow efficiency in confined warehouse spaces.
Transfer Cars & Shuttle Conveyors
Transfer cars and shuttle conveyors allow pallets to be transported across different conveyor lines or multiple warehouse zones. These can come in the form of a simple gravity line, or a complex ASRS or mobile pallet robot system setup.
Key Features:
Offers high-speed transportation across large distances.
Works well in automated and high-throughput facilities.
Can handle multiple pallet sizes simultaneously.
Best Use Cases:
Large Warehouses & Distribution Centers: When moving pallets between different fulfillment zones.
Automated Warehousing: Works in combination with robotic picking and AS/RS.
Multi-Level Operations: Ideal for facilities with vertical storage systems.
Use transfer cars for high-volume, multi-zone material handling in large-scale logistics centers.
What Pallet Conveyor Equipment Type Fits My Needs?
Handling Specification
Recommended Pallet Conveyor Unit
Heavy-Duty Loads
Chain-Driven, Drag Chain
Light-to-Medium Loads
Roller, Belt-Driven
Gentle Handling
Belt-Driven
Cold Storage
Chain-Driven, Drag Chain
High-Speed Transfer
Transfer Cars, Roller
Limited Space
Turntable, Drag Chain
Multi-Directional Flow
Turntable, Shuttle
Pallet conveyors are essential for improving warehouse efficiency, reducing labor costs, and enhancing order fulfillment speed. By understanding the different types of pallet conveyors and their ideal use cases, businesses can design material handling systems that align with their operational needs.
Century Conveyor has completed a variety of pallet conveyor system projects spanning across the wide range of equipment types. Interested in a system? Contact a Century Automation Expert to start planning yours, or explore the range of solutions we can implement in your facility.
With incredible advancements in technology, consumer behavior, and supply chain methodology – 2025 paints a picture of a diverse logistics ecosystem for DCs of all shapes and sizes.
Artificial Intelligence in the Warehouse
To no one’s surprise, AI is top of mind for many operators this year. Mostly focused on how to implement it correctly, 8 in 10 of the respondents said their organizations need a better understanding of how AI can be used in the DC.* AI lends itself to repetitive tasks such as data collection, entry, and inventory management, to name a few.
Managing SKUs and slot positions can be optimized by AI to reduce time spent picking and errors related to manual ops. Implementing AI can expand tracking of items, while providing the best method of processing said items based on warehouse activity data.
Many DCs have achieved 2x productivity gains in piece picking applications using AI-based travel reduction, and even case pick to pallet operations have demonstrated 20-30% productivity gains.*
The sky is the limit when it comes to what AI can do with the warehouse and equipment data it’s provided with. For example, an AI algorithm can process the data related to order fulfillment times, collate all instances, and process a report indicating the slowest fill rates and why that might be (I.E. a conveyor unit jammed at a certain time or a worker is underperforming at a GTP station.)
For 2025- AI in warehouses may only be feasible for the largest companies, but it’ll soon become more accessible and trickle down to mid to small sized operators.
3PL & 4PL Growth
Third-party logistics (3PL) providers’ share of bulk industrial leasing activity (leases of 100,000 sq. ft. or more) rose to 34.1% through Q3 of this year from 30.6% through Q3 last year. 3PLs have accounted for 498 bulk leases so far this year, up by 9% from the 457 at this time last year.
On a quarterly basis, bulk leasing by 3PLs has steadily increased this year, reversing the steadily decreasing trend of 2023.**
The rapid growth of large warehouse operators from the pandemic is essentially finished, as companies like Amazon, Home Depot, and Walmart pull back on lease renewals and warehouse construction. Instead, many are opting to subsidize operations and process orders with 3PLs and 4PLs.
With recent fee structures and bulk rates changing across the board for parcel delivery companies, retailers are looking to axe costs by contracting with a 3PL or last-mile delivery.
3PLs can also offer a specific operational setup that make attractive use cases for retailers and shippers looking to take advantage of automation, but aren’t capable of implementing that system setup in their owned space. For example, crossdocking is a popular in-and-out processing method that companies can use to fulfill regional orders in areas that it wouldn’t make economic sense to operate an owned DC.
Consumer behavior, incoming tariffs, and the always increasing prevalence of eCommerce are other factors that could make 3PLs/4PLs the right choice for companies looking to expand and serve their customers – without breaking the bank on a warehouse.
Always Advancing Automation
Automation is constantly evolving – but it does reach a certain point where manufacturers must innovate somehow to keep up. This leads to companies investing heavily in R&D to continue producing highly optimized automation systems or by creating new specialized equipment. With the adaption of AI, this only fuels both the creation of these systems, and it’s capabilities.
It’s yet another year closer to automatic truck loading becoming a reality. Automation systems like the Picklebot and Mujin Truckbot were showcased at Modex ‘24, with some systems already installed at client facilities. These robots automatically load and unload trailers with a conveyor boom and mechanical “fingers” or vacuum cups that grab the item.
Electric delivery vehicles have been making the rounds for the last few years, but in 2024 Amazon made waves by deploying Rivian EDVs to replace their aging ICE delivery van vehicles. Amazon typically leads the charge in the logistics industry, so their adaptation of delivery EVs will prove to accelerate others to make the switch.
Automation sometimes comes in the form of aiding humans, rather than replacing them. Case in point is the usage of remote-controlled forklifts, rather than a fully automated one. As odd as it sounds, a forklift operator could work remotely via a joystick assembly and a live multi-angle camera feed. The technology is there, but the remains are to be seen if it will see widespread usage.
Secondary automation manufacturers are digging deeper and are engineering drop-in solutions that can drastically modify existing equipment. Are the diverts on your conveyor not keeping up with throughput? A secondary supplier might offer a faster solution that can be retrofitted, rather than replacing an entire unit.
Political Landscape Affecting the Supply Chain
High tariff rates can drastically alter trade between the US and international companies, raising the price of raw materials and goods transported from overseas. This may have companies raising prices to make up the difference, or searching for alternate sources for materials closer to home. China has been a target for high-tariff rates, but other countries have been identified by the administration as potential candidates for tariffs.
A key Trump policy is the need to bring back manufacturing and energy sources to the US. While nearshoring has been a trend in the supply chain due to past overseas delays and geopolitical strains, a concentrated congressional effort should be expected in 2025.
Many unskilled or low-level entry jobs within the supply chain utilize immigrants and temp staffing agencies to complete manual or repetitive tasks. The Trump administration has made it clear that it’ll curb the influx of migrants, decreasing the talent pool operators can hire from. Many facilities have seen the writing on the wall and have invested in gradual automation to eliminate those manual labor tasks altogether.
Crossdocking is a logistical operational method of immediately processing, distributing, and shipping received orders. This practice avoids the excess time, cost, and space related to storing inventory – while greatly increasing order throughput. Crossdocking is a method largely used in hub-and-spoke networks and among third-party and final mile distribution centers. The main operation completed at these facilities is rapid sortation to destination routes.
Key Steps in Crossdocking Operations
Receiving and Unloading
The first step in the crossdocking process is receiving goods at a designated distribution facility. Once the shipment arrives, the products are quickly unloaded from the inbound trucks or containers. The goal here is speed—unloading happens rapidly to ensure that goods spend as little time as possible in the facility.
Stable and rapid automation is key at this stage so downstream operations don’t lag. If pallets are being received, forklifts can induct to a depalletizer (or a pallet conveyor line that leads to depalletization ops) to be broken down for distribution. A singulation unit using a modular belt design can be integrated to automatically position boxes into single file for operations that require packages be processed in a specific direction.
If cartons or parcels are being received, trailer extendables can be used to speed up unloading by reducing manual movement. Depending on the type of parcel, a polybag for example, may need to unload only from certain docks – as those lines may lead to a sorter that can handle the package type. It is not uncommon for a crossdock system to have more than one type of sorter.
Product Handling
After unloading, products are immediately moved to their next destination. This step is crucial, as it ensures that products flow seamlessly through the system. Depending on the type of product and the final destination, goods may either be prepared for outbound shipping or temporarily held in a staging area.
In a crossdocking setup, good-to-person and storage operations are typically not present, as product comes in – sorted – and goes right out. Integrators design crossdock systems to minimize manual labor touchpoints, but since the name of the game is speed, some operations are still aided by associates.
For example, in a recent crossdocking system Century integrated, a Eurosort split-tray sorter was used to handle polybags and crushable soft packages. As the polybags transition from the receiving conveyor line into the sorter, a chute drops the parcels to a short gravity conveyor adjacent to the sorter. An associate takes the parcels and places each one completely flat with no overlaps into its respective tray.
The bomb-bay tray style allowed for 2 small polybags, or 1 large one. Once on the tray, the sorter conveys over chutes, opening the tray down and dropping parcels into the correct destination box.
Sortation
In this phase, goods are sorted according to their end destination. This sorting can be based on criteria such as product type, customer order, or shipping destination. Efficient sortation ensures that the right products are matched with the right outbound orders, reducing the chance of errors and delays.
The type of sortation equipment should be driven by the size of the carton and throughput required to make rate. Small or thin parcels should consider a belt-driven sorter, with rollerball or modular diverts to destination lines. The belt ensures that smaller parcels can’t slip or get jammed in between rollers (which could happen with a gravity solution). Cross-belt and tray sorters are ideal too, as the platform moves rather than the package itself, effectively eliminating jam points.
Midsize to larger packages benefit the most from a roller gravity or slat sorter, as it provides greater speed without concern of stuck packages (like smaller or larger parcels could). Skatewheel, roller transfer, push bars, and plastic shoes are ideal divert methods, and the angle of the divert can be as sharp as 90 degrees. This product size is the best use-case scenario for a crossdock system, as high throughputs can be reached while maintaining stability.
The system used in the video is a Hytrol ProSort – a popular choice for shoe sorters.
Large and bordering on non-conveyable items may need extra care when selecting sortation equipment. Singulation equipment or associate interaction may be required to carefully place large cartons on conveyors inducting to sorters, as improperly placed items can easily snag on transfers, edges, and diverts. Narrow-belts work well at a certain speed, as do push bar and modular diverts. The transition after the diverts should be at a gradual curve – 30 degrees is a common recommendation.
Shipping & Loading
Once sorted, the goods are loaded onto outbound trucks, ready to be shipped to their final destination. Again, speed is key. By minimizing storage time and keeping products moving, companies can dramatically reduce shipping times, improving customer satisfaction and slashing operational costs.
Much like receiving; end-of-line extendables (an Adjustoveyor for example) telescope into an empty trailer to aid workers with loading. If sorted cartons are being palletized, a robotic arm palletizer and an automatic stretch-wrapper can be deployed to quickly build pallets.
There does exist autonomous trailer loading, in the form of large AMRs that can load and unload multiple pallets, and with conveyor-robot arm hybrids (such as Mujin’s TruckBot). This technology is still in its infancy, and prices reflect this, but fully automated trailer loading is no longer a far-off thought of science fiction.
The Benefits of Crossdocking
Reduced Storage Costs: Since goods don’t sit in a warehouse, companies save on storage fees and the overhead associated with managing large inventories.
Increased Efficiency: By streamlining the flow of goods, crossdocking eliminates unnecessary handling steps, speeding up the process.
Improved Throughput: Faster processing times mean that more orders can be fulfilled in less time, increasing the overall capacity of the logistics network.
Lower Risk of Damage: With less manual handling and storage, there is less opportunity for products to be damaged or misplaced.
Enhanced Customer Satisfaction: Faster shipping and fewer delays lead to happier customers, which is crucial for maintaining a competitive edge in today’s market.
Maximize Automation: The nature of crossdocking lends itself perfectly for integration with automation systems. Once a case is received, it typically doesn’t need to be touched by an employee until trailer loading. The upfront investment can be a large pill to swallow, but that investment will quickly return based on the increase of orders and the speed of processing.
Eliminate Manual Labor Roles: With proper automaton integration, the woes of finding and successfully hiring associates is drastically decreased. Certain roles may be completely eliminated – saving money allocated towards payroll, hiring, and training. In the event of the obsolescence of forklifts (or several of them) because of automation deployment, the equipment can be sold or used at another facility in the network.
Should I Implement Crossdocking?
While crossdocking offers numerous advantages, it may not be the best fit for every operator. Since order fulfillment, goods-to-person, and storage are mostly absent from crossdocking operations, any facility that manages those processes may not benefit from a crossdocking setup
It works particularly well for companies that:
Handle perishable goods that need to move quickly through the supply chain (e.g., food, pharmaceuticals)
Distribute high-demand products with predictable order patterns
Have a strong logistics infrastructure that supports quick turnover and high throughput
Industries like 3PLs, last-mile, extensive eCommerce operators, and large retailers with multiple locations are ideal candidates for crossdocking.
Conveyors are often viewed as durable, reliable, and low-impact automation equipment – and for good reason. Constant operation and rapid start and stop movements are just a few of the requirements for the daily life of a conveyor. Distribution center and warehouse operators rely on the mechanical ability of their processing equipment to fulfill orders – while conveyors rely on its owners to properly service and repair units when needed. Even with a reputation of being fiercely reliable – routine maintenance and repairs require proper inspection and remedy by a certified conveyor technician.
Century has seen it all, from jerry-rigged repairs, safety violations, and inefficiencies – all in an effort to avoid spending on conveyor maintenance. Usually, it’s not until something goes wrong that we receive that emergency service call, in which case – it’s already too late for avoid downtime losses.
Never fear! Identifying these issues visually, early, and with the help of a conveyor technician isn’t necessarily an overtly difficult or expensive task. For example, rather than letting a conveyor shred belts over and over because it isn’t tracked correctly is a source of waste. Belt tracking is one of the first repairs our technicians learn and any respectable conveyor repair company should be able to track with zero hangups. This sentiment is the same with many conveyor maintenance items – simple and straightforward repairs that require the proper knowledge so that it doesn’t occur in the future.
Excessive Dirt and Debris
The Issue Conveyors that handle loose materials or are located in areas of increased dust and debris particles are prime contenders for issues. Dirt can attach easily to motors, rollers, side channels, and electrical components due to its proximity to the source of the debris – typically the product being handled.
Example Companies that operate trash conveyors that take away corrugate refuse encounter this problem repeatedly, due to the constant creation of cardboard fibers and small pieces of adhesive. Transfer and curve sections can also be a hotspot for debris, as the cartons make dropping or turning movements, releasing corrugate debris or having labels get stuck in pinch points. Gear oil, liquids from the product handled, or spillage can also build up and attract additional particles. While post-production material handling isn’t supposed to be a cleanroom operation, years of filth can certainly have a negative effect on your conveyor system by adding strain and shorting it’s lifespan.
Ripped, Torn, or Frayed Belting
The Issue Belts are very common component of many conveyor systems, so when it starts to show signs of wear like rips, tears, or frays, it can quickly escalate into a serious problem. Damaged belting can lead to material spillage, reduced efficiency, and even complete system failure if not addressed promptly. Regular inspection is essential to catch these issues early. Small tears can often be stitched or vulcanized before they worsen, but severely damaged belts typically require replacement to avoid costly downtime and potential damage to other parts of the conveyor. Proper tracking is always required whenever a belt is modified so that that belt can move in the direction it’s supposed to without snagging or grinding against any guards or surfaces.
Example In an eCommerce distribution center, a conveyor belt used to transport packaged goods from one area to another began to show signs of fraying near the edges. This damage was caused by the belt’s repeated contact with sharp edges on the conveyor frame because of uneven tracking. As the fraying worsened, the belt eventually tore completely during peak operating hours, leading to significant downtime while the belt was replaced. The company not only lost production time but also incurred high costs in expedited repairs and lost product.
Loose or Worn Chains, Bearings, Gears, and Other Lubricated Parts
The Issue Chains, bearings, gears, and other moving parts are critical to the smooth operation of a conveyor system. Over time, these components can become loose or wear down, leading to inefficiencies, excessive noise, and even breakdowns. Lubrication is key to preventing wear, but if parts are already worn or loose, lubrication alone won’t solve the problem. Regular maintenance, including tightening, replacing worn parts, and ensuring the part IS receiving the right amount of lubrication, is essential to keep the system running smoothly.
Example At an automotive parts distribution facility, the conveyor system responsible for moving brake assemblies between palletizing operations started to make excessive noise and operate at reduced efficiency. Upon inspection, it was discovered that it’s chain was loose, and several bearings were worn due to inadequate lubrication over time. These worn parts caused the conveyor to operate with increased friction, which not only slowed down the production process but also led to a higher energy consumption rate. The company had to shut down the line for several hours to replace the worn components and properly lubricate the system.
Sections or Transfers with Constant Jams
The Issue Sections or transfer points in a conveyor system are prone to jamming, especially in systems that handle irregularly shaped or sized items. Jams can occur due to misalignment, improper spacing, or debris buildup, and they can cause significant disruptions to the flow of materials. Frequent jamming not only slows down operations but can also lead to increased wear on the conveyor and potential damage to products. Ensuring proper alignment, regular cleaning, and appropriate spacing can help minimize these occurrences.
Example A third-party logistics company faced frequent jamming at a section where smaller packages were transferred from one conveyor belt to another. The problem stemmed from irregular spacing between the transfer points and debris that had accumulated on the belts. These jams caused significant delays during peak shipping times, requiring workers to manually clear the jams and restart the system multiple times a day. The recurring problem highlighted the need for better conveyor alignment and regular cleaning procedures.
Bent Supports, Guards, and Railings
The Issue Supports, guards, and railings are crucial for maintaining the stability and safety of a conveyor system. However, these components can become bent or damaged due to collisions, improper handling, or the weight of heavy loads. Bent supports can lead to misalignment, while damaged guards and railings compromise safety. Regular inspections and prompt repairs or replacements are necessary to prevent accidents and maintain the structural integrity of the conveyor system.
Example In a warehouse handling totes of small product, a forklift accidentally collided with one of the conveyor supports, bending the support frame and several guards. The bent support caused the conveyor to tilt slightly, leading to misalignment of the belt and an increased risk of spillage. The damaged guards no longer provided adequate protection, creating a safety hazard for nearby workers. The compromised structure eventually led to a shutdown until the damaged parts could be repaired, resulting in unplanned downtime and additional repair costs.
Malfunctioning, Dislodged, or Faulty Photoeyes, VFDs and Sensors
The Issue Photoeyes, VFDs, and sensors are vital for the automated control and monitoring of conveyor systems. If these components malfunction, become dislodged, or are faulty, it can lead to operational inefficiencies, such as incorrect sorting, missed detections, and constant recircs. Regular calibration, cleaning, and testing of sensors are essential to ensure they function correctly and reliably. Replacing faulty sensors promptly can prevent minor issues from escalating into major disruptions. It’s imperative that any sensors are properly attached to their respective brackets per manufacturer or integrator specifications so that it captures the correct scan points.
Example A retail distribution center utilized photoeyes to detect the presence of packages on the conveyor belts to trigger a downstream sorter. After a period of heavy use, one of the photoeyes became dislodged and stopped functioning correctly. As a result, packages were not being sorted into the correct lanes, leading to a bottleneck in the system and delayed shipments. The faulty sensor went unnoticed for several hours, causing a backlog of unsorted packages. The issue was only resolved after maintenance technicians realigned and recalibrated the photoeye, restoring proper operation.
Unsafe or Dangerous Components
The Issue Safety should always be a top priority in any material handling operation. Components that are unsafe or pose a danger to operators, such as exposed moving parts, sharp edges, or faulty emergency stop mechanisms, need to be addressed immediately. Exposed electrical connections and questionable band-aid fixes also pose as a hazard. Regular safety audits and maintaining compliance with industry safety standards are vital to preventing accidents and ensuring a safe working environment. Unsafe components should be repaired or replaced promptly to protect workers and maintain a safe operational space.
Example In a high-speed crossdock operation, one worker suffered a severe injury when their clothing got caught in a transfer section of the conveyor. The employee was hurt because an e-stop button near him was out-of-commission, causing prolonged contact with the equipment. The incident prompted an immediate safety audit, which revealed multiple unsafe components throughout the facility. The facility had to make significant investments in safety upgrades, including the installation of new guards, profiled transfers and the replacement of outdated emergency stop systems, to prevent further accidents. On top of those replacements and lost time, the company had to settle a negligence lawsuit with the injured employee.
What is the condition of your conveyor system?
Century’s core recommendation when it comes to if you should do that repair or stave it off – DOWNTIME IS NOT AN OPTION.
Forgoing repairs or running damaged machinery inevitably leads to a conveyor unit failure and a complete halt on daily ops. That equals lost profits, lost time, inventory issues, and unhappy clients – a much harder pill to swallow rather than fixing the equipment in the first place.
Conveyor service shouldn’t be seen as a necessary evil, but as a rejuvenation of the abilities of your equipment. Performance is a key indicator of efficiency directly relating to profits and that starts at the foundation with the mechanical care of all systems.
In early 2021, Century Conveyor and Lafayette Engineering was approached by an upcoming industry leader with the request of providing a new system for meet their expanding east coast growth.
The goal was to enable the facility to be capable of processing up to 260K cartons per day, including polybags. Century and LEI designed and fulfilled this request. We partnered with Eurosort for Polybags and Hytrol Conveyor for Cartons.
Together with our partners, we implemented and created a seamless flow of products from receiving, capturing weights, dimensions, and barcodes, to outbound destinations. For seamless sortation, our in-house designed LMS Magnetic Divert Switch was implemented in the system – allowing faster response speeds on the Outbound Sorters.
Our ConveyorWorks software team worked with the customer’s WMS to provide a custom solution supporting their on-demand technology requirements to track each package and ensuring that each Carton and Polybag successfully reaching the correct outbound destination, ensuring an on-time delivery to their customers.
In an amazing feat, this facility opened in time for peak season and boasted an output of 266K cartons per day within the first month of becoming fully operational. Since then, this facility has continued to achieve record production numbers, surpassing the original goals and expectations. Century Conveyor and Lafayette Engineering are honored to cultivate growth with this customer and assist with them additional facilities across the U.S.
Goals
Enable both carton and polybag handling and sortation
Integrate high-throughput processing exceeding 260k cartons per day
Interface conveyor system with WMS for expanded tracking and data collection
System Specifications
Engineering and Integration: Century Conveyor Systems and Lafayette Engineering
Conveyor Equipment: Hytrol, FMH, Eurosort, Stewart Glapat
Software and Controls: Lafayette Engineering and Century Conveyor Systems
In a December 2023 issue of DC Velocity, leading executives from Old Dominion, C.H. Robinson, and others indicated that a multitude of factors have contributed to decreases across the board for the entirety of the logistics industry. While not overly shocking, since the pandemic propelled supply chain services and operators to unforeseen heights, the adjustment isn’t as simple as the market returning to nominal levels.
While 2024 isn’t expected to be a slump – a few factors currently in play have led analysts and operators to believe it won’t be as profitable as previous years.
Negative factors influencing the supply chain
Geopolitical issues straining overseas supply chains and the acquisition of materials. The most notable being tariffs and restrictions on Chinese imports and secondly – the conflicts in Europe and the Middle East
Excess inventory due to low-consumer demand
Decreased capacity and storage space due to that low demand
Inflation increasing costs across the board, while also influencing consumer and partner behavior to turn to a more economical mindset
Freight rates have bottomed significantly due to an excess of available truckloads and carriers that surfaced during the pandemic, along with the aforementioned low-demand for stock.
Excessive consumer demand during the pandemic have left warehouses, DCs, and intermodal ocean shippers with surplus volume, leading to a significant reduction in shipping and import operations.
Positive factors influencing the supply chain
Government focus on insulating supply chains, especially rail – to avoid repeats of the strains encountered in years prior.
Federal debt increases to spending to avoid a full-blown recession have held steady, along with strong consumer purchasing despite economic headwinds have stalled a full-blown recession. While not out of the woods, the outlook is better than it was a year prior.
Adjustment of warehouse and distribution center construction and increased vacancy has opened up the real estate market for operators looking to expand into new spaces.
With the decrease in demand (especially in trucking), layoffs from key players in the industry are inevitable. In turn, this will open up a much larger candidate pool for operators that are still experiencing labor issues.
Many operators are shifting material providers from overseas to manufacturers closer to home. For example, Mexico has usurped China in import profits. As of July 2023, Mexico made up 15% of US imports, while China made up 14.6% – indicating a significant portion of supply chains are shifting their suppliers away from distant countries.
Material handling automation integrators typically follow the effects of the supply chain by a year. Larger corporations have already or are currently implementing automation, opening availability for smaller companies looking to implement a system.
Recession scares
Despite predictions of an impending recession by economists, the resilience of the supply chain industry has defied these forecasts, primarily due to the sustained momentum in consumer spending. This unexpected endurance in consumer activity has, to a considerable extent, delayed what many experts once deemed an inevitable economic downturn.
While the supply chain industry has demonstrated robustness in navigating challenging economic landscapes, it would be prudent for smaller operators within this dynamic ecosystem to adopt a proactive approach. Investing in preventative maintenance for their conveyor equipment emerges as a strategic imperative. This forward-looking strategy not only ensures the continued operational efficiency of critical material handling systems but also serves as a safeguard against potentially exorbitant expenditures in the future when financial resources may be constrained. By prioritizing preventative maintenance, these operators are not merely reacting to the current economic climate; rather, they are strategically fortifying their infrastructure to weather potential storms and position themselves for sustained success in a fluctuating economic landscape.
The use of autonomous mobile robots (AMRs) and automated guided vehicles (AGVs) shot up to 20% in 2023, from 7% last year, while use of robotic arms/work cells reached 23%, up from 10%.
In terms of other systems in use, deployment of conveyors reached 41% this year, up from 31%; while use of vertical lift modules grew from 25% last year to 34% this year. Use of shuttles reached 13%, up from 4%.
While the notion that automation continues to be implemented is unsurprising, the rate at which is rapid. Supply chain technology continues to advance, ushering in countless new systems and equipment all while removing cost-prohibitive and accessibility barriers. Explosive growth across all MHE systems brings credence to the effectiveness of automation, with the variable being how it is implemented rather than the performance of the equipment itself.
Warehousing employment
Unemployment rates in transportation and warehousing increased from 3.3% in October 2022 to 4.5% in October of this year, reported by the Bureau of Labor Statistics. This indicates that finding labor for distribution centers and warehouses is still an ongoing issue. No doubt the hassle of finding associates correlates to the ongoing deployment of automation to eliminate the need for manual laborers.
As mentioned before, many companies are experiencing the end of drastic growth spurred by the pandemic – leading to large layoffs at companies that hired extensively to account for the growth in past years. In turn, this should open up the candidate pool for employers still struggling to fill warehouse associate roles.
Alternatively, gradually replacing manual labor with automation has traditionally been the most optimal way of adapting to demand fluctutations. Implementing a new system from scratch isn’t always feasible, but a proper retrofit or taking automation one step at a time can make reaching those KPIs just a bit easier while keeping costs down.
Lean and mean
Many warehouse and distribution center operators took the lessons learned from the supply chain disruptions to heart, opting to implement leaner strategies and eliminate situations in which waste or inefficiency exists. The burning issue in warehousing currently is capacity and inventory levels. Dwindling demand has left some warehouses brimming with slow-moving or unsold stock, leading many to cancel orders and shed excess weight.
“The broad measure of inventories to sales ratio across U.S. retailers has stood at 1.30 from May 2023 through October, suggesting merchants have achieved some stability after the roller-coaster pandemic years.” (WSJ)
This flip signifies that shippers are not hoarding product to capitalize on sales, but stabilizing levels so inventory doesn’t become stagnant. As reported by The Logistics Manager’s Index, U.S. operators drove levels down 13 points from a year ago.
Warehousing Capacity December 2023 – The Logistics Managers’ Index
Naturally, capacity is up from 2022 Q4 as well, 10.4 points – a significant but not shocking decrease, even adjusting for the peak holiday season.
Warehouse and DC real estate
The warehouse real estate market has cooled down significantly after the rush the pandemic created, but leasing, rents, and construction of new facilities continue at a steady pace. Current vacancy in New Jersey hovers around 3.8%, a rise from last year but still overall low. Many operators are taking a “wait-and-see” approach before investing in properties for 2024.
Warehousing Price December 2023 – The Logistics Managers’ Index
Prices have dropped dramatically from their peak nearly within two years at an index number of 90.5 in March of 2022 to 65.5 in December of 2023.
While mileage may vary depending on the location and specifics of the facility, prices are overall lower. This makes acquiring space more economically accessible for smaller operators looking to expand but have not yet pulled the trigger. Larger corporations like Amazon, Walmart, and Home Depot have mostly halted snapping up new warehouse space, freeing up commercial real estate inventory and increasing vacancy rates.
Summary
The name of the game for distribution centers and warehouses in 2024 is equalization. The explosion of pandemic-era demand is over, and valuable lessons about the importance of the integrity of the supply chain have no doubt influenced change across the industry.
Unpredictable consumer behavior, economic uncertainty, material shortages, geopolitical conflicts, and capacity issues – to name a few – are all factors that have impacted the industry in one way or another. Operators of warehouses and distribution centers would be wise to recognize the prevailing headwinds their organizations encountered and use 2024 to bolster themselves against those barriers – and any others in the future.
Whether that’s pairing down inventory to just-in-time levels, automating material handling procedures, expanding into new commercial space, or completely overhauling logistics processes – 2024 is the year to do it.
Equalize, adjust, and point your DC or warehouse in the right direction for success.
