Walmart, the world's largest retail chain, is about to invest up to $200 million in autonomous forklifts. The move is part of a broader strategy to automate more warehouse operations.

According to sources familiar with the plan, Walmart $WMT-0.4% is focused on buying hundreds of these trucks from Fox Robotics and has already invested $25 million in the Austin-based startup.

Why autonomous forklifts?

Walmart intends to use autonomous forklifts to transport pallets of merchandise in its distribution centers that supply its stores. This initiative is expected to be phased in over several years, and its success depends on Walmart's satisfaction with the performance of the so-called "FoxBots."

According to Walmart, automation is a crucial step to increase profitability and competitiveness, especially against giants such as Amazon. Analysts estimate that investments in automation and artificial intelligence could bring Walmart as much as $20 billion in earnings before interest and taxes by fiscal 2029.

Walmart

WMT

$76.64 -$0.32 -0.42%

Capital Structure

Market Cap

616.1B

Enterpr. Val.

667.9B

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39.9

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0.9

Open $76.90

Day range $76.30 - $77.32

52 week range $49.85 - $77.81

Automation

Walmart spokeswoman Camille Dunn said the rollout of the technology is an "evolutionary process" from proof of concept to full deployment. "We are evaluating performance at each stage to see if the technology meets our requirements to better serve our customers," Dunn said.

Fox Robotics said the contracts with customers are confidential, suggesting that similar investments and collaborations can be expected in the future. Walmart has previously announced collaborations with other robotics firms, such as Symbotic, to automate 42 distribution centers.

Challenges and benefits of automation

Autonomous forklifts are designed to reduce labor costs by up to 40%, while one operator can control up to six trucks at a time. This reduces the need for physically demanding work while increasing efficiency.

"Automation means new technical roles for our employees and additional job opportunities," said David Guggina, executive vice president of supply chain operations for Walmart in the US. Although robotics has reduced the physical demands of the job, Guggina stressed that people will always be part of Walmart's warehouse operations.

Finding workers for warehouse positions can be challenging, which is why automation is key to keeping employee turnover low. Less physically demanding work and new technical roles contribute to the stability and productivity of the work team.

The investment in autonomous forklifts is a clear signal that Walmart intends to continue on the path to automate and optimize its operations, preparing for a future where technology will play a key role.

Source: Yahoo Finance, CNN.

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