Driven Toward Greatness

Cyngn is a Business Reporter client.

Cyngn’s autonomous industrial vehicles are revolutionizing how logistics companies get work done.

How do you solve a $1 trillion problem? 

That’s the question that’s been plaguing the logistics industry since the start of the pandemic. As consumers shifted their buying habits, e-commerce exploded, and it hasn’t slowed down. During the 2020 holiday season, for example, online spending shot up 32% to a record-breaking $188 billion. In 2022, e-commerce sales are estimated to have hit $5.4 trillion. 

This dramatic shift has left manufacturers, third-party logistics (3PL) providers and fulfillment centers struggling to meet rising demand, as they battle supply chain, productivity and safety issues, as well as labor shortages. 3PLs are definitely feeling the pain, and the number of 3PL employers struggling to attract new workers has tripled since 2020.

Until recently, organizations have sought to solve the labor shortage problem primarily through more aggressive recruiting. 3PLs have started to offer novel—albeit expensive—incentives to attract and retain workers: a higher minimum wage, paid time off and assistance plans. Today, labor takes up 70% of a warehouse’s entire budget. 

Unfortunately, workforce shortages persist. There simply aren’t enough people available to do the things that need to be done—and this labor gap could cost the US economy more than $1 trillion by 2030. 

“It’s a big, pervasive problem,” says Lior Tal, the CEO of Cyngn, an industrial autonomous vehicle company. “We’ve talked to organizations who said they would hire 500 people right away if they could find them.” 

But how do you solve a worker shortage problem when there simply aren’t enough workers?

Autonomous industrial vehicles drive benefits

Early this year, we took a tour of Cyngn’s headquarters in Menlo Park, Calif. The facility was abuzz with a variety of industrial vehicles, all running DriveMod, Cyngn’s autonomous vehicle technology. In one part of the facility, several DriveMod-enabled Columbia Stockchasers zipped around shelves, piloting themselves to a various pick-up spots and drop stations. In another area, hardware engineers gathered around a forklift, training sensors for pallet and people detection. 

Seeing all these vehicles working on their own was a thing of magic—the fulfillment of a decades-old promise that vehicles would one day drive themselves. 

In recent years, the story of autonomous driving is one of companies struggling to keep that promise safely, particularly on public roads. The problem of open-road driving is extremely complex; driving is as much cultural as it is technical, and humans are unpredictable. Each year, leaders of fledgling robotaxi companies go before journalists to reset expectations. “The self-driving revolution is coming,” they insist, “just not quite yet.” 

The Cyngn facility, however, is a reminder that the self-driving revolution is already here, particularly across industrial use cases. For 3PLs and manufacturers, this news couldn’t have come at a better time. 

Putting autonomous vehicles to work

In October 2021, Cyngn’s stock was listed in its IPO under the ticker symbol CYN. At the time, the company was pre-revenue, and its pitch to investors was akin to that of a pharmaceutical startup developing a promising new drug: Stick with us, Cyngn promised, the upside could be huge. (Huge is the operative word here. According to its investor presentation, the company is not only going after the $119 billion logistics and manufacturing market, but also mining and other heavy industries.) 

Since its IPO, Cyngn has invested substantial resources in scaling its engineering workforce and deploying autonomous stock chasers to key locations across the US. By all accounts, the company is ahead of the timeline it outlined when it went public, notching several high-profile clients across logistics and mining. 

“Most companies understand that they must automate to remain competitive,” says Tal. “What they might not understand is how easy it is to integrate these technologies into their existing workflows.” 

Cyngn, he explained, has intentionally designed its self-driving vehicle suite to foster easy adoption. The company offers autonomous retrofits of common warehouse vehicles such as stock chasers, ensuring that operators can continue to use their existing vehicle fleets without major capital expenditures or changes to their workflows. These vehicles can be switched back into manual mode when needed. 

These deployments are structured using the robotics-as-a-service model, which allows clients to tap into the power of autonomy without having to hire a team of engineers for technical support. 

For clients, the impact of Cyngn’s autonomous vehicle deployments has been overwhelmingly positive. The implementation of autonomous vehicles offers significant benefits that are realized almost immediately: increases in productivity, safety and scalability, to name a few.

One case study, conducted at a 3PL facility in Las Vegas, found that Cyngn’s technology increased productivity by 33% and decreased labor costs by 64%. 

For a 3PL, virtually no other intervention can increase productivity by that much. The increases are so dramatic that early adopters of autonomy are carving out a clear competitive advantage. 

Beyond increases in productivity, shifting workers away from driving increases profitability. 3PLs make their money in two ways: order fulfillment and item storage. In the case of the former, the facility charges sellers a pick fee for every item that goes into a box. 

The more efficiently workers pick, the more money the facility makes. 

By deploying DriveMod-powered stock chasers, facilities have been able to shift their workers away from the money-losing effort of driving to the money-making effort of picking. It’s hard to overstate the impact that this shift can have on a company’s bottom line. 

Collaborating with robots

Today, particularly in the context of dramatic labor shortages, warehouse technologists see automation as augmenting, not replacing, the existing workforce. Autonomous vehicles can perform monotonous, repetitive driving, leaving humans with more fulfilling, thoughtful work. Robots that work in tandem with humans already have a buzzy nickname: “cobots.” 

In many ways, autonomous vehicles are the perfect cobots—and the perfect solution to the labor shortages plaguing third-party logistics companies. It’s no surprise, then, that the industry is starting to embrace this technology. Warehouse adoption of robotics is forecast to increase by 50% or more by 2027, according to surveys by industry trade groups.

While the debate continues over whether or not self-driving trucks and cars will take over the roadways, autonomous industrial vehicles are silently and swiftly transforming the fabric upon which the world’s businesses operate. From defense to dairy, autonomous industrial vehicles are improving productivity while reducing costs. 

According to Cyngn’s white paper, Autonomous Industrial Vehicles: The State of the Industry, the industrial automation market is expected to reach $306.2 billion by 2027. This rapid surge of industrial autonomy has facilitated profound changes in workflows, revenue streams and value chains, ushering global industries into an age of unprecedented flexibility, scalability and efficiency.

To learn more about Cyngn, visit cyngn.com.

Image: Courtesy of Cyngn