Dive Brief:
- AutoStore, a fulfillment technology provider, has agreed to a framework to supply products and services globally to Amazon, per a press release last week.
- The agreement "defines the terms for further procurement of AutoStore systems by Amazon" but doesn't include any purchasing commitments yet, according to the release.
- AutoStore offers an automated storage and retrieval system for e-commerce companies and third-party logistics providers to enable high-throughput fulfillment, per its website. Amazon and AutoStore did not respond to requests for comment seeking further information.
Dive Insight:
The pact with AutoStore comes as Amazon deploys automation and robotics within its sprawling fulfillment network.
In recent years, the e-commerce company has developed in-house solutions — such as robotic arms — to sort, move and handle the flow of packages at its facilities.With the AutoStore deal, Amazon is adding an external party's tech to benefit its network.
In an earnings call last week, AutoStore CEO Mats Hovland Vikse declined to disclose specifics on the Amazon arrangement but said AutoStore has similar supply agreements with other customers.
"We see more and more customers actually taking good ownership of their automation, figuring out how to best utilize it simply because it's becoming so strategically important," Hovland Vikse said. "And that's a trend that we see across a wide variety of customers out there."
Meeting Amazon's volume needs will be a challenge for AutoStore, but the technology company has taken steps to ensure it can serve all its customers, Brittain Ladd, a supply chain consultant who has been following the deal's progression, said on LinkedIn.
"This is a wake up call for Target, Walmart, and certainly Kroger," Ladd said of the Amazon-AutoStore deal. "Each of these retailers should have already installed AutoStore’s grid system inside select stores.”
