Pros and Cons of Automated Guided Vehicles

October 2022

Automated guided vehicles (AGVs), also known as self-guided or autonomous guided vehicles, are load carriers or material handling devices that move autonomously throughout a warehouse, distribution center, or manufacturing plant without an operator or driver on board.

Why are AGVs widely used?

AGVs are widely used because of their numerous advantages, including lower labor costs, less product damage, higher production, and scale to support automation operations. These significant benefits motivate logistics and transportation companies to implement AGVs to increase the effectiveness of their operations. As an illustration, AUDI AG announced in May 2021 that they employ AGVs at their manufacturing facilities to assist them in planning the production process by letting them know which component is out of stock and needs to be available. Additionally, it aids in transporting supplies in trolleys, which helps them retain safety

Numerous end-use industries use automated guided vehicles, including logistics, automotive, healthcare, manufacturing, and food & beverage. The two main elements driving the need for industrial equipment are decreased labor costs and increased production. AGV demand is anticipated to increase as industries become more automated. The constant demand for specialized material handling and transport solutions for improved efficiency results from growing industrialization.

For instance, in November 2021, JBT, a provider of technological solutions for the food and beverage sector, bought Urtasun Tecnologia Alimentaria. This company offered services for the processing of fruits and vegetables. By supplying automated solutions to the food industry and enabling Urtasun Tecnologia Alimentaria to diversify its product offerings, this acquisition seeks to scale JBT's operations globally.

AGVs & E-commerce

Robots are replacing workers in numerous areas, including manufacturing and producing food and beverages, retail, and others. Employment opportunities are benefited from automation in the e-commerce industry more than in other sectors. This is partly because third-party warehouses and e-commerce fulfillment centers frequently employ collaborative robots like AGVs. E-commerce businesses are pushed to match this demand as single-day delivery orders grow in popularity in established and developing economies, considerably enhancing efficiency.

Adoption of AGV: Difficult for SMEs

Depending on the incorporated battery type and navigational technology, AGV solutions have a significant upfront cost. Small and medium-sized firms (SMEs) find it challenging to embrace automation technologies for material handling due to their high initial costs; nevertheless, most large-scale industries can. These SMEs' ability to grow and generate income is constrained by issues like escalating labor costs, worries about product quality, and a lack of qualified staff.

Β In 2021, the market was dominated by the logistics and warehousing segment, which contributed more than 40% of total revenue. Over the projected period, the assembly segment will experience the fastest CAGR of 13.1%. Transport, cold storage, wholesale & distribution, and cross-docking are additional subsectors of the logistics & warehousing industry. Modern retrieval and automated storage systems, as well as other material handling equipment, are being aggressively adopted by businesses as they renovate their current facilities and construct new ones to reduce labor costs and increase productivity and efficiency.


Asia-Pacific will hold the top market position by developing at a CAGR of 32.6% over the anticipated period. The key drivers of the growth of the Asia-Pacific regional market are rising urbanization, e-commerce sales, and technology suppliers' solid footing in the market. Big firms invest in research and development to offer innovative solutions and maintain competitiveness. One of the biggest e-commerce centers in the world is now located in Asia-Pacific. Because of the expanding middle class in China, India, and Indonesia, as well as the growing acceptance of mobile technology, the region saw a substantial rise in retail e-commerce. 40% of all retail e-commerce sales globally come from China alone. Additionally, there is a good chance that the local auto and electronics industries will use more autonomous guided vehicles.

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