Editors' pick: Originally published Feb. 11.
Amazon (AMZN) has recently been gaining attention for its intentions when it comes to delivery. The company has publicly shared plans for drone delivery, has filed patents for trucks that 3D print orders as they approach a customer's home and has registered to be an official ocean freight forwarder from China to the U.S. Plus there are reports that the company is in talks to lease its own jets for faster delivery.
One of the more underexamined aspects of Amazon's shipping ambitions, though, is its secretive warehouse robots, which it obtained when it acquired Kiva Robotics in 2012.
This technology is invaluable to Amazon's efficiency and bottom line, and as the company prepares to stop supporting the robots used by Kiva's former customers, other competitors are stepping in to offer similar products.
When Amazon first acquired Kiva for $775 million, the goal was to automate its warehouses and make them more efficient. Amazon rebranded the robots into a division called Amazon Robotics, but it has since been pretty tight-lipped about its plans.
The most recent numbers from Amazon claim that the company has 30,000 robots in 13 fulfillment centers, up from 15,000 robots in 10 fulfillment centers at the end of 2014. The company also plans to install the technology in all of its new fulfillment centers under construction, according to Amazon spokesperson Nina Lindsey.
The robots carry a shelf full of various items to a picking center, where a human employee can then finish the sorting so that the items get sent to the appropriate customers.
"Our intent is to use [the robots] more widely -- and stay tuned," said Amazon CFO Brian Olsavsky during the third-quarter earnings call last year.
During the same call, Amazon's Director of Investor Relations Phil Hardin added a bit more color, while still remaining vague:
"It's a bit of an investment that has implications for a lot of elements to your cost structure, but we're very happy with Kiva," he said. "Pairing our associates with Kiva robots to do some of the hauling of products within the warehouse has been a great innovation for us. We think it makes the warehouse jobs better and I think it makes our warehouses more productive."
Though it's certainly not cheap to equip a warehouse with robots, the technology cuts down on the time warehouse associates wasted walking to and from shelves grabbing products. By adding Kiva robots to its warehouses, Amazon saves 21.3 cents per unit shipped, cutting that cost by 48%, according to logistics consulting firm MWPVL International.
"That's quite a bit of money when you think about the fact that Amazon is stocking across  warehouses in the U.S.," said Marc Wulfraat, the founder and president of MWPVL. UBS analyst Eric Sheridan estimates that Amazon Robotics could save Amazon about $900 million a year in personnel costs.