Taiwan’s First Unmanned Guided Vehicle Will Boost Logistics Competitiveness

The first made-in-Taiwan (MIT) “automated guided vehicle” (AGV) has been developed by HCT Logistics in cooperation with the Industrial Technology Research Institute,ITRI(Taiwan Government)and Shihlin Electric. In its customized operating system, the new vehicle is designed to meet THL’s e-commerce platform needs.

The world has entered the post-epidemic era, prompting rapid growth in the housing market and related demand. This surge means higher distribution volumes and a greater diversity of sales. However, optimizing logistics is a central part of turning this from a challenge into an opportunity for e-commerce platforms. HCT Logistics introduced the first Taiwan-made AGV system for the use of automated facility in the warehouse of its subsidiary, HHG Logistics.

Another subsidiary, HHG Logistics, operates one of Taiwan’s top-three e-commerce platforms. HHG Logistics’ Director Derek Wang noted that in addition to cooperating with major e-commerce channels operated by firms such as Yahoo, Shopee, and PChome, they also engage with more specialized platforms as they appear, such as foodpanda and Uber Eats. THL prioritizes new relationships with such entrants. Front-end entry into multiple platforms requires the direct support of THL’s back-end logistics team. The AGV warehousing system of HCT Logistics can be customized, adding greater flexibility, which is one of the keys to increasing its competitive advantage.

The e-commerce market is changing rapidly. The AGV automatic warehousing system developed by HCT Logistics can be customized to meet changing needs. ~Derek Wang, HHG Logistics’ Director of Logistics.

The AGV warehousing system has undergone two years of R&D by the Taiwan team. HCT Logistics and ITRI(Taiwan Government) were responsible for the software programming, while Shihlin Electric handled the hardware. HHG Logistics, a joint venture between THL and HCT Logistics, is the system operator.The system can immediately respond to items such as product specifications and shipping methods.

The new AGV can collect and sort items that formerly had to be collected by large numbers of staff. After receiving system instructions, the AGV travels its designated route and delivers the items to a reception area called work station. Although the process may appear to be simple, the AGV requires the support of a strong IT team.

Manager Claudia Chuang HCT Logistics’ business group is focused on back-office R&D efforts. She said that product size, standardization, barcodes, and volume accuracy are all basic elements for implementing an AGV automated warehousing system. While the IT team obviously needs to input initial capabilities, they must also create a system that can be adjusted in new conditions, and to design these preparations in a way that requires minimal human intervention.

Claire Lee, Senior Manager of HCT Logistics’ Distribution Group, pointed out that "The MIT angle is our biggest advantage." She explained that most of Taiwan’s e-commerce platforms use imported automated warehousing systems. "It's like buying an iPhone. It doesn’t have the capabilities of an open-source product." When such a system first hits the road, significant time and manpower are needed for adjustments to the local system. However, the system developed by HCT Logistics and ITRI was specifically designed to meet HCT Logistics’ needs. It’s designed to easily adapt to changes in products and markets.

One example is HHG Logistics’flagship brand pavilions on its e-commerce platforms, such as for Shopee. Derek noted that HHG Logistics has 18 such pavilions on Shopee. All of the products for a single brand can be located in a manner that allows for collectionin one run by the AGV warehousing system. Multiple orders can be completed at one time. In the future, shipments intervals are likely to be shortened significantly, to perhaps once every three hours. This will help reduce e-commerce congestion during the peak sales seasons.

Claire frankly said that the cost of AGV hardware facilities is not high, so in this sense barriers to entry are not that high and most Taiwan logistics firms are introducing automated systems of some type. However, the key advantage for the system developed by HCT Logistics is the high level of customization that is possible. This provides much higher flexibility than is found with most other systems in Taiwan.

In addition to improving the efficiency and accuracy of warehouse operations and reducing labor costs, the new system was also designed to address issues created by Taiwan’s declining birth rate. For example, labor conditions tightened considerably during the during Double 11 day in 2021. "The average hourly wage for outsourced labor increased by 45%." Claire pointed out people these days are having fewer children. As time goes by, the supply of manpower will gradually decrease. At the same time, warehouse and logistics operations tend to require much physical effort, making it difficult to find sufficient staff. One effect has been significantly higher costs during peak seasons.

Thus, the AGV automated warehousing system is part of a clear trend in the logistics industry, and these early preparations are necessary to meet the changing conditions of the future. HCT Logistics’ system provides great flexibility. It not only addresses a looming market with fewer workers, but also paves the way for greater efficiency and a greater ability to adjust to changing market conditions in both low and peak seasons.