A worker assembles boxes beside an industrial palletizer from Formic at MattPak in Franklin Park, Illinois. Robots-for-rent is one way some small US factories gain access to automation, reducing turnover and ensuring workers aren’t injured. — Taylor Glascock/The New York Times
DETROIT: Employees at S&F Foods dreaded lifting heavy cardboard boxes from a conveyor belt and placing them onto pallets for shipment all day. So Mike Calleja, the plant manager for the company, which makes frozen food for school cafeterias, hired a robot.
Buying a robot could cost as much as US$500,000 (RM2.11mil), and Calleja wasn’t even confident that one would work. Instead, he rented a robot from Formic, a Woodridge, Illinois, firm that takes care of installation, training, programming and repairs. It costs about US$23 (RM97) an hour, roughly the same as a human.
“We have very low turnover because we try to make jobs easier,” Calleja said of the company, which is outside Detroit. “We are a small facility, but we produce about 65,000 pounds of food a day.” Stacking it was “a backbreaking job”, he said.
In an era when manufacturers consistently list attracting and retaining workers as a top challenge, companies are automating some of the worst jobs in their plants as a worker retention strategy.
The robot rental model has the potential to transform the American industrial base by making automation accessible to small and medium-size businesses that have traditionally been slow to adopt new technology.
Of the roughly 244,000 manufacturers in the United States, about 93% have fewer than 100 workers and 75% have fewer than 20, according to the Manufacturing Extension Partnership. Those small and medium-size companies often lack the capital or in-house knowledge to integrate new equipment into their assembly lines.
“That’s where the opportunity is,” said Saman Farid, CEO of Formic, which rents robots to about 150 different factories across the country.
Formic’s customers run the gamut from makers of dog food to manufacturers of automotive parts. Many are small, family-owned businesses that have to turn down orders because of a lack of staffing. Automating the most arduous and repetitive jobs allows them to redirect employees to more productive tasks, keeping them satisfied and boosting sales.
Some factories report having turnover rates of 100% for certain jobs, Farid said, leaving managers to constantly hire, train and drug-test new employees. “When they adopt robots to do some of the most dull, dirty, dangerous, repetitive, backbreaking tasks, people stay, right? Because you’re not lifting heavy boxes 12 hours a day,” he said.
Robot rental companies specialise in certain commonplace tasks – stacking boxes, sorting parts, welding or feeding material into machines – often the same jobs that cause bending, lifting and twisting injuries in humans.
Formic was one of at least three robot rental companies started in 2020 when the COVID-19 pandemic created acute labor shortages. AAA20 Group, a Las Vegas company, leases robots called palletisers that stack boxes onto pallets and wrap them in plastic for about US$4,950 (RM20,955) a month.
RobCo, a German robot-leasing firm, was also founded in 2020. In January, RobCo acquired the assets of Rapid Robotics, a US firm that was shutting down, to get a foothold in the US market. RobCo will open an office in San Francisco next month. It is also equipping a manufacturing facility in Austin, Texas, to make robots to rent, according to Lorenzo Pautasso, general manager of RobCo’s US office.
He said the company’s clients in the United States are often motivated by a desire to decrease employee exposure to harmful toxins, or other tasks that threaten health.
“It’s not about driving down the cost of labour,” Pautasso said. “It’s about ensuring the consistency of labour, that the people that are there today will be there tomorrow.”
Matt Kunach, operations manager and co-owner of MattPak, a contract manufacturer of detergent pods for laundry machines and dishwashers in Franklin Park, Illinois, said that renting three palletisers from Formic saves a little money, but that the main reason for the switch was to cut down the risk of injury to employees.
All the workers who had been stacking boxes on pallets have been reassigned to different jobs in the plant, he said, which has opened up capacity to expand into new product lines. Some have been promoted to machine operators and line leaders, positions that carry more prestige and higher pay, he said.
Robot rentals make up a tiny but growing slice of the overall market, according to the International Federation of Robotics, a nonprofit group that publishes an annual survey of robot manufacturers around the world. About 113,000 transportation and logistics robots were sold globally in 2023, up 35% from the previous year. About 5,000 were available for rent, a 20% increase.
The robot rental model has also become trendy in Silicon Valley, where some investors find it attractive because of the recurrent revenue and the focus on building long-term, habit-forming relationships rather than on one-time sales, according to a report issued by Silicon Valley Bank last year. Companies that use the model “raise more capital and at better valuations” than those that don’t, it noted.
Sankaet Pathak, founder of the defunct fintech company Synapse Financial Technologies, has raised more than US$11mil (RM46.56mil) for his new venture, Foundation, a company that aims to build and rent a fleet of humanoid robots.
He said Foundation has robots deployed in a car factory in Georgia, where they sort parts on a conveyor belt. The stiff-fingered humanoids are still a work in progress, but they have come so far that he is charging US$33,000 (RM139,705) per shift for them. They currently work one shift, and he hopes they will eventually work around the clock. Right now, he said, factory workers see his humanoid robots as a novelty rather than a threat.
“It would be more contentious if robots start taking jobs that people actually like doing,” Pathak said.
He said reviving the American industrial base requires the widespread adoption of robots that look like people, since most factory assembly lines have been built for humans.
But Farid, who spent years in factories in China, said the whole point of a robot is that it can do things that humans cannot, and should not be limited to the human form. For instance, the robot arm in S&F factory has a vacuum suction instead of a hand that picks up boxes from the top and places them on a pallet far more efficiently than a human could.
Yet there are headwinds. Purchasing robots outright has become more affordable since the most recent policy and budget bill passed this summer in Washington. It includes a provision that allows businesses to deduct the full cost of new equipment the year it is placed in service, according to Kevin Harris, a partner at EisnerAmper, a firm that advises companies on accounting and tax law.
But some companies still can’t afford robots, or prefer to keep the cost as an operating expense, according to Andra Keay, managing director of Silicon Valley Robotics, an industry association that supports the commercialisation of robotics technology. Others simply aren’t ready to commit to a big purchase at a time when technology is evolving so rapidly or they want to test solutions before they invest.
“It is a great idea as an introduction,” Keay said. “Robots are needed to deal with labor shortages and that includes making jobs more enjoyable and pleasant.” – ©2025 The New York Times Company
This article originally appeared in The New York Times.
