Kenco Triples Its Innovation Lab as Its Own Survey Shows Why: 51% of Shippers Cite Cost as the Barrier

Kenco held a ribbon-cutting on Sept. 10 for a 30,000-square-foot Innovation Lab in Chattanooga, Tennessee, roughly tripling the footprint of the 10,000-square-foot testing facility the third-party logistics provider had operated since 2015, according to the company's own announcement distributed via Business Wire. The new space, at 4885 Claude Ramsey Parkway, is built to let equipment OEMs and Kenco customers test larger and more complex automation systems — robotics, conveyance, sortation — under conditions closer to a real warehouse floor than a vendor showroom allows.

"The Innovation Lab has long stood as the convergence point for leading technologies and real-world applications," said Ainsley Williams, Kenco's vice president of automation and innovation, in the release. Denis Reilly, Kenco's CEO, framed the expansion around labor rather than headcount reduction: "Automation is not about replacing people. It's about enabling them." Kenco operates roughly 140 logistics locations across North America with more than 7,500 employees as of last year, including about 800 at its Chattanooga headquarters.

The timing lines up with data Kenco itself published seven months earlier. The company's 2026 Innovation Report, based on a survey of more than 150 North American supply chain executives, found cost constraints cited by 51% of respondents as the top barrier to implementing new supply chain technology, ahead of workforce challenges at 45% and technology-integration issues at 29%. On the demand side, 83% of respondents said they had a dedicated innovation budget for 2026, but only 35% planned to increase it — down from 39% the year before — and the report's authors described an "innovation paradox," in which inflation is simultaneously the top driver of the need to automate (cited by 45%) and, through cost pressure, a constraint on paying for it.

One statistic from that survey points directly at why a 3PL would build a bigger testing lab rather than leave equipment evaluation to individual shippers: 37% of surveyed executives said they now depend on third-party logistics partners for strategy, implementation, funding or ongoing operations support around new technology — not just execution. A vendor-neutral facility where a shipper can see a system run before committing capital is a direct answer to that dependence, and it lets Kenco make the case to prospective automation customers without either side bearing the cost of a failed in-house pilot.

What this means for forwarders and brokers

Warehouse automation adoption decisions increasingly run through 3PLs rather than around them, and this expansion is a concrete data point on how that shift is playing out operationally.

Shippers get a lower-risk on-ramp to automation. With 51% of Kenco's own survey respondents citing cost as the top barrier to adoption, a facility where OEMs demonstrate systems at scale before a shipper signs a capital commitment shifts real risk off the shipper's balance sheet and onto the 3PL's test floor. That matters most for mid-market shippers who can't absorb a failed automation pilot the way a large retailer might.

3PLs are becoming automation gatekeepers, not just capacity providers. The 37% figure on shippers leaning on 3PL partners for technology strategy and funding — not just execution — suggests procurement teams evaluating a 3PL relationship should now be asking about automation testing and vendor-vetting capability as a core service line, alongside the traditional questions about network coverage and rates.

Budget growth is slowing even as pressure to automate rises. The drop in respondents planning budget increases, from 39% to 35% year over year, even as inflation remains the top cited driver of the need for automation, points to a market where demand for automation outpaces the capital available to fund it. That gap is exactly the space a shared, vendor-neutral testing facility is built to fill — and a reason to expect more 3PLs to follow with similar investments rather than leaving individual shippers to underwrite pilots alone.