The last-mile delivery is expensive and difficult. It’s also high stakes, a failed delivery attempt is enough to damage the customer’s perception of the entire shopping journey.
In an attempt to ease these pain points, technology companies, retailers and logistics businesses have been piloting autonomous delivery robots to transport packages to shoppers’ doors.
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In February FedEx announced it will work with retailers such as Lowe’s, Pizza Hut, Target, Walgreens and Walmart to help fulfill customer’s same day deliveries. The logistics giant joins the likes of Amazon, Starship Technologies and Australia Post which have all experimented with the delivery vehicles.
Fuelled by growing ecommerce sales, the robots promise faster, cheaper and more sustainable deliveries but so far deployments have not progressed passed pilot phase. However the market could shift quickly within five to 10 years, according to analysts.
A supply chain briefing published by Gartner in January argues, while “many hurdles remain urban delivery robots are increasingly viewed as a potential option for last-mile deliveries over the next ve to 10 years.”
Gartner 2019 CIO Survey found just four per cent of the retail respondents say they will have implemented urban delivery robots as a customer fulfillment method by the end of 2019, up from just one per cent in 2018.
“Although use today is nascent, some organisations predict that 80 per cent of last-mile deliveries will be autonomous by 2025,” the authors write.
The pace of a widespread roll out its likely to be dictated by the road rules, rather than technical capability of the bots.
Dr Sue Keay is the Cyber Physical Systems Research Director at CSIRO’s Data61. Her research team includes specialists in robotics and autonomous systems as well as the sensing technology, imaging and computer vision which can be used in isolation or applied to robots to help them navigate to their destination.
It’s not so much the development of the electric vehicles that will take time, but figuring out how to deploy at a large scale them, Keay told Which-50.
“Some of the difficulties deploying the technology are not so much in the technical details, but more in the legal detail,” she said.
She explained, “It’s not legal for us to have autonomous vehicles on the road. It’s difficult for us to have these essentially autonomous vehicles crossing roads because they could be a safety hazard.”
Gartner’s Supply Chain report notes legislators in the US have begun to pass laws allowing for autonomous robots to make their deliveries.
“Legislation has passed to make self-driving robots legal on the sidewalks in the District of Columbia and Virginia, and similar laws are in the works in Florida and Idaho. The city of Dallas has approved a pilot project for sidewalk delivery robots. Other states also have expressed interest. However, some cities, including San Francisco, have banned the testing of sidewalk robots,” the authors write.
According to Bain moving goods from a transportation hub to their final destination accounts for an estimated 50 per cent of a retailer’s total fulfillment costs.
A report from KPMG predicts self-driving delivery vehicles could slash the cost of delivery to between 4 and 7 cents per mile, as the costs of the vehicle and maintenance decreases over time.
Their calculation is based on an upfront cost of $1,500 to $2,500, making 15,000 delivery miles a year over a five-year life span. It also assumes there is no cost for parking or tolls.
“Without drivers to pay, to carry, or to protect, autonomous vehicles will be much less expensive to produce than conventional delivery vehicles,” the authors write.
“The cost of autonomous delivery will of course reduce gradually, as the expense of developing the vehicles is absorbed. But with each successive reduction, consumers will adopt online shopping and delivery in greater number and with greater enthusiasm.”
Keay noted the cost of robotics will come down as a result of the large sums currently being invested in self-driving cars, which will benefit from using use the same components.
“A lot of the sensors you need to use for something like a delivery robot, you would also use in a self-driving car. The cost of those sensors are coming down all the time,” she said.
Esky on wheels
It was dubbed an esky on wheels, but Australia Post’s autonomous delivery robot could solve one of the company’s biggest customer experience dilemmas – missed deliveries. Theoretically, the bot could wait at your door until you got home to pick up the package, eliminating the trip to the Post Office on Saturday morning to pick up a parcel.
Australia Post conducted footpath robot trial in New Farm, Brisbane, in 2017. In its 2018 annual report, the national carrier said its “mobile parcel locker” autonomously drove 140km and made 100 successful deliveries without a single “technical or safety incident”.
Australia Post spokesperson told Which-50, “In late 2017 Australia Post trialled a mobile parcel locker over a four week period to a small number of homes in New Farm, Queensland. The trial helped us test the suitability and practicality of autonomous technology in a real space, and provided an opportunity to invite community feedback.”
Gartner recommends supply chain leaders monitor the progress of urban delivery pilots, including any legislation in their regions that allows or prohibits the use of mobile robots on city streets or footpaths, and assemble a team to determine cost, ROI and consumer acceptance of delivery robots.
Kaey notes any robotics deployment should be accompanied by a change in workflow processes, rather than just trying to substitute a human with a machine.
“Our observation is that a robot integration never works very well if robots are just substituted into environments where there has been no mapping of the actual business process and some analysis of where the robot is actually going to be giving you an advantage,” she said.