Autonomous Technology Startups Look to Disrupt Last-Mile Delivery

March 19, 2018 by John O'Dell

Home delivery is poised on the edge of revolution.

Last-mile delivery — as it’s referred to by logistics insiders — is one of the costliest links in the delivery chain.

That’s why a handful of determined delivery startups aim to offer fast, efficient, on-demand home delivery. The goal is to eliminate the cost of delivery drivers by replacing them with self-driving delivery vehicles — some big and some small, some wheeled and some winged.

A Trucks.com review of recent deals found that venture capitalists and other investors are pouring hundreds of millions into companies developing autonomous delivery vehicles.

Autonomous vehicles will be making 80 percent of last-mile business-to-customer deliveries by 2025, according to a 2016 report on the future of last-mile delivery by McKinsey & Co.

It’s more than just a dream.

One European startup has logged more than 60,000 miles of deliveries to customers in England, Western Europe, California and Washington, D.C.

A Silicon Valley company’s autonomous delivery van began delivering groceries for its first commercial customer this year.

An Ohio company, working with UPS, has developed a flying delivery drone that can carry a 10-pound package several miles to homes in isolated areas, sparing the delivery services the time and fuel costs of navigating treacherous backroads in big delivery vans.

So far, these efforts are being conducted under autonomous vehicle test rules, with human operators available to take control if the autonomy systems fail. But regulators are working quickly to permit regular use of autonomous vehicles.

Entrepreneurs such as Daniel Laury, chief executive of autonomous grocery delivery pioneer Udelv, expect the home delivery industry will be among the first to get the go-ahead for real-world operation. That’s in part because the light, small, low-speed vehicles being developed for the application present less of a safety challenge than do driverless cars and trucks.

For consumers, the siren call is quick and convenient home delivery, as they’ve come to expect from Amazon. Fast and free shipping are top drivers for online shopping, according to Walker Sands Communications’ “Future of Retail 2017.” 

Here’s a look at five leading autonomous vehicle developers aiming to change the way the world takes delivery of everything from pizza and beer to prescription medicines or important documents.

All are battery-electric, which limits range — although that’s not a big issue in last-mile home delivery— and all run silently and are environmentally clean. They make use of radar, on-board cameras, GPS systems and other sensors to map where they are going.

Customers must come to the vehicle — or to an outdoor drop site, in the case of the flying drone — to get their goods.

“They still haven’t figured out that last 50 feet, and that may be critical in deciding whether these are novelties or a worthwhile convenience for both retailer and consumer,” said Michael Ramsey, autonomous vehicles analyst with Gartner Inc.

Here are the players.

Udelv:

Burlingame, Calif.-based Udelv operates a low-speed, street-legal electric vehicle with 18 independently lockable cargo holds and a 700-pound carrying capacity. The company’s first customer is Draeger’s Market, an upscale grocery and deli chain serving communities on the San Francisco Peninsula.

udelv outside

Udelv’s bright orange electric van now delivers groceries, sans driver, to Silicon Valley customers of a local market chain. (Photo: Udelv)

Draeger’s customers who sign up for the service place orders, receive delivery arrival texts and unlock the compartment with their groceries using a smartphone app.

The Udelv van doesn’t have a cute name, and, so far, is the most conventional-looking of the autonomous last-mile delivery vehicles. It is built on a readily available electric work vehicle chassis and powertrain but uses a custom battery for up to 60 miles of range, enabling it to make multiple deliveries in one run.

Dispatch:

Tiny South San Francisco-based Dispatch is developing an autonomous package cart, called Carry.

Dispatch’s “Carry” delivery ‘bot can negotiate narrow paths.

Dispatch’s “Carry” delivery ‘bot can negotiate narrow paths. (Photo: Dispatch)

The smallish, four-wheeled vehicle — think oversized, hard-sided suitcase — is designed to run on sidewalks and in other pedestrian spaces but not on streets. It can carry 100 pounds, and its cargo area is divided into four independently lockable bays.

Dispatch’s initial testing was done last spring with Carry units delivering mail, packages, snacks and laundry to students at California State University at Monterey Bay and Menlo College near Palo Alto.

The company said the units use an artificial intelligence program that helps them “learn” to act safely around people. That’s so they don’t, for instance, close cargo doors on customer’s hands or run into anyone on a sidewalk in a rush to make the next delivery on time.

Dispatch raised an initial $2 million in financing last year.

Nuro:

In January, Mountain View, Calif.-based Nuro unveiled a prototype fully autonomous delivery vehicle about the height and length of a standard compact SUV, but only about 3.5 feet wide. Its cargo capacity is 250 pounds.

Nuro is still in testing and hasn’t yet inked any commercial deals.

The Nuro vehicle has a windshield to make it look a bit more familiar to onlookers, but carries no driver. Its guidance system is in a canister mounted atop a crossbar gracefully curving over the soft-edged, rectangular vehicle, looking a lot like the handle of a large shopping basket.

That might be the idea. Nuro’s vehicle is, essentially, a shopping basket — with brains. It also is customizable, the company says.

The Nuro delivery vehicle

The Nuro delivery vehicle is slightly smaller and much narrower than a compact SUV. (Photo: Nuro)

The cargo hold can easily be configured for a variety of cargo types.

The company has secured $92 million in initial funding.

Starship Technologies:

London-based Starship is developing a small, low-speed electric delivery vehicle — smaller, even, than Dispatch’s — for urban centers.

Starship’s vehicle looks a bit like an ice chest on six wheels. It weighs just 50 pounds, rolls at human walking speed, uses sidewalks and carries fairly small loads for short distances. Its round-trip range is about 5 miles.

The idea is to provide an inexpensive delivery vehicle that can make it profitable to offer delivery of groceries, prepared meals, laundry, even tiny orders such as a package of lightbulbs.

Starship robot

The six-wheeled Starship delivery robot can climb curbs and carry up to 50 pounds of cargo. (Photo: Starship Technologies)

In London and on the San Francisco Peninsula, Starship tests have been run in cooperation with pizza restaurants, including Domino’s.

Starship’s fleet of 150 prototype delivery bots have logged more than 60,000 miles in Europe and the U.S. as of October 2017.

In 2017, Starship announced a $17.2-million investment from Germany’s Daimler AG and several U.S. and European venture funds, as well as a partnership with Daimler, parent of Daimler Trucks and carmaker Mercedes-Benz.

Workhorse Group:

Cincinnati-based Workhorse Group makes electric parcel vans and pickup trucks, and has expanded into flying “last-mile” delivery with its truck-launched “HorseFly” octocopter drone.

The electric Horsefly drone, which can carry packages of up to 10 pounds, has been tested in real-world conditions by UPS and is expected to be put into commercial use this year.

The drone sits atop a delivery van and is loaded and launched by the driver. It delivers to remote rural addresses and hard-to-reach locations while the van continues on to its next scheduled stop.

Workhorse horsefly

Not all autonomous delivery vehicles have wheels. Developers of flying delivery drones such as Workhorse’s HorseFly have attracted substantial investment in recent years. (Photo: Workhorse)

The drone can operate in a radius of 2 miles around the van, under present FAA rules, and is programmed to return to the van for re-loading after making a delivery.

The system reduces the time a driver must spend reaching remote locations. That can either cut fuel and other operating costs or increase the number of deliveries that can be made in a normal shift, slashing driver overtime.

Steve Burns, co-founder and chief executive of publicly traded Workhorse, said autonomous vehicles such as the Horsefly drone represent “the first major change in decades in how things are delivered.”

That’s a sentiment that appears to be widely shared in the autonomous vehicle field.

“The very fact we are able to do these trials shows how far we’ve come; much faster than the experts had predicted a few years ago,” said Don Norman, a professor and autonomous vehicle researcher at UC San Diego.

When they are ready for the real world, whether now or several years down the road, the disruption from autonomous local delivery vehicles “will be huge,” he said.

Read Next: Why Trucking and Logistics Will Lead the Autonomous Vehicle Revolution

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