Autonomous vehicle developer Udelv will use its self-driving vehicles to deliver automotive supplies as part of a multiyear deal with a Texas auto parts chain.
Ten of its driverless vans will cart windshield wipers, generators and other small parts to local automotive service and repair shops for Houston-based XL Parts.
The first deliveries are expected to begin in mid-2019 with a single Udelv van. The deal calls for up to nine more of the driverless, all-electric vans to be placed in service for XL in ensuing months.
Moving beyond Bay Area
The order is the second-largest for Udelv, which was founded in 2016. The Burlingame, Calif., company launched its first commercial operation early this year with single van serving a small group of gourmet grocery stores on the San Francisco Peninsula.
“In this package-delivery space, certainly Udelv appears to be moving closer to establishing a real business model,” Michael Ramsey, senior research director for smart mobility at Gartner Inc., told Trucks.com.
“Of course, removing the (safety) driver and having the vehicles actually operate on their own will be the real test of whether this system will truly be effective in solving some of the last-mile delivery challenges,” Ramsey said. “But the company is getting good firsthand experience with the kinds of things that can happen when you take a driver out of the mix and have made good adjustments to make the process smoother.”
Udelv operates as a delivery-services provider, so its deals include the vans and a variety of proprietary ordering, shipping and van management and monitoring services, including the safety driver.
To date, Udelv vans have made more than 1,000 delivery runs for a variety of clients in the Bay Area without incident. The vans are fully functioning autonomous vehicles, but operate with an on-board safety driver who is ready to take control if any of the autonomy features fail.
After testing and expanding delivery services in that area, Udelv in October announced a deal to sell 10 vans to a grocery-store chain operator in Oklahoma.
The Buy For Less group will be using them to expand service throughout the metropolitan Oklahoma City area without having to build additional stores. The company also has signed on to be the exclusive Udelv marketing agent for the state of Oklahoma.
The parts retailer’s strategy is similar. XL Parts decided to use driverless delivery vans to advance its position in its markets, said Mike Odell, the company’s president and chief executive.
“To remain the leader in our markets we are constantly exploring the latest developments,” Odell said. “This investment with Udelv in autonomous delivery vehicles allows us to advance our business and to understand the future of our industry at the same time.”
The company delivers more than 10,000 parts per day to auto service and repair centers in Houston and several other cities in Texas, Oklahoma and southern Louisiana. It is initially limiting service to its home base in Houston to better monitor the program.
“Eventually, we hope to expand to other XL Parts markets around Texas, Oklahoma, Louisiana and Florida,” Adriel Lubarsky, Udelv’s business development director, told Trucks.com.
Although the low-speed vans will be making regular deliveries from XL’s central Houston warehouse to several of its stores, it still is considered a test of the technology.
The safety drivers in Udelv’s custom vans do not interact with the shipping clients or delivery customers.
They will remain until both XL and Texas state regulators decide the vehicles can be operated without an onboard human safety net.
Udelv and its clients are getting in at the forefront of a revolution in local and last-minute delivery.
There will be as many as 1 million self-driving vehicles in operation around the word by 2040, remaking
the way consumers shop and the way manufacturers, wholesalers and retailers do business, global consulting firm KPMG predicted in a recent report.
Autonomous delivery can slash last-mile delivery costs by as much as 50 percent, Daniel Laury, Udelv’s chief executive, told Trucks.com.
While Udelv appears to have a lead in the autonomous delivery race, it certainly isn’t alone.
Walmart recently announced a program in Florida with Ford Motor Co. An autonomous vehicle developed by Ford will deliver groceries to Walmart customers in the Miami area starting early in 2019.
Though there currently are seven states that allow some form of autonomous driving, some are very limited in scope and in permitting use of public roads. Arizona, however, was one of the first states to open up to truly driverless vehicles and is most liberal in its willingness to approve test programs.
Waymo, the former Google self-driving operation, is conducting self-driving vehicle test programs in the metropolitan Phoenix area that involve shuttling shoppers and tourists.
In a separate Waymo program, a driverless vehicle brings people to an Arizona Walmart store to pick up preordered groceries, instead of taking their grocery orders to them.
Kroger Co. also is testing home grocery delivery in Arizona with Silicon Valley startup Nuro, which makes a self-driven delivery pod that’s about half the size of a traditional minivan.
The differences in autonomous vehicle use illustrate what KPMG calls the “islands” approach to planning for the future.
Companies that hope to be successful “must carefully analyze the complex markets of each island, one by one, because no two islands are exactly the same” in the types of services they will need, said Gary Silberg, KPMG’s U.S. automotive practice lead and a co-author of the report “Autonomy Delivers: The Oncoming Revolution in the Delivery of Goods.”