In the past few years, Venture Capital firms have invested close to $10 billion in start-ups offering unconventional last-mile delivery models such as drones, robots, autonomous vehicles, and stationary or even mobile parcel lockers. (Mckinsey, 2020) These autonomous delivery models fall into two categories, aerial delivery drones, and ground delivery vehicles. They are meant to complement the traditional last-mile logistics fleet model but they could also become industry disruptors.
There are still challenges to overcome with autonomous last-mile delivery technologies including; (Siemens, 2020)
Autonomous ground delivery vehicles are limited in their ability to navigate beyond short distances and testing continues in small designated urban, suburban and resort areas, and on college campuses. Also, the closing of college campuses during the coronavirus pandemic may cut into the plans of companies relying on that market.
Investment continues to fund improvements to the software and infrastructure needed for secure and accurate vehicle-to-infrastructure and vehicle-to-vehicle autonomous delivery communications.
Federal, state, and municipal regulatory agencies are only just beginning to develop and enact guidelines for the legal operation of delivery robots and are having trouble keeping up with technology advances. Although there is no federal law yet governing autonomous vehicles, about 40 states currently have passed some kind of autonomous vehicle guidelines or regulations. This creates a patchwork of regulations for the autonomous delivery players to navigate and slows the launch of driverless delivery initiatives.
Similar to electric vehicles, autonomous delivery drones and robots need to be able to recharge. Accessible charging stations of some kind are needed to maximize the efficiency of driverless last-mile delivery programs.
The safety and accuracy of last-mile delivery by unmanned aerial drones are being tested under the Federal Aviation Administration’s (FAA) current Part 107 regulations. Many companies like Amazon, Walmart, Dominos, UPS, and FedEx are exploring the option and some are running localized trail programs.
Aerial drones are also showing enormous humanitarian promise for the delivery of medical supplies in rural, remote, and underdeveloped areas around the world. The first human organ was transported by drone to Maryland University Hospital in 2019 and successfully transplanted into a patient. Medical supplies are being delivered to remote areas in Africa using aerial drones, strategically located distribution centers, and parachute drops. The same drone company (Zipline) is now also delivering medical supplies to frontline workers in North Carolina.
Here are a few current driverless last-mile delivery statistics and news updates:
The autonomous last-mile delivery market includes start-ups and major players. Here are some of the participating autonomous delivery companies.
The growth of e-commerce is driving the current growth of the driverless delivery market. The adoption of drones and robots for last-mile delivery is also getting renewed attention because of the current pandemic and the need for social distancing. Also, the makers of driverless vehicles originally designed to carry passengers are finding it to be more attractive to carry packages, at least during the pandemic. No one knows if the autonomous last-mile delivery market will continue to grow post-pandemic and if there will be a market beyond food and grocery delivery. Some investors are cautious and while others are all-in. We will just have to wait and see.
Check out the previous story in our Last Mile Logistics Trends series looking at New shopping patterns and last-mile delivery.