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.

Autonomous delivery challenges

There are still challenges to overcome with autonomous last-mile delivery technologies including; (Siemens, 2020)

• Distance, size, and weight limitations
• Accuracy in congested urban areas
• Cybersecurity and data privacy concerns
• Government regulations
• Liability, collision, and safety concerns
• Charging technology and infrastructure

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.

Where do things stand and what is new in autonomous last-mile delivery?

Here are a few current driverless last-mile delivery statistics and news updates:

• The global autonomous last-mile delivery market is expected to reach $11.13 billion in 2021 (Supply and Demand Chain Executive, 2020) and is projected to be valued between $76 billion (Business Wire, 2020) and $91.5 billion (Market and Markets, 2020) by 2030.
• Another market report predicts that the autonomous delivery robot market will grow by $16.86 billion (USD) between 2020 and 2024. (Technavio, 2020)
  
• In another research report, year-over-year growth in the Autonomous Delivery Robot Market is measured at 19.34%, and 44% of future market growth is expected in the North America Market, while Europe is experiencing the highest level of current growth.  (Technavio, April 2020)
  
• Retailers, grocery stores, and restaurant chains in the US are testing autonomous last-mile delivery of food, medicine, and even clinical laboratory tests.
  
• The most successful ground delivery vehicle tests are in areas with limited automotive traffic such as autonomous food delivery on college campuses.
• Autonomous robots using vision systems are extensively used in warehouses today (Siemens, 2020) and the global market for warehouse management robots is projected to be $27 billion by 2025. (Frost, 2020)
• In February 2020, Nuro was the first a maker of driverless grocery delivery vehicles to receive permission from The US Department of Transportation and the State of California to operate on US roads without a human driver present. (Robotics Business Review, 2020)
• In April 2020, Starship Technologies reported that their autonomous sidewalk delivery robots have completed 100,000 autonomous deliveries and traveled more than 500,000 miles. (Robotics and Automation News, 2020)
• Six of the leading models of autonomous ground delivery vehicles are highlighted in this YouTube video from Terkrecoms.
• For anyone who wants a detailed look at aerial drone testing results, check out this report on a recent 3-day test of aerial drones on a vacant College Campus in Virginia. Drone maker, DroneUp, ran hundreds of successful test both in daylight and at night. A highly detailed report is available covering the aircraft, camera, flight data, pilot training, payload mechanisms, and communications. (DroneUp, 2020)

Who are the autonomous delivery players?

The autonomous last-mile delivery market includes start-ups and major players. Here are some of the participating autonomous delivery companies.

Delivery robot companies. Delivering goods to consumers.

• JD.com Inc. Chinese retail giant deploys its own autonomous air and ground delivery vehicles.
• Kiwibot Food delivery robots for campus colleges.
• Refraction.ai Restaurant delivery robots, also exploring the market for grocery delivery and delivering items to elder-care facilities.
• Nuro Inc. California robotics manufacturer of autonomous delivery vehicles for transportation of goods between and among businesses, neighborhoods, and homes.
• Postmates Serve is their self-delivery robot for food, drinks, groceries, and more.
• Starship Technologies Inc. California maker of small self-driving robotic delivery vehicles for food and package delivery.
• Pony.ai – California manufacturer of Robotaxi self-driving cars. Partnered with an e-commerce platform in April 2020 to offer autonomous last-mile delivery in Irvine, California.
• Manna Drone Delivery – Irish aerial drone company delivers food, medicine, and other light goods to local communities.
• Zipline –  California maker of drone aircraft, delivering medical supplies by aerial drones to remote areas in Africa and to frontline workers in North Carolina.

Delivery robot companies. Serving Industry and Business.

• Boston Dynamics Inc. Offers different autonomous robot models to perform a variety of tasks in diverse industries. Applications for healthcare delivery and dangerous location options highlighted.
• NAVYA French maker of autonomous shuttles and a self-driving tow-tractor for the transport of goods on industrial sites and airports. Also pilot-tested medical test delivery.
• Optimus Ride Originally focused on moving passengers, the company has a pilot for self-driving delivery of pharmaceuticals and partners with organizations to develop programs like their current program for food delivery at the Brooklyn Navy Yard.
• Savioke Inc. Provides robots to the services industry, including hotels, elder care, hospitals, restaurants, and offices.
•  TuSimple Self-driving truck company for depot-to-depot goods transport without human intervention.

A shifting market. What does the future hold?

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.

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Check out the previous story in our Last Mile Logistics Trends series looking at New shopping patterns and last-mile delivery.