Solving the tricky last-mile: Delivery robots to rescue e-commerce

Logistics companies refer to it as the “last mile” – the final stage of dispatch, when the item goes from the local depot to the customer’s address.

The last mile is often the most complex part of the journey, and probably the least cost-effective, for obvious reasons:

• the delivery vehicles are large and yet the parcels are small, making each delivery relatively expensive; and
• the vehicles often have to traverse narrow, winding streets, covering much less ground using the same amount of petrol as when traveling much longer distances on a typical motorway, for example.

These factors, and many other difficulties, are why a lot of companies have been researching and developing a wide variety of interesting solutions for that tricky last mile. And with e-commerce growing so fast, the solutions can’t come fast enough.

One or two large organizations, such as the US Postal Service, have integrated a truck-plus-drone solution, in which the drone stays in the line of sight of the worker, which it has to by law.

The truck or van would get to with a few dozen or hundred yards of the delivery address and the worker would manually navigate the drone to make the final delivery.

Some, like Amazon, have been pushing for drone deliveries direct from the depot to the final address, perhaps using a more computerized process, where not all of the drones are individually controlled by a human, and not in their line of sight.

Others, such as DHL, have been introducing semi-autonomous vehicles that carry all the parcels along the pavement and accompany the delivery person, saving that worker from pushing what can be a heavily loaded cart.

An automated cart seems less likely to meet resistance since it’s not much different from the traditional ones, but drones are fraught with all sorts of regulatory issues that people have never had to consider before, and therefore, they may not be widely adopted.

Just stop shopping

What’s more likely to happen than drones is that small, autonomous vehicles – the carts minus the human – will be allowed to share the pavements with humans. But even that’s not a guarantee everywhere.

San Francisco authorities famously put the brakes on pavement-going delivery robots last year, arguing that not enough consideration is being given by the companies to the surrounding humans.

But that sudden antipathy may have seemed slightly hysterical – though certainly reflective of widely shared concerns – and looks like it may have been an isolated instance of what could be called “Luddite syndrome”.

Some pavement-going robots have actually been attacked, but this could be the work of people who go around vandalizing other things as well, and not related to specific issues concerning the robots.

This is an unscientific view, but we think autonomous delivery robots – the carts minus the humans – will increasingly become a feature of urban landscapes.

And while we wait for regulatory challenges to be raised against them, why not check out our list of 10 delivery robot companies which look set to capitalise on what could become a fast-growing market.

Don’t buy anything

According to research by Mordor Intelligence, the market for autonomous delivery robots has been growing at a rate of 14 percent a year since last year, and will continue to do so until 2023.

It’s a nascent market, so in absolute terms, it’s probably not a massive size. It’s difficult to gauge because all of the companies and their solutions are very new, with many still in the testing phase.

But Mordor points out that, which e-commerce is booming, the National Retail Federation calculated that US companies lost approximately $333 million due to shipping mishaps in 2017.

“These losses are amplified by the 2017 holiday season,” says Mordor.

“Owing to such issues in delivery, various logistic operators and retailers have been looking for better and efficient methods of delivery.

“Delivery mishaps often increase the time taken for delivery resulting in bad reviews from the customers leading loss in business.

“Retailers in the supply chain have also felt the need for better systems in the delivery of products. It is estimated that about 81 percent of the suppliers feel the existing supply channel is not fit for serving omnichannel.”

“Omnichannel e-commerce” refers to the growing tendency of companies to provide what’s described as a “seamless” shopping experience. So, a customer can order what they want across multiple devices as well as within brick-and-mortar stores, but not have to deal with any complexity – to do with logistics and supply chain – beyond ordering and receiving what they ordered.

Grow your own products

The last-mile delivery has been one of the “primary problems” in handling supply chain, says Mordor, adding that the advent of autonomous delivery robots has “revolutionized the delivery systems providing a cheaper and efficient way of delivery”.

Though delivery robots have not had high adoption, they are expected to have high growth in the future owing to various advantages.

Majority of the companies have been investing for better models in last mile delivery such as click and collect, pick up locations, smart lockers and so on, as an alternative for faster and better delivery of products.

With the increasing use of autonomous delivery vehicles efficiency and better consumer experience can be achieved compared to these existing modes of delivery, says Mordor.

The use of delivery robots has aided in the ease of delivery logistics as this is one of the major mishaps that has been occurring.

Though the number of autonomous vehicles is limited, as the vehicles used are being remotely monitored, they are expected to increase owing to various technological innovations.

Companies such as Postmates and others have been using ground delivery robots for conducting logistic operations. The company has not been charging consumers any extra charges for the service.

It has provided the customers with the choice of opting out of these systems. Governments such as Switzerland have been implementing such systems. Switzerland had tested the use of robots for mail delivery through Swiss Post. After a series of tests, the Swiss postal service is yet to decide upon their usage.

Hitch your bot

North America, meanwhile, has a high adoption rate for such autonomous delivery robots owing to many investments and adoption trends in the region.

Companies such as Starship Technologies have been investing significantly in North America for the growth of delivery robots.

Areas such as Silicon Valley and Washington DC have been implementing the use of such robots.

HitchBot, which had traveled to Canada before its implementation in the US, was one of the robots that were attacked vandalized on its route.

Delivering groceries with delivery robots has been tested, with Canada as one of the primary regions, but the robot was vandalized in Philadelphia.

Retailers have been considering the use of robotics in various activities, particularly as labor costs have been increasing, while at the same time, labor is becoming scarce.

Some companies, such as Canadian retailer Sobeys, have adopted delivery robots in a big way. With an exception of 21 of its traditional outlets, most of its automated centers use robots to deliver to about 1,500 grocery stores.