Walmart and Amazon have been duking it out for retail supremacy. Due to inflated delivery costs, however, Walmart has struggled to repeat its super-store-based retail success in the online space. In order to help alleviate some of those increased costs and remain competitive in the growing online retail space, the sales juggernaut has begun to dabble with autonomous driving technology.
- Walmart will be using Ford robo-vans built by Gatik to move goods in what is called the “middle mile” — a market that could be worth $1 trillion in the future.
- The idea being that robo-vans can lower costs by moving goods from a warehouse to a fulfillment center more cheaply than a human.
- There are fewer logistics in utilizing autonomous vehicles to move goods along repeatable routes than trying to implement a robotaxi business model that transports people.
Unlike most autonomous delivery news we report, in which companies are looking to skip the middle man by utilizing self-driving vehicles to interact directly with customers, Walmart is going another route. It will begin using autonomous Ford vans built by a company called Gatik to transport goods not directly to buyers but rather to get them closer.
The idea is called “middle mile” and analysts predict the market has the potential to reach a $1 trillion valuation in the future.
It is incredibly costly and time consuming to solve all complexities and safety concerns that surround moving humans with self-driving cars. However, moving goods around on pre-mapped routes is much easier. Under the test scheme, Walmart will use robo-vans to move goods from warehouses to fulfillment centers closer to the customers. Ford calls these sorts of routes “milk runs.”
Why is it easier to move boxes instead of humans? “People have more emotions than boxes,” Sherif Marakby, chief executive officer of Ford’s autonomous vehicles unit, told the Detroit News. Plus, picking you up from your home and then taking you to your friend’s house requires a lot of brain power for an autonomous car that may have never driven that route before. Therefore it must be ready to react safely to millions of variables, from animals to pedestrians to weather to traffic.
These middle-mile routes already being run by humans don’t suffer the same obstacles. That saves on further mapping and logistics costs. What’s more, a robot or drone can make these mind-numbing runs 24/7 without breaks or food or healthcare — a human cannot.
“This area has the least number of obstacles and the most certain return on invested capital in the near term,” Mike Ramsey, analyst with Gartner, said. “If you’re looking to start a business where you can actually generate revenue, this has fewer barriers than the taxi market.”
We have discussed this sort of thing before. Robotaxis, though the current hot topic in the autonomous space, are probably the last implementation of self-driving tech that we’ll see. And we’re seeing evidence of that all the time. The Walmart robo-vans are just the latest.
Last week, Volvo Trucks revealed that it will begin using autonomous vehicles called Vera to move shipping containers around on DFDS shipping terminals in Gothenburg, Sweden. Like with the Walmart vans, Vera trucking goods around poses a lot fewer risks than moving humans around cities.