Delivery Automation
By: Dan Slomski
Tags: Delivery, Robotics, Technology, Automation, Venture Capital

Delivery Automation

In my previous post we discussed warehouse automation, including fulfilment and distribution center logistics. There we explored how objects are stored, inventoried, picked, and packaged for shipment, and how robotics will play an increasing role in that work going forward. Today I want to explore what happens to the packages after they leave the warehouse, and how robotics technologies are being leveraged to deliver them to other destinations. This includes autonomous freight shipping as well as last-mile delivery to businesses and residences.

As we look to automate more of the logistics and material-handling needed to operate a distribution center it is natural to consider the warehouse operations of companies that carry packages from the warehouse to customer’s doorsteps. Companies like FedEx, UPS and DHL are all utilizing robotics to ensure their operations are more resilient. Fetch Robotics and 6 River Systems which are both active in the warehouse automation space also count DHL as a customer. And DHL announced in March 2020 that they would be expanding their partnership with another AMR (autonomous mobile robot) developer, Locus Robotics, to 10 new locations this year (Zdnet). FedEx recently began using robotic arms from Yaskawa America, equipped with computer vision technology from startup Plus One Robotics, to address the volume of packages in its Memphis facility (TechCrunch). In 2019, UPS brought on 22 new automated facilities across the world (which yielded 25% — 35% efficiency increases) and said that 70% of its packages passed through automated facilities, an increase from 50% in 2017 (Business Insider).

In 2016, McKinsey projected that within a decade 80% of all items delivered would be done so autonomously, and COVID has only hastened this timeline. The need for social distancing and reduced contact between people has also led to increased demand for contactless delivery of packages, groceries, takeout and other goods. While there will probably always be a need for human delivery personnel, part of this last-mile delivery demand might soon be satisfied with autonomous, land-based robots or vehicles and by aerial drones.

Safety and Regulation

One of the biggest hurdles facing any robotic system operating out in the wild in an uncontrolled environment is maintaining safety of the public, with significant regulatory barriers (as well as liability concerns) that come along with that. The most pressing concern for any company designing a robot to operate in the vicinity of humans is that it must be *extremely* unlikely to hurt anyone. This is true for both fully-autonomous systems as well as tele-operated or remote operated systems, and is one of the main hurdles holding back level 3,4, and 5 autonomous automobiles. The way we think about the difficulty involved with designing autonomous and robotic systems for different environments could be divided into three categories. The first, and easiest involves operating a robotic system in a closed environment with no humans present, or where humans are excluded from dangerous zones by cages or barriers. The next level of difficulty occurs when robots and humans will share physical space, but where the humans are instructed or trained to gain familiarity with the particular robotic systems in their vicinity; such as warehouse employees trained in what to watch for and how to respond. The third and most difficult situation to design for is when a robotic system will operate around people unfamiliar with the equipment, unpredictable in their responses, and potentially unaware that the robot is even present. This last category is what must be addressed for a delivery robot operating out in the open in an uncontrolled environment. One way that this addressed is by being slow moving, or small, such that a collision is less likely to cause injury or property damage.

Air-based drone technologies have some apparent safety advantages in this regard for urban delivery settings, in that they don’t need to interact with humans much (if at all) to accomplish a delivery mission. However a drone falling from the sky may be moving quite fast with an unpredictable trajectory, leading to a potentially dangerous impact and unpredictable consequences on the ground. There are also many considerations to be made about commercial airspace and keeping drones out of the flightpaths of larger aircraft.

Ground-based delivery is in some ways easier because it can be performed by smaller robots restricted to slower speeds. Further, those that can operate on sidewalks that do not need to drive on the road with other motorists can have reduced complexity and risk in executing a delivery by ground than by air, especially in urban settings. The trade-off to be considered here is that a sidewalk environment (as well as an urban roadway) can be a chaotic setting for the robot to navigate, more so than the relatively clear airspace above.

Ground-Based Autonomous Delivery

FedEx has experimented with autonomous delivery of same day orders via its Roxo robots (developed by the inventor of the Segway), which it began testing in 2019 (The Verge). There are also many startups in this space taking a variety of approaches to contactless delivery. Starship Technologies (founded by a pair of Skype co-founders) uses autonomous, 20 pound robots to deliver food and groceries in markets such as Tempe, Washington, D.C., Irvine and Milton Keynes, U.K. (TechCrunch). Nuro, which uses autonomous on-road vehicles to deliver food, groceries, and dry cleaning among other things, raised $1 billion from SoftBank in 2019 (The Verge — Robot delivery startup Nuro raises nearly $1 billion from SoftBank); and is expanding into prescription delivery with its recent partnership with CVS (The Verge — Nuro’s driverless delivery robots will transport medicine to CVS customers in Texas). At the start of the pandemic, Unity Drive Innovation (UDI) delivered meal boxes and produce via an autonomous van in the Chinese cities of Zibo, Suzhou and Shenzhen. Since 2018, UDI’s vans have been used by Foxconn to transport parts inside its 200,000 worker Shenzhen campus (IEEE Spectrum). Chinese e-commerce company JD.com also began deploying autonomous van delivery services for last-mile delivery inside Wuhan when the pandemic first emerged and the city was under lockdown (RTE Ireland). Amazon is also in on the last-mile delivery robot game, with its cooler-sized, six-wheeled Scout robot being used in Irvine and Snohomish County, Washington for over a year now (DOGO News). Scout was also deployed in Atlanta, Georgia and Franklin, Tennessee starting in July 2020 (USAToday). In line with the movement towards a RaaS (Robotics-As-A-Service) business model, companies like Kiwibot are offering last-mile delivery robots as a service to restaurants, governments and delivery apps.

Aerial Drone-Based Autonomous Delivery

Aerial drone delivery is a tantalizing option for retailers and logistics companies because it reduces shipping costs, makes last mile delivery less cumbersome, and results in quicker shipping times for customers. But drones are limited in the weight and dimensions of the packages they can carry, and the regulatory environment at the federal and local level can be tough (and sometimes impossible) to navigate. Nevertheless, there are many companies working on drone delivery, from startups, to large tech firms like Amazon and Google, to traditional retailers like Walmart, to logistics companies like UPS. Amazon’s Jeff Bezos put drone delivery on the map with his 2013 interview on 60 Minutes, and Amazon continues to invest heavily in it’s drone delivery capabilities, known as Prime Air; it was originally slated to launch in August 2020, but has yet to materialize, most likely held back by FAA restrictions (BusinessInsider). BusinessInsider also notes the following about Walmart:

“In 2019 Walmart was on pace to file more drone patents than Amazon for the second year in a row. With drones having a fairly small range of about 15 miles, Walmart is perfectly positioned to dominate the commercial drone industry thanks to its giant network of stores in the US.”

Walmart also partnered with Flytrex, a Tel Aviv based drone delivery startup to deliver goods from a local Walmart store to residents of Grand Forks, North Dakota in April 2020 to address the needs of sheltered-in-place shoppers (Forbes). Wing, Google’s drone delivery services, is available in a number of locations, including Virginia, Finland and Australia, and saw its deliveries in Virginia double when the COVID outbreak began (Bloomberg). Wing’s electric-powered drones also deliver certain FedEx packages and products from Walgreens (BusinessInsider). UPS’s Flight Forward drone delivery service became the first of its kind to obtain FAA approval to operate as a commercial airline in 2019 (BusinessInsider). In May 2020, UPS announced that it would begin delivering prescriptions from CVS to a retirement community in Florida, the company had been testing the service in North Carolina prior to this (The Verge). UPS uses drones built by startup Matternet. Airbus completed the first shore-to-ship drone delivery in Singapore in early 2019, and is undertaking further trials of the service (Airbus). In May of this year Zipline, a drone delivery unicorn focused on delivering medical supplies to healthcare providers, began delivering personal protective equipment via drone to Novant Health Medical Center in Charlotte, North Carolina, a process the The Verge described as such:

The service has begun by delivering supplies to Novant Health’s Huntersville medical center from a depot next to its facility in Kannapolis, North Carolina. Once the drones reach their destination, they drop the supplies via parachute, meaning the center doesn’t need any additional infrastructure to receive deliveries. Zipline says its drones can carry almost four pounds of cargo and travel at speeds of up to 80 mph.

Another name in the space to watch is Flirtey, which helped Domino’s Pizza execute the first drone delivery of pizza in New Zealand in August of 2016 (UAV Coach).

There are also companies pursuing larger format semi-autonomous aircraft capable of delivering hundreds of pounds of cargo, using airframes more similar to a winged airplane or VTOL craft. One such company is Elroy Air, capable of delivering 250–500lbs of cargo up to 300 miles, with autonomous cargo loading and unloading at the endpoints. Another such company is Sabrewing, boasting up to 5500 lbs of payload with VTOL ascent, and a 1000 mile range. Both of these companies are expecting to be significantly geographically restricted in where they can fly, intending to only operate their early systems above sparsely populated areas and warehouse-to-warehouse routes to comply with safety requirements. The entire autonomous-flight industry eagerly awaits the regulatory frameworks still in development by the FAA and other airspace organizations that will govern how such autonomous and semi-autonomous craft will be allowed to operate in the future, especially in the vicinity of urban areas.

Autonomous Trucking

Before items and packages can be dropped off at our doorsteps via drone, robot or autonomous vehicle, they need to get from factories, warehouses and other facilities to distribution centers. And autonomous trucking will soon be playing an important role in that part of the process. In some ways, autonomous trucking is more straightforward than autonomous cars, because “Unlike self driving cars, autonomous freight delivery is more predictable and easier to map since the services run on fixed routes and typically stick to major highways with few intersections or pedestrians” (Research and Markets). As with ground and drone deliveries, there are a number of large companies and smaller players jockeying for position in this market. UPS is piloting self-driving delivery vans and trucks in Arizona with both Waymo and startup TuSimple. In Arizona, Waymo, which is owned by Alphabet/Google, is delivering UPS packages from stores to sorting facilities, and is also delivering car parts for AutoNation. It plans to expand testing to New Mexico and Texas this year (VentureBeat). TuSimple which “uses Navistar trucks outfitted with the startup’s own self-driving tech, which sees the world largely through nine cameras” (The Verge) counts UPS, Nvidia and Navistar as corporate investors. The company is planning to expand to Texas this year, where it will service cities like Dallas, El Paso, Houston and San Antonio. Trucks equipped with TuSimple’s technology still must have a human driver present to take over if needed. Ike, named for President Eisenhower and the interstate highway system he helped create, is a San Francisco based autonomous trucking startup founded by former Apple, Google and Uber employees, and which started off by licensing technology from Nuro (Bloomberg). Ike raised $54.5m, including from Fontinalis Partners, whose founding partner is Bill Ford, the Executive Chairman of Ford Motor Company. I personally appreciate the systems-based philosophy that Ike is taking in their design-work, where they are “focused on an entire system that accounts for everything in the self-driving truck, from its wire harnesses, alternator and steering column to durable sensors designed for the highway, computer vision and deep learning that allows it to see and understand its environment and make the proper decisions based on that information. That systems approach also includes proper validation before testing on public roads.” (TechCrunch). Other companies in this space include Embark Trucks and Kodiak Robotics.

It is worth noting that despite the massive amount of development work happening in this space, fully autonomous vehicle technologies may still be far away. Uber, for instance, shut down its self-driving truck project a few years ago (MIT Technology Review). And YC-backed Starsky Robotics, who are credited as the first company to complete a 7-mile highway journey without a human onboard, shut down their company in March 2020. In a summarization of several recent MIT papers, Supply Chain Digest noted that the MIT researchers concluded that fully autonomous trucking “is likely decades off, and the near term step in freight movement is likely semi-automated platooning for long haul moves.” Semi-automated platooning involves a lead truck driven by a human with a self-driving truck or fleet of trucks following behind. This approach is employed by startups such as Peloton Technology, which has taken investment from corporates like UPS and Volvo; and Locomation, which completed a public road trial in August of this year (VentureBeat). This paradigm of tandem human/autonomous trucks is a likely stepping stone to fully autonomous trucking.

Autonomous Watercraft

Autonomous watercraft for cargo transport is another way to reduce human intervention with goods being shipped. Even prior to COVID-19, water-based transport technologies were already becoming important for their ability to mitigate human error (and the consequent financial losses) in the shipping process. “It is estimated that 75% to 96% of marine accidents can involve human error” and that between 2011 and 2016 human error in sea-based cargo transport accounted for $1.6 billion in losses (Allianz). As a result, companies have been working to reduce the potential for human error by developing autonomous watercraft for shipping cargo; in 2019, a vessel developed by SEA-KIT executed the “first commercial crossing of the North Sea to be made by an autonomous vessel” (BBC). In addition to reducing or eliminating the potential for human error, autonomous ships will yield additional benefits: “Free from crewmembers, ships will be redesigned to be more efficient, since ship builders can eliminate accommodation structures such as the deckhouse and living quarters, as well as energy-expensive functions like heating and cooking facilities. Crewless ships will undergo a radical redesign to eliminate excess features and increase efficiency and carrying capacity” (DigitalTrends — Autonomous ships are coming, and we’re not ready for them). Rolls-Royce has been a leader in autonomous cargo shipping, and their VP of Marine Innovation, Oskar Levander, said in 2016 that “This is happening. It’s not if, it’s when. The technologies needed to make remote and autonomous ships a reality exist … we will see a remote-controlled ship in commercial use by the end of the decade” (Digital Trends — Rolls-Royce’s cargo ship of the future requires no onboard crew). In 2019 Shipping giant Kongsberg purchased Rolls-Royce’s Marine division, which had been conducting tests of autonomous ships in Finland; Rolls-Royce netted $500m from the transaction (Maritime Executive).

While the technology to facilitate autonomous ships is being developed rapidly, its proliferation will be slowed by regulation. The International Maritime Organization (IMO) is an arm of the United Nations that sets regulations for international shipping. The chair of the IMO’s working group on autonomous cargo shipping, Henrik Tunfors, has described the IMO as “a slow-moving organization” and that “The pessimistic scenario is that regulation will fall in place between 2028 and 2032, but if we start working straight away, we may have some regulations by 2024. But that’s very optimistic” (Wall Street Journal). That being said, the Journal does note that “Autonomous ships that do short trips on national waters will only need approval by local regulators.” Nevertheless, it is unlikely that autonomous watercraft will proliferate quickly enough to have any impact on reducing the spread of COVID, but they may play an important role in ensuring resilient supply chains that can withstand another outbreak.