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The State of Delivery Innovation Among COVID-19

Lewie Roberts, Senior Research Associate
April 21, 2020

With populations increasingly practicing social distancing, consumers continue to demand expedient delivery of goods to their residence. This puts significant strain on companies working within last-mile delivery. Last-mile delivery refers to the shipping of products between a penultimate location (like a warehouse, store, or restaurant) and the final customer. Traditional brick-and-mortar companies like Walmart have struggled to compete with internet shopping services like Amazon in the delivery of goods during the last mile, even with 90% of Americans living within 10 miles of a Walmart store. Both parties, and many others, are looking into emerging technologies that could help them in this last-mile battleground. In response, startups and large players alike are making announcements about developments in drones, sidewalk robotics, and autonomous vehicles (AVs) for moving goods. While these technologies will not suddenly emerge and gain massive traction during the COVID-19 pandemic, we expect that interest in these technologies will spike. Indeed, Chinese autonomous vehicle developer Neolix has noted an increase in demand for its vehicles, citing use cases like spraying disinfectants and delivering food.

UPS partners with Wingcopter for next generation delivery drones | Source: Wingcopter

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Commercial drones have the benefit of moving packages quickly, being able to bypass traffic or rough terrain. However, they are limited in the weight of their payloads, making them best suited for small items that must be shipped quickly. Amazon claims its hybrid drone design for Prime Air is capable of traveling 15 miles for deliveries under 5 lbs. Meanwhile, Alphabet's subsidiary Wing has become the first certified drone air carrier in the U.S., following approval from the FAA. In contrast to Amazon's solution, Wing has merchants like small restaurants and pharmacies pack the goods before delivery.

Sidewalk robots move slowly but can carry a slightly heavier payload than drones, though they require continuous paved environments to operate in. Similar to startups like Starship Technologies and Kiwi CampusAmazon and FedEx are rolling out wheeled robots to make small deliveries by traveling along sidewalks. With even more flexibility, the startup Agility Robotics developed a bipedal robot that features four-degree-of-freedom (4DOF) arms for carrying things like packages over more complex environments like stairs. It is partnering with Ford for a research project exploring the potential for combining multiple robots with autonomous vehicles developed by Ford's partner Argo AI.

Autonomous vehicles (AVs) can carry large payloads and move faster than sidewalk robots but are still limited in technical development and regulations. The startup Boxbot plans to build automated warehouses near neighborhoods to sort parcels from partners like OnTrac and ship them over the last mile with a mix of driven and autonomous delivery vehicles. The electric vehicles come equipped with small lockers on the sides for packages, which can only be opened by customers (given a code) to avoid package theft. Parcels can be returned in the same form factor. In contrast, the startup Gatik has emerged from stealth to reveal a B2B strategy as a foil to BoxBot's B2C focus. Using autonomous vans and trucks, the company plans to move short distances between businesses, working with partners like Walmart.

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Each of these different technologies has advantages and disadvantages that make them better suited to certain kinds of deliveries. In an effort to take advantage of a combination of these technologies, Continental previously showed off a concept of an autonomous shuttle that would carry a fleet of doglike autonomous robots to deliver the package right to the doorstep or delivery receptacle at the recipient's home. Realistically, not every last-mile solution will be fully automated in such a way; most will likely use these technologies to slowly augment and improve existing services alongside workers. Companies looking to play in this space should watch for the effects that COVID-19 has on stakeholders, whether it comes from cities, consumers, or the developers themselves.




- Executive Summary: Automating the Last Mile (Free Download)

- Blog: Flexible Manufacturing Systems Combined with Industry 4.0 Can Further Progress Toward Mass Customization

- Blog: Asia's Rise as a Global Autonomous Vehicle Hotbed

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