Walmart has announced it will expand its last-mile delivery service to other clients, offering what it terms a “white label” logistics platform to outside merchants. This final leg of an item’s journey to a home or business is often the part of the supply chain most fraught with errors and delays. Walmart, as noted by the Washington Post, like so many other companies, is attempting to step up its proverbial game to meet the level of competitors Amazon and Target and could also become a rival to FedEx, UPS, and the US Postal Service.
In the last 3 years, the company has focused on increased same-day delivery services, a hallmark of Amazon Prime. Part of the Walmart’s delivery rethinking will look to become more efficient with its own product line but also to capture an increased global marketplace delivery market.
The retail giant had only delivered its own products until now. The new Walmart GoLocal will has real potential to expand company profitability by extending access to additional inventory and by increasing delivery density. The new last-mile shipments will include an assortment of items, including those with size and complex requirements, as well as the flexibility to meet varying timelines.
“In an era where customers have come to expect speed and reliability, it’s more important than ever for businesses to work with a service provider that understands a merchant’s needs,” said John Furner, president and CEO, Walmart US. “Walmart has spent years building and scaling commerce capabilities that support our network of more than 4,700 stores, and we look forward to helping other businesses have access to the same reliable, quality, and low-cost services.”
Tom Ward, the company’s senior vice president for last-mile deliveries, said in a recent call with reporters that Walmart may broaden its delivery staff so Walmart employees, more gig workers, and drones fulfill orders. Hinting that Walmart GoLocal already has agreements with national retail clients, Ward described how Walmart could deliver cupcakes from local bakeries as easily as it could ship car parts from automotive merchants.
Walmart Goes Autonomous with Gatik
Autonomous vehicles may make the difference in Walmart’s quest to compete or surpass its rivals in strategic deliveries. In 2020, Walmart initiated its pilot program with autonomous vehicle company Gatik. This year, Gatik’s autonomous box trucks will be fulfilling Walmart customer orders without safety drivers, driving products between a dark store — a store that stocks items for fulfillment but isn’t open to the public — and a Walmart Neighborhood Market in Bentonville, Arkansas.
Gatik moves goods from micro-fulfilment centers and dark stores in urban environments to pick-up points such as brick-and-mortar retail stores and distribution centers. The goal is to optimize hub-and-spoke operations, enhance inventory pooling across multiple locations, reduce labor costs, and meet expectations for contactless delivery. The pilot project has allowed Walmart and Gatik to test and problem-solve, “to monitor and gather new data to help us stay on the leading edge of driverless autonomous vehicles,” Ward outlined.
Gatik’s electric autonomous box trucks create a sustainable logistics space. They’re designed with an all-electric powertrain, offer a range of 120 miles, and can reach full charge in less than 1.5 hours. An energy-efficient autonomous solution to optimize freight movement on the middle mile, these autonomous delivery vehicles can be instrumental in reducing some of the 2,200 million metric tons of CO2 emissions unleashed each year by North America’s transportation sector.
Gatik has logged 70,000 operational miles in autonomous mode since 2019, in most cases with a safety driver behind the wheel to monitor deliveries. The company focuses on short-haul, business to business (B2B) logistics for the retail industry, enabling its customers to optimize their supply chain at affordable convenience. The new service unlocks the opportunity for customers who live farther away from Walmart’s store in New Orleans to benefit from the convenience and ease of Walmart’s pickup service — with all the benefits that electrification brings.
Moving beyond initial tests, the Walmart/ Gatik pilot involves multi-temperature autonomous box trucks that operate that same 2-mile route without a driver. The extended reach looks to the Louisiana market, where a Gatik vehicle carries customer orders from a Walmart Supercenter in New Orleans to a customer pickup location in Metairie, 20 miles away.
How Autonomous Middle Mile Logistics Make Sense
In North America alone, 30% of greenhouse gas emissions come from the transportation sector. Gautam Narang, co-founder and CEO of Gatik, argues that fixed, point-to-point middle mile logistics is a good fit for an electric vehicle’s range and charging infrastructure due to the distances and vehicle class involved. Savings that emerge from autonomous EV deliveries can, in turn, be passed on to consumers — contributing to a sustainable logistics ecosystem that connects service provider, customer, and consumer.
Narang says that Gatik tries to understand how to simplify and solve the most complex challenges in the logistics industry by addressing real world problems. As the retail industry was forced to be “progressively dynamic as a result of changing consumer behavior,” it struggled to meet the on-demand and costly nature of short-haul logistics. Yet sustainability was both a “collective challenge and a collective responsibility,” with tensions arising from the need to meet consumer expectations for real-time access to goods increasing faster than the most bullish predictions.
Long-haul trucking involves trade-offs between battery range and route length, yet operations on the middle mile involve multiple journeys per day on relatively short distances. Electric autonomous box trucks can charge while they’re being loaded and unloaded, allowing for uninterrupted service, significant emissions reductions, and savings on fuel and powertrain maintenance costs. Such new possibilities with electrification, says Narang, are becoming “a dynamic field” with “exciting advancements in the short-haul space” such as class 3–6 EVs, which are expected to come to market in the next 1–2 years and which can be autonomous enabled.
Gatik was founded in 2017 by veterans of the autonomous technology industry and has established offices in Palo Alto and Toronto. With its fleet of light to medium-duty trucks, Gatik has established itself as a key player in autonomous middle mile delivery.
Images provided by Gatik
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