The Current, delivered daily.
A pair of moves to deploy driverless vehicles are being called landmarks for the efforts to introduce autonomous logistics into ecommerce.
The partnerships span both the last mile and middle mile. Take a look:
Gatik goes driverless with Loblaw in CanadaA Gatik truck. (Photo by The Current)
In Canada, the grocer Loblaw is expanding a relationship with Gatik, an autonomous middle mile logistics company.
This week, Gatik said it is launching fully-driverless vehicle operations for Loblaw. Gatik box trucks are transporting “select” grocery orders for Loblaw’s PC Express service, which provides delivery of grocery and convenience items.
It marks the first time Gatik removed the driver on a daily delivery route in Canada. The companies said autonomous vehicles enable Loblaw to operate more routes, make more frequent trips, and create a more sustainable and resilient supply chain.
The companies started deploying autonomous vehicles in January 2020. They have since transported 150,000 autonomous deliveries with a safety driver onboard. The safety record in that time has been 100%, the companies said.
To verify safety, Loblaw commissioned a three-month study by a third-party firm. Then, Gatik’s fleet transported goods seven days a week from a Loblaw distribution facility to five retail locations in Greater Toronto on fixed, repetitive and predictable routes.
“This milestone marks the expansion of Gatik’s autonomous delivery service to Loblaw’s customers across multiple sites,” said Gautam Narang, CEO and cofounder of Gatik, in a statement. “Canada is the latest market in which we’ve launched our fully driverless service, further validating that the tangible benefits of autonomous delivery are being realized first in B2B short-haul logistics. It’s a privilege to achieve this commercial and technical landmark with Canada’s largest retailer.”
Gatik’s box trucks are designed for the middle mile, which transports goods between retail facilities and storage. Last month, the company signed an agreement with Pitney Bowes to pilot autonomous logistics for ecommerce operations in the Dallas area, starting in early 2023. The growth shows the advantages of autonomy can be realized not only in delivery, but also in moving goods upstream.
It comes on the same week that Loblaw is expanding last-mile delivery options as well. Alongside PC Express, Loblaw is making delivery from DoorDash available at nearly 1,100 stores under its umbrella. While ordering will be available through DoorDash Marketplace, DoorDash will also power delivery of PC Express goods through its white-label service.
"Online grocery has changed. It is not a one-size fits all solution. Customers are looking for varying levels of convenience – orders within minutes, shopping from favourite apps, and a seamless experience," said Galen G. Weston, president of Loblaw companies.
Grocers, meanwhile, are looking for logistics to fit each stage of the journey. Loblaw is putting the pieces into place to get there.
Uber and Motional expand
A Motional vehicle. (Courtesy photo)
Earlier this year, we reported on Uber and Motional’s pilot of autonomous deliveries for Uber Eats customers in California. The Santa Monica deliveries were the first time Hyundai and Aptiv-owned Motional outfitted its vehicles for commercial delivery.
Now, delivery is part of a wider agreement between the companies that is being called the first to include autonmous transportation of both people and products.
Uber and Motional signed a 10-year, multimarket agreement that will allow Motional’s electric robotaxis to be deployed for Uber rides. The companies plan to “strategically” deploy the cars in cities around the US, with the first rides expected to start later this year.
"This agreement will be instrumental to the wide scale adoption of robotaxis," said Karl Iagnemma, President and CEO of Motional, in a statement. "Motional now has unparalleled access to millions of riders and a roadmap to scale significantly over the next ten years. We're proud to partner with Uber to bring both driverless ride-hail and deliveries to life in cities throughout the US."
Alongside ride hailing, the agreement includes provisions for an expansion of AVs in the Uber Eats delivery service. The pilot in California was “well received” by customers, the company said, and has been expanded to service more restaurants.
These agreements are significant, but they don’t mean that autonomous vehicles are here. Nevertheless, the agreements show that companies may believe it will be a matter of when, not if the technology is ready. Ecommerce will be a key area where the vehicles are deployed.
Amazon scales back Scout
Along with progress, there's a step back to report in autonomous delivery this week. Amazon said it is ending testing for its autonomous home delivery robot, named Scout. Bloomberg reported that the team behind the project is being dismantled amid cust-cutting that is leading to a pullback on experimental projects at the company.
A spokesperson told Bloomberg that Amazon conducted limited field tests of the robots in several suburban areas to create a new delivery experience, but got feedback that parts of the program did not meet customers' needs.
Scout is roughly the size of a cooler, and is designed to stop at a person's front door and pop open, allowing a person to take a package out.
This news is not so much about Scout itself, as it seemed like the product still had lots of work in front of it. Rather, it means that Amazon won't be testing an autonomous robot for delivery, meaning that a company with lots of knowhow in this area and a history of inventing won't be among those working on the challenge. Robots hold out the potential to reduce emissions and help to streamline operations in last-mile delivery, so it is worth considering how they fit into future logistics plans. Plus, Motional will need something to bring a package to a person's door when its car arrives.
Trending in Operations
Campbell Soup Company CEO Mark Clouse offered thoughts on messaging amid inflationary shifts in consumer behavior.
After months of elevated inflation and interest rate hikes that have the potential to cool demand, consumers are showing more signs of shifting behavior.
It’s showing up in retail sales data, but there’s also evidence in the observations of the brands responsible for grocery store staples.
The latest example came this week from Campbell Soup Company. CEO Mark Clouse told analysts that the consumer continues to be “resilient” despite continued price increases on food, but found that “consumers are beginning to feel that pressure” as time goes on.
This shows up in the categories they are buying. Overall, Clouse said Campbell sees a shift toward shelf-stable items, and away from more expensive prepared foods.
There is also change in when they make purchases. People are buying more at the beginning of the month. That’s because they are stretching paychecks as long as possible.
These shifts change how the company is communicating with consumers.
Clouse said the changes in behavior are an opportunity to “focus on value within our messaging without necessarily having to chase pricing all the way down.”
“No question that it's important that we protect affordability and that we make that relevant in the categories that we're in," Clouse said. "But I also think there's a lot of ways to frame value in different ways, right?”
A meal cooked with condensed soup may be cheaper than picking up a frozen item or ordering out. Consumers just need a reminder. Even within Campbell’s own portfolio, the company can elevate brands that have more value now, even if they may not always get the limelight.
The open question is whether the shift in behavior will begin to show up in the results of the companies that have raised prices. Campbell’s overall net sales grew 5% for the quarter ended April 30, while gross profit margins held steady around 30%. But the category-level results were more uneven. U.S. soup sales declined 11%, though the company said that was owed to comparisons with the quarter when supply chains reopened a year ago and expressed confidence that the category is seeing a longer-term resurgence as more people cook at home following the pandemic. Snacks, which includes Goldfish and Pepperidge Farm, were up 12% And while net sales increased overall, the amount of products people are buying is declining. Volumes were down 7%.
These are trends happening across the grocery store. Campbell is continuing to compete. It is leading with iconic brands, and a host of different ways to consume them. It is following that up with innovation that makes the products stand out. Then, it is driving home messaging that shows consumers how to fit the products into their lives, and even their tightening spending plans.
Campbell Soup is more than 150 years old, and has seen plenty of difficult economic environments. It is also a different business today, and will continue to evolve. At the end of the day, continued execution is what’s required.
“If it's good food, people are going to buy it, especially if it's a great value,” Clouse said.