Going the Last Mile with Autonomous Deliveries

Wondering what’s for dinner? If you’re in Reykjavík, Iceland, look up! Since 2017, residents of the Icelandic capital have been receiving deliveries of goods—including hot food—via autonomous drones run by Flytrex. And across the world in Australia, consumers can order up anything from cupcakes and coffee to grocery staples via Wing, a drone delivery service owned by Alphabet, Google’s parent company.

 

While the idea may still seem far-fetched, business is booming. As of May 2020, Wing was seeing a 350% increase in customer sign-ups month over month, and is currently conducting trials in the United States. Flytrex has also been piloting an autonomous delivery program in U.S. cities through a collaboration with Walmart.

 

Autonomous deliveries: a fresh solution

 

Airborne meals are more than a novelty; they’re also a solution to what retailers call the “last mile” problem. This is the perennial struggle to balance time, logistics, labor, and infrastructure in an effort to get fresh products from store shelves to your table. Traditionally, shoppers have addressed this need for themselves by driving or carrying food home. But the popularity of grocery delivery has increased, fueled in part by the pandemic, and it’s expected that by 2025, 20% of grocery purchases will take place online.

 

Miguel Gómez, director of the Cornell Food Industry Management Program, has been observing shopping habits and trends for decades, and he’s not surprised by the advent of high-flying dinner deliveries. He’s noted a steadily increasing demand for food and grocery delivery in recent years, especially from shoppers who are members of Generation X and younger.

 

As with the slightly older program in Iceland, Walmart’s drone delivery range has started small. They began by delivering goods to backyards in Fayetteville, North Carolina, and added nearby Raeford in April 2021. Mushkie Meyer, a Flytrex representative, points to the radical difference in delivery service times that drones enable. “In rural and suburban areas, typical couriers can complete two deliveries an hour. A single Flytrex operator can complete ten in an hour.” This makes hungry customers happy faster. And, as Meyer notes, drones have much smaller environmental footprints than traditional vehicles.

Drone up in the sky carrying a package for delivery
Drone up in the sky carrying a package for delivery

Wondering what’s for dinner? If you’re in Reykjavík, Iceland, look up! Since 2017, residents of the Icelandic capital have been receiving deliveries of goods—including hot food—via autonomous drones run by Flytrex. And across the world in Australia, consumers can order up anything from cupcakes and coffee to grocery staples via Wing, a drone delivery service owned by Alphabet, Google’s parent company.

 

While the idea may still seem far-fetched, business is booming. As of May 2020, Wing was seeing a 350% increase in customer sign-ups month over month, and is currently conducting trials in the United States. Flytrex has also been piloting an autonomous delivery program in U.S. cities through a collaboration with Walmart.

 

Autonomous deliveries: a fresh solution

 

Airborne meals are more than a novelty; they’re also a solution to what retailers call the “last mile” problem. This is the perennial struggle to balance time, logistics, labor, and infrastructure in an effort to get fresh products from store shelves to your table. Traditionally, shoppers have addressed this need for themselves by driving or carrying food home. But the popularity of grocery delivery has increased, fueled in part by the pandemic, and it’s expected that by 2025, 20% of grocery purchases will take place online.

 

Miguel Gómez, director of the Cornell Food Industry Management Program, has been observing shopping habits and trends for decades, and he’s not surprised by the advent of high-flying dinner deliveries. He’s noted a steadily increasing demand for food and grocery delivery in recent years, especially from shoppers who are members of Generation X and younger.

 

As with the slightly older program in Iceland, Walmart’s drone delivery range has started small. They began by delivering goods to backyards in Fayetteville, North Carolina, and added nearby Raeford in April 2021. Mushkie Meyer, a Flytrex representative, points to the radical difference in delivery service times that drones enable. “In rural and suburban areas, typical couriers can complete two deliveries an hour. A single Flytrex operator can complete ten in an hour.” This makes hungry customers happy faster. And, as Meyer notes, drones have much smaller environmental footprints than traditional vehicles.

Whether you’re receiving your pad thai or weekly groceries from a car or a drone, American demand for door-drop dinners is only getting stronger. A recent report from Capgemini found that 40% of shoppers rank delivery services as a must-have for food and groceries, and one in five say they’ll switch stores if delivery services aren’t available. Services like Instacart, Uber Eats, and Amazon Fresh are currently cleaning up in a huge, and growing, market. With the pandemic further heightening this demand, ffood delivery revenue hit $26.5 billion in 2020, an increase of more than 4x over its 2015 total

 

Delivery services cut labor costs

 

The interest in meeting this consumer need with autonomous technology is driven largely by one very big expense: labor. Gómez says, “It’s a huge cost, and we’re facing pressure to increase minimum wage.” Luckily, grocery retailers have already been considering ways to save on the cost of salaries, he says. “Supermarkets are already looking to save on labor—they’re investing gradually in self-checkout, for example.” Gómez says that scarcity is also a factor. “Labor is not only expensive but hard to find, and people rotate out a lot—technology complements the efforts of the industry to rely less on labor.”

 

Of course, for all they may save on payroll, retailers will have significant investments to make in order to get their autonomous programs up and running—or flying. And it’s not yet clear how much of that cost can be reasonably passed on to consumers. Gómez cautions that retailers “have to do cost-benefit analysis very well, to analyze how much their customers are willing to pay for the convenience.” 

 

Sellers will also have to find ways to tackle the logistics of storing and packing goods prior to delivery, of course. Some are turning to streamlined “microfulfillment” centers to handle this, particularly in urban areas where real estate can be costly. New “dark stores” dedicated to online order fulfillment could fulfill autonomous deliveries too. On a larger scale, Amazon has filed patents for drone fulfillment centers in skyscrapers, as well as airborne fulfillment centers permanently installed on floating airships—though for now, the latter option remains pie in the sky.   

 

Driverless delivery

 

So far, Gómez says, the least-expensive way to make quick neighborhood deliveries has been by autonomous vehicles. These are being piloted in several markets, including lockable carts being used by Safeway in partnership with the robotics company Tortoise. They’re operated remotely and have a maximum speed of just 3 mph. Other vehicles, like those being piloted by Kroger, CVS, and Walmart, can travel up to 25 mph and look similar to scaled-down compact cars, though they don’t carry passengers. Developed by the California-based robotics company Nuro, the R2 autonomous vehicle isn’t required to meet traditional regulations for cars and trucks, thanks to a recent ruling. 

 

Of course, autonomous deliveries can face serious potential problems that go far beyond broken eggs and spilled milk. Both drones and driverless vehicles can struggle with stormy weather, and landing or parking can be difficult or impossible in crowded urban environments. That’s why most of the pilot programs have taken place in suburban and rural areas, where there’s ample room to maneuver and drop deliveries.

Home_food_delivery - woman ringing doorbell to deliver crate of food
Home_food_delivery - woman ringing doorbell to deliver crate of food

Whether you’re receiving your pad thai or weekly groceries from a car or a drone, American demand for door-drop dinners is only getting stronger. A recent report from Capgemini found that 40% of shoppers rank delivery services as a must-have for food and groceries, and one in five say they’ll switch stores if delivery services aren’t available. Services like Instacart, Uber Eats, and Amazon Fresh are currently cleaning up in a huge, and growing, market. With the pandemic further heightening this demand, ffood delivery revenue hit $26.5 billion in 2020, an increase of more than 4x over its 2015 total

 

Delivery services cut labor costs

 

The interest in meeting this consumer need with autonomous technology is driven largely by one very big expense: labor. Gómez says, “It’s a huge cost, and we’re facing pressure to increase minimum wage.” Luckily, grocery retailers have already been considering ways to save on the cost of salaries, he says. “Supermarkets are already looking to save on labor—they’re investing gradually in self-checkout, for example.” Gómez says that scarcity is also a factor. “Labor is not only expensive but hard to find, and people rotate out a lot—technology complements the efforts of the industry to rely less on labor.”

 

Of course, for all they may save on payroll, retailers will have significant investments to make in order to get their autonomous programs up and running—or flying. And it’s not yet clear how much of that cost can be reasonably passed on to consumers. Gómez cautions that retailers “have to do cost-benefit analysis very well, to analyze how much their customers are willing to pay for the convenience.” 

 

Sellers will also have to find ways to tackle the logistics of storing and packing goods prior to delivery, of course. Some are turning to streamlined “microfulfillment” centers to handle this, particularly in urban areas where real estate can be costly. New “dark stores” dedicated to online order fulfillment could fulfill autonomous deliveries too. On a larger scale, Amazon has filed patents for drone fulfillment centers in skyscrapers, as well as airborne fulfillment centers permanently installed on floating airships—though for now, the latter option remains pie in the sky.   

 

Driverless delivery

 

So far, Gómez says, the least-expensive way to make quick neighborhood deliveries has been by autonomous vehicles. These are being piloted in several markets, including lockable carts being used by Safeway in partnership with the robotics company Tortoise. They’re operated remotely and have a maximum speed of just 3 mph. Other vehicles, like those being piloted by Kroger, CVS, and Walmart, can travel up to 25 mph and look similar to scaled-down compact cars, though they don’t carry passengers. Developed by the California-based robotics company Nuro, the R2 autonomous vehicle isn’t required to meet traditional regulations for cars and trucks, thanks to a recent ruling. 

 

Of course, autonomous deliveries can face serious potential problems that go far beyond broken eggs and spilled milk. Both drones and driverless vehicles can struggle with stormy weather, and landing or parking can be difficult or impossible in crowded urban environments. That’s why most of the pilot programs have taken place in suburban and rural areas, where there’s ample room to maneuver and drop deliveries.

Asked what kinds of challenges Flytrex faces, Mushkie Meyer points immediately to safety, saying that it’s a central commitment of the company. To that end, Flytrex has partnered with the FAA on a program to inform regulatory guidance and policy related to drones. The safety implications of drone operation in populated areas are serious; in 2019 a delivery drone carrying lab materials crashed near a group of kindergarteners in Switzerland. The drone program, run by U.S.-based Matternet, was temporarily grounded as a result.

 

For most of us, it’s still hard to imagine autonomous deliveries of pizza or perishables. But despite the logistical hurdles, technologists and retailers are hard at work to make them commonplace. For those who imagine a streamlined solution to the “last-mile” problem, things are looking up.

Small vehicle on wheels in front of house delivering crate of food
Small vehicle on wheels in front of house delivering crate of food

Asked what kinds of challenges Flytrex faces, Mushkie Meyer points immediately to safety, saying that it’s a central commitment of the company. To that end, Flytrex has partnered with the FAA on a program to inform regulatory guidance and policy related to drones. The safety implications of drone operation in populated areas are serious; in 2019 a delivery drone carrying lab materials crashed near a group of kindergarteners in Switzerland. The drone program, run by U.S.-based Matternet, was temporarily grounded as a result.

 

For most of us, it’s still hard to imagine autonomous deliveries of pizza or perishables. But despite the logistical hurdles, technologists and retailers are hard at work to make them commonplace. For those who imagine a streamlined solution to the “last-mile” problem, things are looking up.