Walmart is using fully driverless trucks to ramp up its online grocery business

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  • Walmart and Silicon Valley start-up Gatic said that, since August, they have driven two autonomous box trucks, without a safety driver, on a 7-mile loop for 12 hours a day.
  • “Getting out the driver is the holy grail of this technology.” Gatik CEO Gautam Narang, who founded the company in 2017, told CNBC.

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Walmart on Monday said it has begun using fully driverless trucking in its online grocery business, aimed at increasing efficiencies and reducing inefficiencies.

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Walmart and Silicon Valley start-up Gatic said that, since August, they have operated two autonomous box trucks — without a safety driver — on a daily 7-mile loop for 12 hours. Gatic trucks are loaded with online grocery orders from a Walmart fulfillment center called a “dark store.” The order is then moved to a nearby Walmart Neighborhood Market grocery store in Bentonville, Arkansas, where Walmart is headquartered.

The program began in December 2020 after receiving approval from the Arkansas State Highway Commission. The security driver was pulled over over the summer. The partnership focuses on the so-called middle mile – the transport of goods within the supply chain most often from a warehouse to a fulfillment center or from a warehouse to a retailer.

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“We are thrilled to be working with Gatick to achieve this industry-first, driverless milestone,” Walmart Senior Vice President Tom Ward said in a news release regarding the project. “Through our work with Gatik, we have found that autonomous box trucks provide an efficient, safe and sustainable solution for transporting goods on repeatable routes between our stores.”

“Getting out the driver is the holy grail of this technology.” Gatik CEO Gautam Narang, who founded the company in 2017, told CNBC. “Having trust from the world’s largest retailer is a massive boost to what we do and it’s a recognition for our technology, our solutions, our progress.”

Walmart, the nation’s largest seller of groceries, is testing Gatican autonomous vehicles as part of its transition to a “hub and spoke” model for grocery delivery, where blind stores are closer to the consumer and multiple retail stores. are used for the service. Walmart said the use of automated vehicles would give store associates more freedom to take and pack orders online and perform “high-level” tasks, including customer support.

“The old architecture of delivery where you have a huge distribution center four or five hours away from the end consumer, doesn’t work anymore. Grocers are forced to set up these fulfillment centers closer to the customer, and Once you get closer to the customer, you have to downsize your warehouse,” Narang said. “As the size shrinks, the need for frequent trips from fulfillment centers to pick-up points increases. That’s where we come in.”

kroger supermarket chain have tested Autonomous delivery with start-up Nuro since 2018 and said it has now completed thousands of “last mile” deliveries in the Houston, Texas area. Kroger is also using automated warehouses to launch online grocery delivery in Florida and other states where it doesn’t have brick-and-mortar locations.

Albertsons, which operates supermarkets including Safeway and Kings, is testing “Last Mile” delivery with start-up Turtle in Northern California. Remote-controlled turtle carts are loaded with groceries by store employees. The carts are then operated remotely by tortoiseshell “drivers” who use an Xbox controller to navigate the customer’s home.

Gatik said its autonomous vehicles could also reduce logistics costs for the grocery business by up to 30%. Grocery usually has a nominal margin of 2% to 4%, According to research by Bain & Co..

Walmart and Gatick are running similar tests in the New Orleans-area, using an electric box truck with a security driver to move online grocery orders from a Walmart Supercenter to a customer pickup location.

Narang said AVs can help companies mitigate the impact of the country’s labor shortage on supply chains outside the grocery business.

“This solution is very relevant for different supply chains, different types of logistics,” Narang said. “It’s not just about labor shortage. It’s about increasing efficiency, helping with operating costs.”

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