Launched in 2017, Gatik is focused on B2B short-haul logistics, i.e. the “middle mile” shuttling goods between warehouses and retail outlets. Gatik’s first announced customer was Walmart, with whom they’ve been conducting trials on a two mile route for over a year. “We’ve safely driven more than 70,000 operational miles in autonomous mode with a safety driver” during this trial, said Tom Ward, Walmart’s SVP of Customer Product.
Gatik’s approach to early deployment hinges on operating exclusively on fixed, repeatable routes. In a Medium.com post, Gatik CEO & Co-Founder Gautam Narang explains “It’s an approach we refer to as structured autonomy. It’s safe and efficient because it enables us to constrain the challenge of autonomy, thereby heavily over-optimizing our delivery routes and minimizing edge-cases.”
Also in early 2021, Walmart will expand testing with Gatik to a second location with a different use case and a longer delivery route, initially operating with a safety driver. Gatik trucks will deliver purchases from a Supercenter to a Walmart pickup point where customers can pick up their orders without traveling all the way to the store. Here, trucks will be traveling on a 20-mile route between New Orleans and Metairie, Louisiana.
According to Walmart’s Tom Ward, “This unlocks the opportunity for customers who live further away from our store in New Orleans to benefit from the convenience and ease of Walmart’s pickup service.” Said Ward,“With 90% of Americans living within 10 miles of a Walmart, a closer store isn’t always the answer. Perhaps it’s just a pickup location, with an autonomous vehicle making deliveries on a constant loop. Our trials with Gatik are just two of many use cases we’re testing with autonomous vehicles, and we’re excited to continue learning how we might incorporate them in a delivery ecosystem.”
Last month Gatik announced a similar partnership with Canadian retailer Loblaw. Trials are due to begin next year.
A Modest Effect on Customers
Will this change the lives of Walmart customers in Bentonville? Not in a direct way; whatever they came to buy will still be on a shelf, as usual. They’ll pick it up, probably using an automated cashier to check out and then are on their way. The experience will be somewhat more visceral for customers in Metairie, with a “Hey this is cool!” factor if they happen to see the robo-truck roll in. Otherwise, it’s an upgrade in convenience which Walmart hopes will create more loyalty.
Massive Effects Behind the Scenes
Behind the scenes, however, this is a big deal. The truck driver shortage, an endemic problem for over a decade, just keeps getting worse. If Walmart can transition a large portion of these movements to driverless trucks, both cost and risk go down. Computerized drivers will be safer and probably a little lighter on the gas pedal, saving fuel and reducing emissions.
For any company moving freight, extensive efforts are made to recruit, train, and retain drivers. The driver turnover rate is very high. Some fleets say that, when they do find people willing to drive, the next challenge is getting driver candidates who can pass a cannabis test; this has been exacerbated by marijuana laws having been relaxed in many states. At the Federal level, cannabis is still a controlled substance and fleets have to test for it to comply with regulations.
As driverless trucks gradually scale up over the next decade, their effect will be to decrement the driver shortage, not eliminate jobs.
According to Gatik, ninety percent of retailers are losing money on each delivery. If they can deliver a rock-solid automated driving platform, the business case is a no-brainer.
Momentum is Building
In late 2019, Waymo was the first to go driverless with robotaxi services but in a highly restricted manner. Now they offer their services to anyone wanting a ride in the operations area of Chandler, Arizona. We can expect them to gradually expand their operational locations.
Other driverless vehicles are moving around serving the public or businesses, but they are not automated. Remote drivers are controlling the vehicles from afar. This applies to Nuro and Einride operations, as well as some sidewalk bots. These companies are well aware that they must move to fully automated driving to scale up and deliver a strong business case.
In October 2020, after two million miles of testing, Cruise Automation got a permit from the California DMV to remove human backup drivers from their self-driving cars operating in the highly complex streets of San Francisco. So, another member of Club Driverless. Walmart announced last month they have partnered with Cruise for deliveries in Scottsdale, Arizona starting early next year.
Generally, these robo-taxi and robo-delivery guys, by being a retail service, have to deliver to any address within a given operations area. While still constrained, these operations have significantly less predictability than the Gatik’s B2B “known routes” approach.
Walmart, Loblaw, and others are all are competing fiercely with Amazon AMZN -3.3%, which almost certainly has similar pilots in the works.
Walmart and Gatik worked with Arkansas officials “to inform the development of autonomous vehicle legislation, and share detailed information on all aspects of our operations in the state.” This type of engagement with local officials, absolutely essential, has also been occurring in other states.
Fleet-based automated driving will deploy where the business needs are. Americans are more likely to first experience driverless technology as a Walmart shopper than as a robo-taxi rider. That is, if Walmart launches these services broadly. Driverless trucks shuttling purchases to pickup points are a vital factor in economic feasibility. For the local community, this would also mean less driving and possibly less congestion. How many twenty-mile trips by Walmart customers might shift to short neighborhood runs?
2021 is shaping up to be The Year of Driverless. The naysayers assert that it has taken too long and cost too much. I’m not going to argue this point either way. What matters is return on investment for the legions of investors that have supported companies like Gatik. There have certainly been failures and more are on the horizon. Players like Waymo, Cruise, and Gatik are just now moving from the practice field to the Real Game.