FedEx is getting into the pizza delivery business, but no one will be greeting hungry customers at the door.
The initiative highlights the surging demand for speedier delivery and the race to develop autonomous technology for what’s known as the “last-mile,” or the final step of the logistics journey from warehouse or kitchen to a customer’s front door.
Experts say merchants and shipping companies will increasingly move toward automation to lower costs and speed up delivery, with fleets of drones and bots eventually dropping off goods without direct assistance from human staff.
FedEx is developing its robot with DEKA Research and Development, whose founder invented the Segway and a powered wheelchair called iBot, the company said in a news release. FedEx’s bot is designed to traverse sidewalks and streets, building on the iBot’s technology, and is equipped with radar, laser-based lidar mapping tools and several cameras.
FedEx said it will test the bot in multiple cities, pending approval, including its home base of Memphis. The robots would complement its existing same-day delivery service, which relies on uniformed employees and operates in 32 markets, the company said.
AutoZone, Lowe’s and Target have also signed on to the program meant to capitalize on the latent appeal of on-demand, local delivery. On average, more than 60 percent of a retailer’s customers live within three miles of a store, according to FedEx.
“The bot represents a milestone in our ongoing mission to solve the complexities and expense of same-day, last-mile delivery for the growing e-commerce market in a manner that is safe and environmentally friendly,” Brie Carere, chief marketing and communications officer at FedEx, said in a statement.
In a video released by FedEx on Tuesday night, the robot resembles a cooler with the undercarriage of a mini all-terrain vehicle. The bot is shown zooming past a neighborhood shop, riding over a street puddle, mounting a curb and doorstep with tiered tires, and cruising on a sidewalk with a steep incline.
According to a 2018 report from Business Insider, the final stage of delivery accounts for more than half the cost of a shipment, owing to traffic congestion, multiple stops, route distances and small delivery sizes. The dramatic increase in e-commerce shipments and the heightened expectations of customers have also compounded the logistical challenges of last-mile delivery, the report said.
The rapid advancement in logistics technology will probably pressure shipping companies like FedEx to protect their incumbent positions and develop new lines of business, according to a July report published by the management consulting firm McKinsey & Co. FedEx competitor UPS is experimenting with drone deliveries, as are tech giants Amazon and Google. (Amazon CEO Jeffrey P. Bezos owns The Washington Post.) FedEx will also have to contend with more established players in the food delivery industry, such as Grubhub, and Uber Eats, which combined command more than half of the market.