Last-mile delivery (LMD) covers the process of transporting products from a distribution center—usually a retail store or warehouse—to the end consumer. This process has become increasingly automated due to the introduction of robots and autonomous vehicles into the supply chain, allowing companies to distribute goods with reduced labor and costs while improving efficiency.
Developments in autonomous delivery have brought these once-futuristic methods much closer to becoming a commercial reality. Today, droid makers largely commercialize their tech targeting food deliveries. Autonomous delivery vehicle (ADV) developers target grocery and heavier parcel deliveries, while drones are mostly trialed for time-critical cargo deliveries.
The demand for autonomous delivery methods can be attributed to several factors, most notably the significant cost savings that they offer to retailers, logistics, ecommerce, and delivery companies. With the ability to reduce labor and transportation costs, these cutting-edge technologies have quickly become go-to solutions for organizations seeking to optimize their bottom line. Furthermore, consumers' expectations of faster delivery also play a significant role in pushing last-mile delivery automation forward.
There are two general categories of companies that are adopting automated LMD services: those that partner with startups and those that develop the technology internally. Because most companies are logistics companies and not technology companies, most of those that have chosen to develop the product themselves have outsourced the majority of the process to third parties.
There are two main options for offering an automated LMD service for incumbent players in the logistics and delivery space: partner with startups emerging in the space, or develop the technology internally.
Many companies that have chosen to develop their products internally have needed to outsource the majority of the process to third parties, as they are primarily logistics companies or non-tech enterprises and therefore lack the required skills and expertise. For instance, Amazon acquired the autonomous droid company Dispatch to support its droid development and also outsourced US drone development to third-party suppliers, Fedex used DEKA Development & Research Corporation to develop its delivery droid, and Yum! Brands acquired Dragontail Systems to develop their own drone-based delivery solutions.