Nuro, an autonomous delivery vehicle (ADV) startup, has formed a multi-year and multi-phased partnership with FedEx to test Nuro’s “R2” ADVs for parcel delivery.  The two companies have already started pilot operations in Houston, Texas, with plans to scale operations in the future. 

Nuro’s ADVs will be used within FedEx’s network to initially focus on handling inefficient tasks such as late-night pickups in distant locations. This marks FedEx’s second engagement with the last mile delivery (LMD) automation, the first being its “Roxo” in-house sidewalk delivery droid that has been in development since 2019. 

Analyst QuickTake: Nuro is considered a pioneer in the LMD automation space with over USD 1.5 billion in funding and the first commercial deployment permit for its autonomous units. The partnership with FedEx marks Nuro’s entry into the parcel logistics business and the multi-year commitment from FedEx seems to solidify its leadership position further. From FedEx’s side, we think Nuro’s partnership is likely to complement Roxo's autonomous delivery operations, given sidewalk droids cover short distances and carry small payloads (compared with Nuro’s ADVs using public roads, covering further distances and carrying heavier payloads). Separately, FedEx’s competitor United Parcel Services (UPS), largely focuses on drone-based deliveries instead (via its “UPS Flight Forward” program).