As the buzz around driverless vehicles continues to snowball, various industries are leveraging the concept to upgrade their business and boost growth. In such an environment, driverless delivery — an unheralded offshoot of the vast autonomous vehicle market — is gaining momentum.
The rationale behind the fast adoption of driverless delivery vehicles by businesses is mainly cost saving. With no delivery personnel, companies can save substantial amount of expenses. Moreover, the size and type of the vehicle can be chosen to suit the size of the shipment. For instance, a lightweight shipment can be delivered via drones, whereas robots or delivery cars or trucks can be chosen for larger parcels or goods.
Driverless deliveries, even though not so widely heard of, have been quietly doing the rounds for almost three years now.
October 2016 witnessed the first shipment delivery by a self-driven truck. Uber UBER owned Otto operated the truck, which successfully drove a 190 km distance without any disengagement or issues, delivering 50,000 cans of beer. Further, in August last year, self-driving startup — AutoX — released autonomous delivery vehicles for consumers in San Jose.
Recently, companies have been rushing ahead to grab a piece of the pie. A few days ago, in an attempt to reduce delivery time, online food platform Zomato successfully tested its first food delivering drone, flying 5 km with a 5 kg load.
Benefits of Driverless Delivery
Interestingly, driverless deliveries are already serving customers while we still have a few years to go before driverless cars can ferry passengers with zero disengagement (rate at which human intervention is required in an autonomous car).
Running a driverless delivery vehicle involves significantly less concerns than running a driverless car with passengers in it.
For one, the mass of a driverless delivery vehicle is much smaller and lighter compared to a passenger car. Therefore, if it meets an accident, chances of physical damage to a human are much less.
A driverless vehicle can choose its time of delivery, take its time to slow down and process any difficult road scenarios, and even call and wait for human intervention before proceeding. These privileges are expected not to be tolerated by a passenger.
Top Players of the Driverless Delivery Game
Per Modor Intelligence, the autonomous delivery robot market is expected to witness a CAGR of more than 49.5% between 2019 and 2024.
Moreover, Visiongain expects global autonomous trucks market to reach $4.19 billion in 2019.
Such positive outlook spells good news for certain companies, which are already upping the ante in this area.
Year-To-Date Price Performance
Amazon’s AMZN much awaited drone-based delivery system, Amazon Prime Air, is expected to start service soon. The move is expected to provide this Zacks Rank #3 (Hold) stock competitive edge over the likes of Walmart WMT, which has been gradually building up its e-commerce muscle.
Walmart, a Zacks Rank #2 (Buy) stock, has raised its game in recent times. The company announced that it will deploy delivery robo-vans by Ford, which will travel on fixed routes from warehouse to a smaller pickup point, transporting packages to get them closer, but not all the way, to consumers, thus acting as middle-miles. This is expected to cut delivery costs and time.
Retail giant, The Kroger KR, has also been steadily carving a niche in this space. In June last year, this Zacks Rank #3 company struck a deal with Nuro — the maker of driverless road vehicle — to deliver groceries at customers’ door step using autonomous vehicles, and has been piloting the service since August 2018.
On Jun 12 this year, Uber announced that it will partner Volvo to build autonomous vehicles to deliver food from restaurants. This announcement places the Zacks Rank #3 stock in a position of benefit in the driverless delivery space.
Earlier this month, Domino’s Pizza DPZ announced that it is starting a driverless pizza delivery services in partnership with Nuro, in Houston, TX, making competition in this space more intense. Domino’s currently has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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