Walmart is using fully driverless trucks to ramp up its online grocery business.

  • Walmart has partnered with a Silicon Valley start-up. Gatik claims that they've been running two autonomous box trucks on a 7-mile loop without a safety driver for 12 hours every day since August.
  • "Taking the driver out is the technology's holy grail." Gautam Narang, the CEO of Gatik, lwho founded the company in 2017.

Walmart announced on Monday that it has begun utilising completely autonomous transportation in its online grocery business, with the goal of increasing capacity and lowering inefficiencies.

Walmart has partnered with a Silicon Valley start-up. Since August, Gatik said, they've run two autonomous box trucks on a 7-mile loop every day for 12 hours without a safety driver. The Gatik trucks are loaded with online grocery orders from Walmart's "dark store" fulfilment centre. The orders are subsequently delivered to a Walmart Neighborhood Market grocery shop near Walmart's headquarters in Bentonville, Arkansas.

After receiving clearance from the Arkansas State Highway Commission, the programme commenced in December 2020. During the summer, the safety driver was detained. The cooperation will concentrate on the so-called middle mile – the transportation of goods within the supply chain, most commonly from a warehouse to a fulfilment centre or from a warehouse to a retailer.

Walmart senior vice president Tom Ward said in a statement regarding the project, "We're excited to be partnering with Gatik to achieve this industry-first, autonomous milestone."

"Through our collaboration with Gatik, we've discovered that autonomous box trucks provide an efficient, safe, and long-term solution for carrying items between our locations on predictable routes."

"Taking the driver out is the technology's holy grail." Gautam Narang, the CEO of Gatik, who started the company in 2017, told CNBC. "Having the trust of the world's largest retailer has given us a huge lift and validated our technology, solution, and progress."

Walmart, the country's largest grocery retailer, is putting the Gatik driverless cars to the test as part of its move to a "hub and spoke" model for grocery delivery, in which dark stores are located closer to customers and serve several retail stores. The usage of driverless cars, according to Walmart, will provide shop associates greater freedom to undertake "higher level" duties like picking and packing online purchases and providing customer service.

"The old delivery architecture, where you have a massive distribution centre four or five hours distant from the end user, no longer works." Grocers are being compelled to build these fulfilment facilities closer to the customer, and if you get closer to the customer, you have to shrink your warehouse," Narang explained. "As the size of the company reduces, there is a greater requirement to make many trips from fulfilment facilities to pickup sites. This is where we step in."

Since 2018, Kroger has been testing autonomous delivery with start-up Nuro and claims to have performed thousands of "last mile" deliveries in the Houston area. Kroger is also utilising automated warehouses to begin online grocery delivery in Florida and other places where the company does not have a physical presence.

Albertsons, which operates Safeway and Kings supermarkets, is collaborating with Tortoise, a start-up in Northern California, to explore "last mile" deliveries.

Employees at the store load the Tortoise carts with groceries using remote controls. The carts are then driven to the customer's house by Tortoise "drivers" who use an Xbox controller to navigate.

Gatik claims that its self-driving cars can cut a grocery store's logistical costs by up to 30%. According to Bain and Company study, grocery stores often have low margins ranging from 2% to 4%.

In the New Orleans area, Walmart and Gatik are testing an electric box truck with a safety driver to transport online grocery orders from a Walmart Supercenter to a client pickup site.

Outside of the supermarket industry, the AVs, according to Narang, can assist companies reduce the impact of the nation's labour shortfall on supply chains.

“This solution is very applicable across many supply chains and logistics,” Narang said. "The labour deficit isn't the only issue. It's all about boosting efficiency and lowering operating costs."