Loblaw testing self-driving grocery vehicles in bid to conquer `middle mile'

Loblaw Cos. Ltd. has partnered with a Silicon Valley tech firm to deploy Canada's first autonomous delivery fleet for groceries.

While drone vehicles won't soon be delivering bread and milk door to door, the multi-year partnership with Gatik will transport groceries across the “middle mile” between a Loblaw's picking facility and retail locations across the Greater Toronto Area.

“As more Canadians turn to online grocery shopping, we've looked at ways to make our supply chain more efficient,” said Lauren Steinberg, senior vice-president of Loblaw Digital. “With this initial rollout in Toronto, we are able to move goods … multiple times a day to keep pace with PC Express online grocery orders.”

The coronavirus pandemic has accelerated the shift to online shopping, benefiting companies such as Shopify Inc. and Amazon. com Inc. For the three months through the end of August, retail e-commerce sales in Canada alone were up 69.3 per cent from the corresponding period a year earlier, according to a report by retail consultant Ed Strapagiel.

Stores have raced to meet customer demand but not all have been able to do so profitably. For large players, the supply chain often involves complicated logistics between warehouses and widely scattered outlets.

“Retailers know the biggest inefficiencies in their logistics operations often exist in the middle-mile,” before the final leg that brings goods to customers, said Gautam Narang, chief executive and co-founder of Gatik. He said the pandemic has only served to amplify supply chain challenges.

“The middle mile is the most underserved and costly segment of the supply chain, and ensuring its efficiency has become absolutely critical for retailers who want to keep up with demanding consumer behaviour,” he said.

The Palo Alto, Calif.-based firm has already run a 10-month on-road pilot in Toronto with a single autonomous delivery vehicle. Beginning in January, five autonomous trucks fitted with refrigeration units will be rolled out, operating up to 12 hours a day across five routes on public roads. All vehicles will also carry a driver as “co-pilot” for safety, according to the companies.

Gatik operates a fleet of light and medium-duty trucks and focuses on short-haul business to business logistics for retail clients including Walmart.