The coronavirus pandemic has created a shift in consumer behaviour that is likely here to stay for the foreseeable future. As consumers increasingly continue to refrain from brick-and-mortar retailers amid the pandemic, Loblaws has revealed it will roll out the first autonomous delivery service in Canada in order to meet the anticipated demand increases for online shopping.
Loblaw Companies Ltd has announced it plans to introduce consumers to the first autonomous commercial delivery service in Canada come January, as the large retailer looks for new ways to meet the rising demand for online shopping. The new service will be comprised of five Ford Transit 350 box trucks, that will be outfitted with California software startup company Gatik AI’s self-driving system. The delivery trucks will be subject to five fixed routes throughout the Toronto area, and will operate 12 hours each day, 7 days per week.
The fleet will transport goods from Loblaw’s automated picking facility to various retail locations via contactless delivery. However, there will be a safety driver present in all of Loblaw’s self-driving trucks as per Canadian regulations. Although autonomous delivery vehicles only make up a small portion of delivery services in the US and Canada, they have the potential to become a significantly disruptive technology. According to a McKinsey & Co report later cited by Bloomberg, if logistics companies were to make the switch to an entirely autonomous fleet, they could reduce their operating costs by nearly 45%.
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Loblaw has noted earlier that e-commerce sales rose by 175% in the third quarter, as many consumers opted for online shopping amid fears of rising coronavirus cases. The increase in demand for online consumerism puts Loblaw in a favourable position given its ambitious plans for an all-autonomous delivery services future, and will coincide with other similar shifts in the industry, such as all-electric versions of commercial vans, which Ford has already begun manufacturing.
Information for this briefing was found via Loblaw and Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
