Dive Brief:
- Gatik has opened an autonomous trucking facility in Fort Worth, Texas, to make middle-mile deliveries for multiple Fortune 500 businesses, the company said in a news release Tuesday.
- Gatik is deploying its 20-foot and 26-foot multi-temperature box trucks in the state in response to heightened e-commerce demand. The facility will serve as Gatik's state hub and reduce supply chain costs and middle-mile delivery times for Texas customers, the company said.
- Texas is the fourth North American market in which Gatik has deployed its autonomous box trucks for retail customer deliveries. The company has also provided its services to Walmart in Arkansas and Louisiana and Loblaw Companies in Ontario, Canada. It didn't disclose the businesses serviced by its Texas hub.
Dive Insight:
Automating transport is one way companies are looking to trim supply chain costs, primarily through reduced labor use. The pathway for middle-mile autonomous truck adoption is easier than in the last mile, as its routes are far more consistent. Fixed, predictable movements are well-suited for autonomous trucks, Michael Molitor, Great Dane executive director of business development, said in an article on the transportation company's website.
"Eliminating the driver provides carriers the ability to … reallocate scarce driver resources to the last mile, which is where drivers are needed to deliver the goods and operate the truck, given urban environments are a higher risk due to the density of people and objects," Molitor said.
Gatik's fleet moves goods on short-haul routes from micro-fulfillment centers and "dark stores" — stores geared exclusively for online shopping — to pickup points at brick-and-mortar retail stores and distribution centers, according to its website.
One way Walmart is using Gatik's trucks is for a 20-mile route between a Supercenter in New Orleans and a designated customer pickup point in Metairie, Louisiana. This operation expands Walmart's customer reach in the New Orleans area, Tom Ward, senior vice president of last mile for Walmart U.S., said in an article on the company's website.
"With 90% of Americans living within 10 miles of a Walmart, a closer store isn't always the answer," Ward said. "Perhaps it's just a pickup location, with an autonomous vehicle making deliveries on a constant loop."
Rising logistics costs, unreliable service levels and a driver shortage "have spurred overwhelming demand" for Gatik's technology as the e-commerce boom ramps up the pressure on fleets to deliver, said Gautam Narang, Gatik CEO and co-founder, in a statement.
With demand for automated middle-mile transport rising, Gatik's expansion won't stop with its new Texas facility. The company also announced Tuesday it would use $85 million raised in a Series B funding round to scale and deploy its box truck fleet to additional North American markets.
"Our long-term partnerships with the world's largest retailers, strategic relationships with OEMs and fleet servicing & maintenance partners have allowed us to address critical supply chain challenges and build an industry-defining business," Narang said. "With this financing, we are ideally positioned to commercialize our solution at scale."
