FedEx partners with Walmart, Pizza Hut to test last-mile delivery robot

[February 27, 2019]   By Lisa Baertlein

(Reuters) - FedEx Corp this summer plans to begin testing a robot to handle home deliveries for partners ranging from Walmart Inc to Pizza Hut.

Shippers, retailers and restaurants are experimenting with robots, drones and self-driving cars in a bid to use automation to drive down the high cost of delivering gadgets, groceries and even cups of coffee the "last mile" to consumer doorsteps.

FedEx is teaming up with DEKA Development & Research Corp, whose founder Dean Kamen invented the Segway stand-up scooter and iBot stair-climbing wheelchair, for its project. The delivery company said the robots could become part of its SameDay service that operates in 1,900 cities around the world.

The battery-powered robots look like coolers on wheels. Cameras and software help them detect and avoid obstacles as they roam sidewalks and roadways at a top speed of 10 miles (16 km) per hour.

The project must win approval in test cities, including the shipper's hometown of Memphis, and the first deliveries will be between FedEx office stores.

On average, more than 60 percent of merchants' customers live within three miles of a store location. FedEx said it is working with its partners, which also include AutoZone Inc and Target Corp, to determine if autonomous delivery to them is a viable option for fast, cheap deliveries.

The "last mile" to the home accounts for 50 percent or more of total package delivery costs. Restaurants pay third-party delivery companies like Uber Eats, DoorDash and GrubHub commissions of 10-30 percent per order.

Investors and companies are pouring millions of dollars into projects aimed at lowering those costs and overcoming regulatory hurdles. For safety reasons, many states want autonomous vehicles to have humans as emergency backup drivers.

A FedEx SameDay bot, which will be tested this summer by FedEx and partners such as Pizza Hut, Target and Walmart for same-day delivery in some cities including Memphis, Tennesse, U.S., is shown in this handout photo provided February 26, 2019. Courtesy FedEx/Handout via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY NO RESALES, NO ARCHIVE

Starship Technologies, which has raised more than $40 million in venture funding, last year deployed robots to deliver packages in the San Francisco Bay Area.

In January, it teamed up with French food service company Sodexo to take Starbucks, Dunkin' Donuts and Blaze Pizza orders to the 40,000 students at George Mason University's Fairfax, Virginia, campus. That service costs $1.99 per order.

Amazon.com is testing its own delivery robot dubbed "Scout".

FedEx rival United Parcel Service Inc is not testing robots - but like FedEx and Amazon, it is experimenting with drone deliveries.

Other tests include tie-ups between grocery seller Kroger Co and self-driving car startup Nuro, as well as DoorDash and General Motors Co's Cruise Automation.

(Reporting by Lisa Baertlein in Los Angeles; Editing by Sonya Hepinstall)

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