Dive Brief:

• Autonomous vehicle company Gatik will provide contactless delivery of multi-temperature goods in a new partnership with Canada's largest food retailer, Loblaw, the company announced in a press release Monday. 
• Gatik will commence transportation of Loblaw’s goods from its automated picking facility to retail stores in January 2021, initially serving the Greater Toronto Area. The multi-year partnership is the first of its kind for autonomous delivery in Canada, while Gatik already works with several retail partners in North America.  
• The announcement comes as the 10-month pilot of Gatik’s autonomous fleet of upfitted Ford Transit 350 box trucks successfully concludes, and as the company announces $25 million in Series A funding. The five Gatik vehicles carrying Loblaw goods will all contain refrigeration units and lift gates, as well as a safety driver, and will operate up to 7 days a week and 12 hours per day. 

Dive Insight:

In the autonomous grocery delivery space, the focus has tended to be on the last-mile stage, rather than Loblaw’s approach of innovating in the middle-mile. In addition to improving notoriously costly logistics costs, last-mile driverless vehicles can minimize the risk of COVID-19 transmission to customers and potentially reach underserved neighborhoods cost-effectively.

Middle-mile autonomous delivery, meanwhile, promises lower logistics costs and could scale faster then last-mile vehicles given the set routes they run between facilities, which factor out many of the variable conditions that challenge driverless technology. Palo Alto, California-based Gatik has made a name for itself in B2B autonomous transportation since its founding in 2017, and currently works with Walmart, among other retailers. It has also promised to address bottleneck issues by predetermining fixed routes and enabling inventory pooling across retail locations. 

Lauren Steinberg, senior vice president of Loblaw Digital, said the Gatik partnership’s Toronto rollout will enable the Canadian grocery retailer to “move goods from our automated picking facility multiple times a day to keep pace with PC Express online grocery orders in stores around the city." 

How easy it will be for Gatik to expand its Toronto operations to the rest of Canada is still an unanswered question, however. The province of Ontario, where Toronto is located, has a particularly advantageous and "progressive" regulatory environment regarding autonomous vehicles, according to Gautam Narang, CEO and co-founder of Gatik, FreightWaves reported.

Although the surge in demand for e-commerce has sped up grocers’ efforts to partner with and commence delivery operations with driverless vehicle companies like Starship Technologies and Nuro, substantial red tape and upfront costs still create barriers. As evidenced by Gatik’s multi million-dollar funding round, autonomous delivery providers can attract investors, but the technology still remains difficult to scale and reliant on supportive policymakers.