Last mile delivery is the most expensive part of the delivery chain, often representing more than 50% of the overall cost. This is mainly because it is the least productive and automated step. As such, many are seeking to bring automation into the last mile.
In recent years, many companies around the world have been innovating to utilise autonomous mobile robots, drones, and autonomous vehicle technology. In this article, we focus on ground-based autonomous robots.
This report “Mobile Robots, Autonomous Vehicles, and Drones in Logistics, Warehousing, and Delivery 2020-2040” covers the use of mobile robots, drones, and autonomous vehicles in delivery, warehousing, and logistics. It provides a comprehensive analysis of all the key players, technologies, and markets.
It covers automated as well as autonomous carts and robots, automated goods-to-person robots, autonomous and collaborative robots, delivery robots, mobile picking robots, autonomous material handling vehicles such as tuggers and forklifts, autonomous trucks, vans, and last mile delivery robots and drones.
The image below shows various autonomous robots and vehicles (sometimes called pods) developed around the world. These come in a variety of shapes and forms, reflecting the diversity and breadth of design and technology choices which must be made to create such products.
Sidewalk delivery robots vs autonomous delivery vans
These robots, pods, and vehicles are mainly designed from the scratch to be unmanned. They are also almost always battery-powered and electrically-driven. This is for various reasons, including: (1) electronic drive gives better control of motion especially when each wheel can be independently controlled; (2) the interface between the electronic control system and the electrical drive train is simpler, eliminating the need for complex by-wire systems found in autonomous ICE vehicles; and (3) their production process needs to handle vastly fewer parts, and as such could be taken on by smaller manufacturers.
Another key technology and business choice is where to navigate. Many robots are designed to travel on sidewalks and pedestrian pavements, whilst the van-looking pods and vehicles are often designed to be road-going. This choice of where to travel has determining consequences for the design, technology choice, target markets, and business model. In this article, we focus on sidewalk ground robots, leaving the discussion of road-going pods to a follow-on article.
The sidewalk robots are an interesting proposition. They are often designed to travel slowly at 4-6 km/hr. This is to increase safety, to give robots more thinking time, to give remote teleoperators the chance to intervene, and to enable categorising the robot as a personal device (vs. a vehicle), thus easing the legislative challenges.
These robots also come with various hardware choices. For example, some are few-wheeled whilst many are six-wheeled. Some include a single small-payload compartment, whilst others carry larger multi-item storage compartments. The key choice however is in what perception sensors to use.
Navigation technology choices
Almost all have HD cameras around the robot to give teleoperators the ability to intervene (more on this later). All also have IMUs and GPS and most have ultrasound sensors for near-field sensing. The main choice is whether to use lidar-only, stereo-vision-only, or hybrid.
Lidar can give excellent 360deg ranging information. The spatial resolution is also very high, beating even the emerging 4D imaging radar. The point cloud is also fairly dense (depending on the lidar choice), enabling good signal processing. Indeed, in recent years, there have been excellent progress in creating labelled training data and deep learning techniques based on lidar data. Lidars however have two major drawbacks: (a) they are expensive and (b) they can have near-field (a few cm) blindspot.
The first is critical. The current high cost of lidar puts the business model at risk. This is because for the business model to succeed the cost of the robots needs be very low, regardless of whether the model is to offer RaaS delivery service or to sell robot units with some maintenance and support. Therefore, the choice to use lidars will represent a bet for the cost of lidar technology to dramatically fall.
Most robots deploying lidars use 16-channel RoboSense or Velodyne lidars. These are mechanical rotating lidars, giving surround view. The technology of lidars is evolving with the likes of MEMS or OPA emerging. These could enable cost reduction, but will reduce FoV (field of view), thus mandating the use of more lidar units per robot. We project that the cost of lidars is to significantly fall over the coming years. This has the potential to put such robots on the path towards business viability. The other challenge is near-field blindspots. This is not an issue with cars, but can be in a sidewalk, where many low-lying objects can reside closely to the robot. To resolve these, complementary sensors will be needed.
The other approach is to go lidar-free, using stereo camera as the main perception-for-navigation sensor. This will require the development of camera-based algorithms for localization, object detection, classification, semantic segmentation, and path planning.
No off-the-shelf software solution exists. Indeed, no labelled training dataset exists that would allow training lidar-based, camera-based or hybrid deep neutral networks (DNNs) for sidewalk navigation. The sidewalk environment is vastly different to that of the on-road vehicles. As such, companies will need to collect, calibrate, and meticulously label their own datasets. Furthermore, the datasets will require great diversity to accommodate different light, perception, and local conditions. As such, deployments in many sites even as pilot programmes is essential in further improving the robots and can indeed represent a competitive advantage.
The robots are energy constrained. As such, the number of on-board processors and GPUs should be kept to a minimum, and heavy-duty computational tasks such as 3D map-making and edge-extraction should be carried off-line in powerful services. This almost always happens when robots are deployed to a new environment: they are walked around to capture data, the data is sent to servers for processing so it can be converted into a suitable map, earmarking edges, many classes of fixed objects, drivable paths, and so on.
These sidewalk robots are still far from being totally autonomous. First, they are often deployed in environments such as US university campuses where there is little sidewalk traffic and where the sidewalks are well-structured. Many robots are also restricted to daylight and perception-free conditions.
The timeline highlights various key events in the development of the sidewalk delivery business landscape between 2014 and 2019. The chart shows the accumulated fleet size of deployed robots- considering the replacement cycle- between now and 2040. By 2030, the market for hardware and delivery services will have reached one billion dollars. For more information please read “Mobile Robots, Autonomous Vehicles, and Drones in Logistics, Warehousing, and Delivery 2020-2040”.
Critically, the suppliers also have remote teleoperator centres. These remote human operators take over, via the internet, when the robots encounter situations they cannot handle with high confidence. Furthermore, they still operate the road-crossings. This step is very dangerous, and the robots are still not able to always perform this independently. The ratio of operators to robots will need to be kept to an absolute minimum if such businesses, which essentially propose to eliminate wage overheads, are to become viable and sustainable.
Long road to profitability lies ahead
In general, there is still much work to do to improve navigation technology. The robots will need to learn to operate in more complex and varied environments with minimal intervention. This requires extensive investment in software development. This ranges from gathering data, defining object classes, labelling the data, and training the DNNs in many environments and conditions. It also requires writing algorithms for the many challenges the robots encounter in their autonomous operation.
Furthermore, capital is also essential. The businesses are heavy on development costs, especially software costs. The end markets are also highly competitive, imposing tough price constraints. The hardware itself is likely to be commoditized and many will outsource manufacturing once they have settled on a suitable final design. The payback for many will be having a large fleet to offer robots as a delivery service.
Future outlook: significant robot sale and delivery services opportunity
However, even such firms are likely to have a long road ahead of them before they reach profitability. They should improve the robots to work in more scenarios beyond well-structured neighbourhoods and campuses, to extend their operation to all-day and all-weather conditions, and to extend autonomous operation with little error to nearly all scenarios to drive down the remote operator-to-fleet size ratio. The deployed fleet size will need to dramatically increase to expand income from delivery services and allow the amortization of the software development costs over many units sold.
We have analysed all the key companies and technologies in this emerging field. We have also constructed a forecast model, considering how the productivity of last mile mobile robots is likely to evolve over the years. We have developed various scenarios, assessing the current and future addressable market size in terms of total accumulated fleet size. Our fleet deployment forecasts and penetration rate forecasts are based upon on reasonable market and technology assessments and roadmaps.
In general, we forecast a 200k unit fleet size until 2035 (accounting for replacement). The inflection point will not occur until around the 2025 period given the readiness level of the technology. This suggests both a large robot sales market and an even larger annual delivery services market provided asset utilization can be high (the services income could reach $1.6Bn by 2035 in a reasonable scenario).
Consequently, our forecasts suggest, that despite the upfront technology and market challenges, the market will grow and those who plant their seeds today will reap the benefits tomorrow. To learn more about the companies active in this field, the technology challenges, approaches, and roadmap, and detailed 20-year market forecasts please visit www.IDTechEx.com/Mobile.
This report covers the use of mobile robots, drones, and autonomous vehicles in delivery, warehousing, and logistics. It provides a comprehensive analysis of all the key players, technologies, and markets. It covers automated as well as autonomous carts and robots, automated goods-to-person robots, autonomous and collaborative robots, delivery robots, mobile picking robots, autonomous material handling vehicles such as tuggers and forklifts, autonomous trucks, vans, and last mile delivery robots and drones. It provides technology analysis, market analysis and forecasts, and player overviews.
To find out more about Robotics research available from IDTechEx visit www.IDTechEx.com/Research/Robotics or to connect with others on this topic, IDTechEx Events is hosting: Material Opportunities for Electric Vehicles, 13 – 14 May 2020, Estrel Convention Center, Berlin, Germany www.ElectricVehiclesEurope.Tech.
IDTechEx guides your strategic business decisions through its Research, Consultancy and Event products, helping you profit from emerging technologies. For more information on IDTechEx Research and Consultancy contact research@IDTechEx.com or visit www.IDTechEx.com.
The shape of the SME future
What does the future of technology look like for South Africa’s SMEs? COLIN TIMMIS, general country manager of Xero SA and a professional accountant, looks into the tech crystal ball
Over the past decade, technology has radically changed the way businesses operate. Now, even small businesses have access to powerful tools that were previously expensive or complicated.
The pace of change has been rapid – and it’s unlikely to slow down. Businesses must keep up with technology to stay competitive. According to research conducted by Citrix, 92% of companies across South Africa’s key industries agree that digital adoption directly affects company profits. However, 54% still feel unprepared for the future.
So, what does the future of technology look like for South Africa’s small businesses? How can the other 46% of companies prepare?
5G and WiFi 6 – faster internet speed
In the foreseeable future, we will see a rapid increase in the use of fibre across South Africa. According to Xero’s State of Small Business Report produced with World Wide Worx, 49% of small businesses surveyed used ADSL connections and only 37% used fibre. When asked to describe their internet connections, 45% said they were ‘great’, while 43% said they were ‘okay but not 100% reliable’. 57% of those who said their connection was ‘great’ were fibre users.
South Africa is still playing catch-up in terms of internet connectivity and speed. However, WiFi 6 is set to improve the way routers distribute traffic to connected devices and increase the transfer speeds by around 30%. For when you’re on the go, 5G is the next generation of mobile data standard. It’s already being trialed by South African carrier Rain, and a broader rollout is expected in 2020.
Machine learning and Artificial Intelligence – more efficient software
Even if you aren’t aware of it, you’re probably already using smart software which leverages machine learning (ML) and artificial intelligence (AI) in your business. While only a tiny proportion of respondents (0.25%) from Xero’s State of Small Business Report say they are using them, most businesses are aware of how important they are.
AI and ML are great at taking large amounts of data and spotting patterns that humans might miss. They help businesses cover some of the more routine tasks so they are freed-up to focus on the most important priorities. For example, tedious tasks like bank reconciliation, can now be completely automated.
Blockchain – safer, more secure transfers
If you hear ‘blockchain’ and think ‘cryptocurrency,’ you’re not alone. However, the technology also has something to offer when it comes to existing payment technologies. Through its complexity and high level of encryption, integration with blockchain can make transferring valuable assets more secure. It can also be used for more effective fraud prevention and other security-focused tasks.
The cloud – access data everywhere
Cloud computing is starting to become a standard part of life for many small businesses in South Africa today. According to Xero’s State of Small Business report, 19% of respondents surveyed make use of cloud technology. Of these respondents, 98% reported a significant increase in profit thanks to adopting this technology – and 99% identified an increase in efficiency.
The trend towards cloud adoption is likely to continue as we see the development of technologies, like faster speed through fibre, WiFi 6, 5G, and machine learning powering it.
Integrated financial software
When it comes to accounting in a small business, these new technologies will enable much smarter ways of working. Take bank reconciliation, for example, where cloud storage and machine learning will search through documents and expenses on your behalf to compile reports.
Eventually, we will be able to access everything we want in one integrated, seamless hub. We can see this development through the use of app integration. Xero has 800+ apps already compatible, which enables small businesses to automate, gain better insight and grow their businesses all through one ecosystem of partners.
Access to capital
Open banking, the process of banks and financial services opening their APIs to the market, will shape how businesses access funding. By sharing their financial data instantly, potential investors have immediate access to a company’s revenue, profits and cashflow – enabling them to make fast, informed decisions.
Platforms like Xero keep all of a company’s financial data up to date. That way, when the company needs to file for a loan their documents are ready to go. Xero is also continuously pursuing new partnerships to help fuel small business growth. Earlier this year Xero partnered with three new alternative lenders, to help improve access to funding.
Digital adoption offers an island of stability in the volatile South African economy. Technology allows businesses to run more efficiently, remain globally integrated, and maximise their profits. Companies which keep up with the latest technology, from incorporating it into their processes to training staff, will have a real advantage over their competitors.
Cash is here to stay, and other trends shaping payments
As we enter the next decade, local and African merchants should support payment methods that suit their customers, rather than following global trends just for the sake of it. Peter Harvey, MD of payment service provider, DPO SA, looks at five trends we can expect over the next few years.
- Cash is here to stay – for now
Despite common perceptions, South Africa still has more than 11 million unbanked individuals and cash remains the preferred payment method for these and many other customers.
Harvey says: “As we enter 2020, we can expect a host of new digital payment technologies that sound like excellent options – and they may well be for some – but merchants need to carefully monitor their customer behaviour before they rush to try the latest gadget or fad.”
According to Harvey the banks and card companies like Visa and Mastercard will be placing a large focus on enticing consumers to move from cash to card-based payments in the coming years.
“Overcoming the reliance on cash will take a fair amount of time and effort,” says Harvey. “For merchants trading in a cash-based community, depositing money into a bank that tracks your spending, charges you to store your money, and then charges you again to withdraw it can seem unattractive. At the end of the day consumers will make their decision based on convenience, cost and risk.”
Card payments are expected to morph over the coming years. In South Africa the tap and pay method is becoming more commonplace. Harvey believes this and other near field communication (NFC) methods of card payments will continue to grow in use as shoppers become more trusting of the technology and retailers see the efficiency benefits of moving customers through their purchase cycle more quickly and easily.
- Mobile is still king
There is no doubt that the means to facilitate most digital payments in Africa will depend on mobile technology.
According to South African communications regulator, ICASA, South Africa has a smartphone penetration of 80%. In Sub-Saharan Africa meanwhile, the mobile phone penetration is 50% and the GSMA expects smartphone penetration to grow from around 40% to 66% in 2025.
Harvey says smartphone technology and wearable technology will allow for the growth in some of the newer payment tech, like Apple Pay and Samsung Pay, but these payment methods will remain in the hands of the top LSMs and have little effect on the bottom of the pyramid customer base.
“For the moment USSD technology will still underpin the majority of mobile payment methods. Until smartphones increase in penetration, payments like m-Pesa will continue to dominate. Customers know and trust the solution and its these types of offerings that will need to be beaten by any new entrant over the next two to three years at least.”
- New decade, new banks
Harvey is upbeat about the new digital-only bank offerings like Tyme Bank, Bank Zero and Discovery Bank.
“It appears that 20Twenty was two decades too soon,” says Harvey. “The local markets are now finally ready for a new digital offering without the fuss and cost of the traditional offering. These banks stand a good chance of making an impact and making headway towards financial inclusion in the country.”
Harvey believes, that in order to boost the number of people using digital payments, the banking institutions, merchants and payment service providers need to start incentivising consumers to make the switch. Loyalty and Rewards will start playing an even bigger role in the near future.
- New services for the payment ecosystem
Based on demand, Harvey believes forward thinking payment service providers will work closely with their banking partners to focus on providing their mutual merchants with a ‘fully managed service’. This service includes: instant sign-up; a full suite of payment products; risk screening; account reconciliation; anti money laundering checks; access to shopping cart plugins; and a variety of other value-added services in the online digital payment space.
These services will enable digital retailers to quickly and easily start selling their services online, while protecting them from the associated risks.
The service benefits the banks as well as the broader digital ecosystem, as the payment service provider actively monitors and manages merchants and transactions, removing risk from the process and facilitating ‘good’ transactions.
- Identity technology takes centre stage
Looking at newer technologies, Harvey believes biometrics will continue to be the key focus.
Harvey says voice and facial recognition are set to take off in South Africa in 2020 and 2021 and he believes the key driver in this regard is the increasing use by the government.
“Banks and Home Affairs teaming up for the renewal of ID documents and passports is a major win for the average citizen,” Harvey says. “This falls neatly into the ‘convenience’ motivator and as people use and trust the biometrics used by the banks for this service, they will become less afraid to try it for payments.”
As technology rapidly improves, the payments ecosystem can expect some exciting advancements over the coming decade. Chat commerce and even augmented and virtual reality developments will almost all come with payment features. However, Harvey cautions against over exuberance.
Harvey says “Make sure you cater for what your customer actually wants, not what you think they should want. If working closely with African merchants, banks and customers has shown us anything, it’s that the fastest way to drive away business, is to dictate how customers pay. Provide the options and let them choose.”