Autonomous Last Mile Delivery Market

The Autonomous Last Mile Delivery Market is valued at USD 0.9 Billion in 2023 and is projected to reach USD 4.2 Billion by 2030, at a CAGR of 22.7%. The last mile, typically the final leg of the delivery process, is often the most complex and costly, requiring careful coordination and efficient execution to ensure timely and satisfactory deliveries. However, advancements in autonomous technologies have opened up a world of possibilities, offering a potential solution to these challenges. The emergence of autonomous last mile delivery systems has brought about a paradigm shift in the way goods are transported from distribution centers to consumers' doorsteps. These cutting-edge systems employ a range of technologies, including robotics, artificial intelligence, and advanced sensors, to enable self-driving vehicles, drones, and even humanoid robots to handle the last mile delivery process independently. By removing the need for human intervention, autonomous last mile delivery holds the promise of increased efficiency, cost-effectiveness, and improved customer experiences.

The use of sense and avoid systems in aerial delivery drones is continuously increasing due to enhanced safety and beyond visual line of sight features offered by them. These sense and avoidance systems use a combination of cameras, radar, LiDAR, and other systems to detect and avoid obstacles successfully. Sense and avoid systems are of cooperative and non-cooperative types. As a part of cooperative type sense and avoid systems, drones may utilize systems formerly intended for manned aviation, for instance, TCAS (traffic collision and avoidance systems) or ADS-B (automatic dependent surveillance-broadcast), which occasionally broadcast and receive, identity, position, as well as offer information. This solution is dependable on the function of all aircraft within the airspace and does not look after non-aviation obstacles. Non-co-operative sensors for sense and avoid solutions can be segmented into two groups – active and passive.

Active sensors such as radar, ultrasound, and LiDAR radiate a signal that is then reflected by an obstacle and detected again by the sensor. Passive sensors detect a signal given off by the object itself and comprise visual and infrared cameras. Non-cooperative sensors do not depend on a data link with another system to obtain information. The sense and avoid system is one of the major enabler technologies for beyond the visual line of sight (BVLOS) usage of drones and is essential for the extensive adoption of drones for parcel delivery. It is considered the biggest prospect in the overall UAV and drone market.

Autonomous Last Mile Delivery Market Forecast to 2030

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Autonomous Last Mile Delivery Market Dynamics

Driver-Aerial segment: Rapid growth and expansion of the e-commerce industry

Last-mile distribution is an extremely complicated industry vastly dependent on the local environment. City infrastructure differs from the crowded streets of Mumbai against the less thickly populated stretch of Munich to the sprawl of Los Angeles. Local regulations, the accessibility and cost of labor, traffic intensity, shopping behavior, and so o, all rely on where companies need to get their customers and ensure that deliveries are met on time without losses and in a cost-efficient approach. Like several allied industries, the last mile sector is undergoing a massive revolution propelled by rising customer requirements aided by technological progress. The growing demand for fast delivery of packages by consumers has led to the increased adoption of aerial delivery drones in the global e-commerce industry. While same-day deliveries are at 5% penetration in Europe currently, they are at 10% in China and are estimated to be 15% in the US by 2025. E-commerce has been a major driver for this accomplishment. In particular, the B2C market has grown higher than the B2B market. Key drivers for this development are urbanization and the growing purchasing power of the global middle class, along with an ever-expanding product range that is accessible online.

Corporations such as Uber and Deliv are investors in the same-day delivery market. Aerial delivery drones facilitate the quick delivery of products for retail and e-commerce companies. To enable the fast delivery of products, retailers are trying to lower their delivery lead times and enhance the flexibility and speed of deliveries by maintaining Stock-keeping Units (SKUs) assisted by drones. Aerial delivery drones are expected to help increase the delivery speed of products in crowded megacities. In addition, drone deliveries are also environmentally friendly (low carbon footprint and less energy consumption), which has led to a rise in the adoption of aerial delivery drones across the globe.

Driver-Ground Segment: Increased adoption of autonomous ground delivery vehicles due to advanced technological features

Ground delivery vehicles comprise advanced electronics to ensure their safe, reliable, and efficient operation. Several technological advancements are taking place in ground delivery vehicles in terms of improved power sources and data gathering and processing technologies. Lithium-ion batteries are predominantly used in ground delivery vehicles. However, hydrogen fuel cell batteries are expected to be used in autonomous ground vehicles in the future due to their excellent endurance and low weight. Moreover, manufacturers of ground delivery vehicles are also making efforts to incorporate sense and avoidance systems in their vehicles. Furthermore, technological advancements like sensor technology, AI, 5G technology, and several others are evolving the design and operations of ground delivery vehicles. Some instances are discussed below:

• For instance, 5G networks could pace up the transfer of large volumes of data and responsiveness of devices associated with the IoT network, along with the usage and processing of real-time data and data exchange with GPS or devices with built-in cameras (for instance, autonomous ground vehicles, i.e., AGVs).
• As technologies and AI algorithms have been developing, costs have decreased. While LiDAR units used to cost USD 85,000 until a few years back, the current price has decreased to well under USD 10,000. As that trend persists, the return on investment is growing, particularly for retailers such as grocers, where uninterrupted and repetitive deliveries could help them accomplish economies of scale on their investments.
• With the utilization of natural language processing, AI, and cloud computer networking, AGVs can boost the speed and efficiency of last-mile deliveries.

Thus, technological advancements in the field of ground delivery vehicles are expected to fuel the growth of the ground delivery vehicle market during the forecast period.

Restraints-Aerial Segment: Lack of required infrastructure to support operations of aerial delivery drones in emerging economies.

Autonomous mobility requires some basic infrastructure. Aerial delivery drones are expected to witness limited adoption in emerging economies due to the lack of adequate infrastructures, such as ground control stations and mobile towers outside urban areas, and cost considerations involved in their establishment. Moreover, the non-availability of required architecture in emerging economies such as India could make it difficult to have platforms to ensure smooth operations of aerial delivery drones.

Restraints-Ground Segment: Formulation and stringent implementation of regulations pertaining to operations of ground delivery vehicles.

Ground delivery vehicles must operate under a legal, regulatory framework to avoid accidents and traffic congestion. Most Western legal authorities hold manufacturers of these vehicles responsible for the tort of negligence if they cause any damage or injury to users or nearby humans. In 2021, concerned authorities in San Francisco passed some of the most restrictive regulatory laws for the use of ground delivery vehicles in the US. These laws were a result of people complaining about ground delivery vehicles crowding sidewalks and making transit difficult for pedestrians. Till March 2018, no startup in the country had secured permits for road testing of these vehicles. China is formulating new guidelines regarding the operation of unmanned vehicles on the streets. If heavily loaded (load capacity is up to 300 kilograms), these vehicles can crash, causing injuries to pedestrians and damage to public property. Hence, the US is planning to reduce the load-carrying capacity of ground delivery vehicles for their safe operation. Thus, the formulation and stringent implementation of various legal regulations acts as a restraint for the growth of ground delivery vehicles.

Opportunity-Aerial segment: Rise in technological advancements in delivery drones

Aerial delivery drones can be used to carry small items from one place to another at low costs. These drones can also make the supply chain smooth and cost-effective. The management of warehouses using aerial delivery drones and infrastructure solutions is viable as these drones presently can operate within a 5- to 10-mile radius only. However, with ongoing technological advancements such as wireless charging, IoT, 5G, AI, and machine learning (ML), aerial delivery drones are expected to be able to fly long distances and identify their location even in areas with limited GPS signals, as well carry out seamless and safe delivery of products. The integration of Unmanned Traffic Management (UTM) with drone logistics is expected to create growth opportunities for companies providing UTM solutions. In 2020, DHL (Germany) introduced a fully automated and intelligent smart drone delivery solution to deal with the last mile delivery challenges in metropolitan areas of China. DHL declared that the service lowered the delivery time from 40 to 8 minutes for an 8 km expanse and recovered expenses of up to 80% per delivery, with diminished energy consumption and carbon footprint compared to road transportation.

Opportunity-Ground Segment: Growing demand for AGVs in the delivery of healthcare supplies

The healthcare industry is experiencing a growing demand for Autonomous Guided Vehicles (AGVs) in the delivery of healthcare supplies. AGVs are designed to navigate through healthcare environments with precision and accuracy, ensuring timely and error-free delivery of critical supplies such as medications, lab specimens, and equipment. These vehicles are equipped with advanced sensors and mapping technology, enabling them to autonomously navigate complex hospital layouts, avoiding obstacles and following predefined routes. AGVs streamline the supply chain process in healthcare facilities by automating the delivery of supplies. These vehicles can efficiently transport items between different departments, eliminating the need for manual handling and reducing the time spent on logistics. By automating routine delivery tasks, healthcare staff can focus on providing patient care and other essential responsibilities. Healthcare facilities have specific requirements for supply delivery, such as maintaining controlled temperatures for medications or handling fragile medical devices. AGVs can be customized and equipped with specialized compartments or climate control systems to meet these unique needs. This adaptability ensures the safe and reliable transportation of sensitive healthcare supplies.

Challenge-Aerial Segment:Issues related to traffic management of aerial delivery drones

According to the Air Traffic Control Association (ATCA) of the US, the use of aerial delivery drones in civil airspace is one of the major challenges faced by the aviation industry of the country. Presently, aerial delivery drones are prohibited from flying in civil airspace except for certain companies that have received exemptions to conduct tests or demonstration flights. Another major concern is the secure and effective amalgamation of aerial delivery drones with existing air traffic systems. Presently, aerial delivery drones work under closed roofs.

However, in the coming years, aerial delivery drones developed to carry out different types of operations are expected to evolve in terms of increased inventory levels, enhanced characteristics, and better performance levels. These drones are likely to impact air traffic operations across the globe. Thus, appropriate analysis of the impact of allowing aerial delivery drones to fly in civilian airspace is expected to lead to the allocation of restricted airspace for aerial delivery drones used in civil & commercial applications. One such effort was made by NASA. NASA’s Ames Research Center (project duration April 2015-May, 2021) in California’s Silicon Valley set out to build a research platform that would assist in managing large numbers of drones flying at low altitudes alongside other airspace operators. Recognized as UAS Traffic Management, or UTM, the goal was to create a system that can incorporate drones safely and effectively into air traffic that has already been flying in low-altitude airspace. That way, package delivery and fun flights would not disturb helicopters, airplanes, and nearby airports, as well as safety drones being flown by first responders seeking to save lives.

Challenge-Ground Segment: Limited operational range of ground delivery vehicles

Ground delivery vehicles are preferred over aerial delivery drones due to fewer restrictions and regulations related to their operation than aerial delivery drones. Though the use of ground delivery vehicles is more advantageous than that of aerial delivery drones, several operational and technical drawbacks limit their operation. One such technical disadvantage is the short runtime. If ground delivery vehicles manufactured by all companies are taken into consideration, the average distance covered by these vehicles is 10 kilometers per charge, with their services limited to short distances. Ground delivery vehicles are designed to walk or travel on sidewalks, but not all of them can climb stairs. Navigation of ground delivery vehicles is also a key challenge faced by their manufacturers as it requires a set of tasks such as creating maps, localizing ground delivery vehicles in those maps, and making simultaneous motion plans according to them so that these vehicles can travel or operate easily in uncontrolled environments without any human intervention. Several manufacturers of ground delivery vehicles have developed robotic pilot models, and these manufacturers are proceeding with technological advancements and improvements in these pilot models after testing them under different conditions and circumstances.

Market Ecosystem Map

The key stakeholders in the Autonomous Last Mile Delivery market ecosystem are the platform manufacturers, subsystem manufacturers, service providers, software providers, and miscellaneous (insurance companies), as well as the end users. The following figure lists some global platform manufacturers, subsystem providers, service providers, and software providers.

The market for delivery drones in the aerial segment and self-driving vans & trucks in the ground segment is projected to grow with higher CAGR.

Based on the platform, market in the aerial segment is divided into Cargo Drone and Delivery Drones, and for the ground segment, the market is divided into Delivery Bots and Self Driving Trucks and Vans. The  delivery drones in the aerial segment and self-driving vans & trucks in the ground segment is projected to grow with a higher CAGR due to the increasing need for autonomous delivery solutions. Drones, self-driving vans, and trucks have immense potential as a last mile resource because they are faster and diminish the need for human intervention.

Long range segment (>20 Kilometers) is expected to lead both the aerial and ground autonomous last mile delivery markets, with higher CAGR during the forecast period.

Based on range, aerial and ground segments comprise of Short Range (< Kilometers) and long range segment (>20 Kilometers). The long-range segment is expected to lead both the aerial and ground autonomous last mile delivery markets during the forecast period. This is owing to high portability, increased efficiency, and low operating costs of aerial drone delivery services. Also, the need to curb pollution in big cities and need for long-range autonomous ground robots, which could reduce carbon dioxide emissions pose as the biggest driver for this market segment.

For Aerial Section, 5-10 Kilograms Payload Weight segment is expected to grow with highest CAGR, and for ground segment >10 kilograms segment is expected to grow with highest CAGR  during the forecast period.

By Payload Weight, Aerial and Ground segments are divided into <5 kilograms, 5–10 kilograms, and >10 kilograms. The <5 kilograms segment is expected to lead the aerial autonomous last mile delivery markets due to the growing usage of drones in the healthcare sector. During the forecast period, the 5–10 kilograms segment is expected to lead the ground autonomous last mile delivery markets. China, South Korea, and other countries are formulating new guidelines to regulate the operations of ground delivery vehicles with weights of 5–10 kilograms on public streets to avoid injury to pedestrians and damage to public property in case of crashes or malfunctioning.

For both Aerial and Ground segments, the infrastructure solution segment is going to have the highest growth.

Based on the solution, the aerial delivery drone/ground delivery vehicle market is classified into hardware, software, and infrastructure. For both the Aerial and Ground segments, the infrastructure solution segment is going to have the highest growth. The development of robust infrastructure solutions supports the scalability and expansion of the drone and ground bot market. By equipping present airframes and autonomous delivery vehicles with state-of-the-art sensors and AI technology, the infrastructure solutions empower better navigation, obstacle avoidance, and seamless coordination within the operational ecosystem. The integration of advanced infrastructure solutions allows for efficient communication and synchronization between aerial delivery drones and ground delivery bots. This integration enhances the overall logistics and supply chain management processes, ensuring smooth and effective operations from end to end. As the market for aerial and ground delivery solutions continues to grow, the demand for advanced infrastructure solutions is expected to surge. This presents an opportunity for technology providers and manufacturers to offer reliable and efficient infrastructure solutions that can cater to the evolving needs of the industry, supporting the ongoing technological upgradation and optimization of drone and ground bot operations.

North America is expected to lead the market during the forecast period.

 North America is projected to lead the autonomous last mile delivery market during the forecast period. The US is the largest market for autonomous last mile delivery in North America. North America has seen significant investment and partnerships in the ALMD sector. Major e-commerce companies, logistics providers, and retailers are actively exploring and implementing autonomous delivery solutions. Amazon (US), UPS (US), FedEx (US), and Walmart (US) have been piloting and deploying ALMD technologies to optimize delivery operations and improve customer satisfaction. Government support and regulatory frameworks are crucial in shaping the ALMD market in North America. Some states and cities have introduced pilot programs and regulations to test and regulate the operations of autonomous vehicles on public roads, providing a conducive environment for ALMD companies to operate and innovate.

Autonomous Last Mile Delivery Market by Region

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Key Market Players

ALMD companies are Starship Technologies (US), JD.com (China), Nuro (US), Amazon (US), Kiwibot (US), Zipline (US), United Parcel Service (US), Wing (US), Flirtey (SkyDrop) and Matternet, Inc. (US). They have an established portfolio of reputable products and services, a robust market presence, strong business strategies, a significant market share, products with wider applications, broader geographical use cases, and a larger product footprint.

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Scope of the Report

Autonomous Last Mile Delivery Market Highlights

This research report categorizes the Autonomous Last Mile Delivery (ALMD) market based on platform, application, solution, payload weight, and range.

Recent Developments

• In May 2023, Starship Technologies had a strategic partnership with Co-op and Wakefield Council to bring the advantages of autonomous grocery delivery to residents in Wakefield. This partnership aims to provide residents with a convenient and efficient way to receive their groceries through the use of Starship's autonomous robots. Initially, the service will be available to 13,000 residents across 6,500+ households in Wakefield.
• In May 2023, Waymo and Uber, have entered into a strategic partnership. The agreement entails Waymo, a subsidiary of Alphabet Inc., integrating its driverless vehicles onto Uber's ride-hailing and food delivery platform. This collaboration comes on the heels of Waymo's recent expansion of its commercial driverless service in Phoenix and the San Francisco area.
• In March 2023, Starship Technologies, the leading provider of autonomous delivery services, partnered with Trafford Council and Co-op to introduce robot food delivery to the streets of Greater Manchester. The service is initially available to 24,000 residents across 10,500 households in Sale. This launch in Greater Manchester marks Starship's expansion across the northern region of England. The company's robots have already gained popularity in various UK towns and cities, including Milton Keynes, Northampton, Bedford, Cambourne, Cambridge, and Leeds.
• In February 2023, Kiwibot secured a USD 10 million financing partnership with asset financing group Kineo Finance. The funding will be used to expand Kiwibot's fleet of autonomous robots and disrupt the delivery-as-a-service (DaaS) industry. The Colombian startup aims to revolutionize food delivery by utilizing high-driving robots equipped with GPS technology, advanced camera sensors, and artificial intelligence (AI).
• In December 2022, Grubhub teamed up with Kiwibot to introduce robot delivery services on college campuses throughout the United States. The collaboration between Kiwibot and Grubhub will debut with robot delivery services at the University of North Dakota during the next semester. Following its initial launch, robot delivery will expand to other schools. Kiwibot joins Grubhub's roster of partners, including Cartken and Starship, providing robot delivery on nearly a dozen campuses.
• In December 2022, Amazon officially launched its drone delivery service, Prime Air, in Lockeford, California, and College Station, Texas. The company has obtained FAA safety certification and has been working with local officials to introduce this innovative delivery method. When a customer places an order weighing under 5 pounds, a drone will fly to their backyard, drop off the package, and then return to base.

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