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Delivery Robots Could Generate Trillions For U.S. Economy, Transform Last-Mile Delivery: Study

The use of autonomous vehicles for last-mile delivery services has the potential to transform U.S. consumer shopping behavior and generate as much as $4.1 trillion in value by 2035, according to a new economic impact study from global consultancy Steer Group.

Last-mile fulfillment has become a vital part of the supply chain, as the rise of e-commerce has increased demand for the rapid delivery of goods. Third-party logistics companies continue to expand to keep up with that demand, but delivery AVs are a relatively new offering.

The study, commissioned by robotics company Nuro and prepared independently by Steer, assessed the impacts of delivery AVs on the U.S. economy from 2025 to 2035 under three different uptake scenarios.

Under the gradual shift or average scenario, about 23% of the anticipated 191 billion vehicle miles traveled for shopping and errands between 2025 and 2035 could be replaced by AV delivery services. The National Household Travel Survey suggests an average of about 27 billion shopping and errand round-trips in the U.S. each year.

To meet the increased demand, 3.1 million delivery AVs would be needed by 2035, based on 35 million to 40 million deliveries each day. The sector is expected to make a total investment of $1.1 trillion over that time frame, in two main areas: direct spending into supplying industries to acquire raw materials and employee compensation.

The benefits to the U.S. economy are significant. About $3.4 trillion will be generated by the value of goods and services produced directly within the delivery AV services sector, as well as increased production of goods and services in other related sectors, according to the report. The remaining $719B is expected to come from indirect benefits, including road safety, time savings and a reduction in transport emissions.

More people are expected to use AVs as the user experience improves and costs fall. The report found that while existing grocery delivery services can add between $10 and $201 to the cost of a home order, initial delivery AV pilots have cost $5.95. Nuro aims to reduce the delivery cost to $0 for the consumer, making the service more accessible.

Uptake of AVs prior to 2025 is expected to be modest. That's why the analysis starts in 2025, when the commercial delivery AV fleet would begin operating at scale. Steer noted that external data used in the report was prepared prior to the coronavirus pandemic, and doesn’t factor in the influence of the pandemic in its economic impact outlook.

The report acknowledged that the pandemic has amplified the use of AVs in last-mile delivery services. Consumer demand for contactless home delivery has increased dramatically and AV developers have increased their testing of delivery applications. Due to uncertainty, the study did not attempt to forecast the impact of the pandemic on the sector.

Nuro has been using Houston as a pilot location to roll out its technology, because Texas has a welcoming regulatory framework. The company has been performing deliveries for three Kroger stores in Houston since April and began deliveries for a CVS Pharmacy store in June.