Exploding Growth: Autonomous Delivery Market Set to Take Off

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At $860 million last year, the global autonomous delivery market seems quite large, yet it remains in its infancy.

A new report from consultancy MarketsandMarkets predicts the sector will grow to $4.9 billion by 2030, growing at a 21.5% compound annual growth rate. The report, "Autonomous Last-Mile Delivery Market by Platform," cited the advancement of sense and avoid systems in aerial delivery drones, expansion of e-commerce, and increased use of low-cost and light payload drones by startups for product delivery.

The report breaks the growth down by platform, combining ground delivery vehicles such as self-driving trucks and vans and delivery robots into one group and cargo and delivery drones into another.

The use of autonomous vehicles, regardless of platform, could reduce last-mile delivery costs for the retail industry between 80% and 90%, the report suggested. "Furthermore, advancement in technology for autonomous ground delivery vehicles and increase in venture funding for the development of next-level ground delivery vehicles has enhanced the market growth," it said.

MarketsandMarkets said the global pandemic accelerated the push for autonomous delivery.

"Suppliers are implementing autonomous means such as drones and robots to deliver the goods to the customer without any human participation," it said.

Demand in the food and retail sectors will push the adoption of delivery drones and self-driving vehicles while long-range cargo drones (traveling more than 12 miles) will outperform the other sectors during the forecast period, the firm said.

"This is owing to high portability, increased efficiency, and low operating costs of aerial drone delivery services," the report noted.

Pollution and congestion in cities will drive the adoption of ground robots, it added.

VentureRadar has identified at least 160 companies in the autonomous delivery space, and those, it says, are just the "top-ranked companies" for searches using autonomous delivery as a keyword. The number of firms in the space has exploded in recent years and includes such names as Nuro, Einride, Elroy Air, Vecna Robotics, Uber UBER, Serve Robotics, and Starship Technologies. MarketsandMarkets identified global leaders as JD.com, Amazon AMZN, Kiwi Campus, Zipline, United Parcel Service, Wing, Flirtey, and Aerodyne Group.

There are hundreds more getting into space and new pilots are launching almost daily. FedEx FDX and Domino's DPZ are testing robot delivery with Nuro in Texas, Walmart WMT is trialing autonomous middle-mile delivery with Gatik in Arkansas, and Uber and Lyft have announced self-driving delivery and ride-share pilots. UPS and Amazon are also working on drone delivery programs.

A 2018 Zebra Technologies survey found that 78% of people surveyed expect robots to deliver parcels by 2028, 81% anticipate drone deliveries being commonplace, and 85% expect delivery by an autonomous vehicle.

North America, and the U.S. in particular, will lead the way during this period, MarketsandMarkets said, noting that investment by government and private firms are pushing advancements in autonomous last-mile solutions faster than other parts of the world. Last year, venture capital firms poured $24.3 billion into supply chain companies, about half of that heading to last-mile delivery firms, according to a recent Business Insider article.

 Click for more articles by Brian Straight.

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