Amazon’s last-mile delivery services were officially launched in 2018 in an effort to reduce fulfillment and shipping costs that together totaled some $60 billion. Just as Amazon has introduced robotics in its warehouses to increase the efficiency of order picking and reduce costs, the company is looking into automation solutions to further reduce the expense of Amazon’s last-mile delivery. A combination of drones and autonomous vehicles is in the near future for the Amazon last-mile delivery fleet.
That means your next Amazon Prime delivery might come courtesy of a robot. If you live in southern California, it may already have.
Can FBA sellers expect fees to go down when Amazon’s last-mile delivery becomes more robotically efficient? Might Amazon argue that fees remain unchanged to help cover the investment in autonomous delivery vehicles?
We have no idea what Amazon may or may not do, nor do we wish to conjecture. We can, however, discuss how autonomous Amazon last-mile delivery is likely to roll out.
Let’s take a look at
- How autonomous delivery works
- Amazon Scout robot
- The potential benefits of Amazon’s last-mile delivery
- Challenges of autonomous Amazon last-mile delivery
- Does this mean the end of Amazon FBA errors in managing order fulfillment?
How Autonomous Delivery Works
Amazon’s last-mile autonomous delivery is accomplished using driverless vehicles, such as flying drones and four- and six-wheeled robots. These devices employ GPS technologies to arrive at designated locations combined with LiDAR (Light Detecting and Ranging) sensors and camera vision with artificial intelligence (AI) software to compute the shortest routes and avoid obstacles and pedestrians on the way.
Battery- or electrically-powered drones can carry packages over short distances, from either a delivery truck or a distribution center. Amazon Prime Air Drones, under development since 2019, remain in preliminary testing stages, though plans are to create a fleet of more than 200 aircraft. Wing, Google’s drone delivery service, has made successful autonomous deliveries in a test program in Australia. Other parcel services, such as UPS, are also testing the feasibility of drone delivery.
There is also testing of full-fledged driverless cars, similar to those operated by Google’s Waymo. However, the focus, for now, is primarily on the use of small-wheeled robots. These autonomous vehicles drive along sidewalks and pathways to deliver electronically locked packages that open upon arrival. This mode of Amazon’s last-mile delivery became popular during the pandemic as it eliminated human contact.
Amazon Scout
The Amazon Scout is an electric six-wheeled autonomous vehicle that operates along sidewalks and opens up when it reaches the destination for Amazon last mile delivery. A fleet of six Amazon Scouts first began delivering packages in 2019 in a Washington state county near Amazon headquarters, with an additional fleet dispatched to Irvine, California. Trials expanded to Georgia and Tennessee, operating during daylight hours, Monday through Friday.
Challenges
While Amazon’s last-mile delivery using autonomous vehicles is likely to reduce costs and improve efficiency, the up-front investment in the necessary technologies is expensive. Particularly in the case of flying drones, safety is a paramount concern, which is why they remain current in the preliminary testing stages.
Geographies are varied and topologies are inconsistent. Densely populated urban environments are more complex than widespread rural environments, requiring higher levels of autonomy and technological sophistication to arrive at the proper destinations in a timely manner. Traffic conditions are always changing. And even today’s highly sophisticated GPS systems at times provide inaccurate directions.
On top of testing and perfecting the technology to address these issues, autonomous Amazon’s last-mile delivery must satisfy varying local legislative requirements and restrictions.
Potential Benefits
The benefits of autonomous Amazon’s last-mile delivery are twofold: economic and environmental.
Amazon last-mile delivery accounts for a whopping 50% or more of overall parcel spend. Some studies estimate autonomous Amazon last-mile delivery vehicles can manage up to 500 packages a day, and at the same time help literally deliver on Amazon’s promised one- and two-day delivery windows and significantly reduce per delivery costs by as much a dollar or more. That’s at least $500 saved per autonomous Amazon last-mile delivery vehicle per day.
This is particularly important for perishable items, such as food, as well as other necessities, ordered online. Even post-pandemic, consumer reliance on online ordering for food and other personal necessities emphasizes the need for more cost-efficient Amazon last-mile delivery capabilities.
Amazon is also committed as part of its Climate Pledge to achieving zero carbon emissions by 2040. Replacing gas-powered vans and trucks for Amazon last-mile delivery with fully electric, self-driving delivery vehicles help achieve that goal. Some studies estimate anywhere from 23% to 54% of carbon emissions could be reduced by autonomous delivery vehicles.
Does Autonomous Delivery Mean the End of Order Errors
Robots are less likely to make mistakes than human operators. Which doesn’t mean mistakes can’t happen.
Even when autonomous last-mile delivery becomes more of a norm than an experiment, it is overly optimistic this will usher in an era of flawless order fulfillment. Amazon FBA sellers will still need to detect errors in handling your inventory and fulfilling orders. Unfortunately, this is not likely to become an autonomous process.
Unless you decide to use GETIDA (GET Intelligent Data Analytics). GETIDA reviews the previous 18 months of FBA activity to find discrepancies where reimbursement may apply and generates a report estimating the potential amount owed.
How much is owed? Anywhere between 1% to 3% of your revenues. If your sales total about a hundred thousand dollars annually, that’s at least $1,000 to $3,000 Amazon owes you.
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