Walmart is planning to use self-driving cars to transport products between warehouses in the hopes of slashing costs and boosting efficiency.
Walmart spokeswoman Molly Blakeman told CNBC the retailer is working with partner Gatik, a self-driving vehicle startup, to test out a self-driving vehicle that will travel the two-mile route in Bentonville, Arkansas between two stores.
“We are working with city and state officials to obtain the approval we need to operate and plan to start the pilot program this summer with the aim being to learn about the logistics of adding AVs into our ecosystem, operation and process changes, and more opportunities to incorporate this emerging technology,” Blakeman explained.
Earlier this month, Walmart’s U.S. chief Greg Foran showed off three Ford delivery vans with self-driving technology to reporters outside its supercenter in Rogers, Arkansas. According to Foran, going driverless to increase profits is a “no-brainer.”
“This middle mile is the most expensive part of the whole supply chain; it’s a huge pain point,” said Gautam Narang, CEO of Gatik, according to Bloomberg. “This fills a big gap in the market.”
In fact, analysts predict that the market for transporting goods on a fixed route from warehouse to warehouse using driverless vehicles could reach $1 trillion.
“This area has the least number of obstacles and the most certain return on invested capital in the near term,” said Mike Ramsey, an analyst with consultant Gartner Inc. “If you’re looking to start a business where you can actually generate revenue, this has fewer barriers than the taxi market.”
“There’s absolutely a market for this sort of thing,” added Sam Abuelsamid, an analyst with Navigant Research. “People don’t really care much about what goes on behind the scenes to get them the products they want. But the value of all the goods being moved is far more than ride-hailing applications.”