FedEx Corp. (NYSE: FDX) has been testing an autonomous delivery vehicle in the Houston area since April. The vehicle, a Nuro R2 model, is delivering parcels as part of a multiyear, multiphase agreement to pilot autonomous last-mile delivery.
“We have already begun testing with FedEx in Houston, learning about their operations and getting their feedback. Our goal with this partnership is to alleviate the task of high cost and difficult deliveries from everyday delivery drivers,” a Nuro spokesperson told Modern Shipper.
A FedEx spokesperson added that pilot is intended only for a “very small percentage of pickup and delivery services that are time consuming and less efficient for drivers and service providers to handle, particularly late night and appointment-based pick-ups and deliveries. The packages will generally be smaller and lighter-weight e-commerce packages.”
It is the first parcel logistics pilot for Nuro, which made news earlier this year when it announced a program with Domino’s for autonomous pizza delivery in the Houston area.
“Working with FedEx, the global leader in logistics, is an incredible opportunity to rethink every aspect of local delivery. This multiyear commitment will allow us to truly collaborate and bring Nuro’s powerful technology to more people in new ways and eventually reach large-scale deployment,” Cosimo Leipold, head of partnerships for Mountain View, California-based Nuro, said in a statement. “Our collaboration will enable innovative, industry-first product offerings that will better everyday life and help make communities safer and greener.”
The Nuro spokesperson declined to provide specifics as to the number of vehicles or specific operational details but said the two companies “will test and deploy Nuro’s robots together and grow over time to a scale that will be transformative for logistics and for everyday life.”
“This partnership will allow Nuro and FedEx to explore various high-value use cases, including multi-stop and appointment-based deliveries,” the spokesperson told Modern Shipper. “Subsequent phases of the partnership will give FedEx access to Nuro’s forthcoming next-generation autonomous vehicle and eventually reach large-scale deployment of Nuro bots in multiple markets.”
Nuro’s R2 robot is making the deliveries. R2 is a second-generation vehicle from Nuro. The first version, R1, began making deliveries for Kroger in Scottsdale, Arizona, in December 2018. R2 offers more cargo space and a longer range. It also offers temperature control for items inside the cargo compartments.
Nuro received U.S. Department of Transportation approval to operate the vehicle on roadways in early 2020.
“FedEx was built on innovation, and it continues to be an integral part of our culture and business strategy,” said Rebecca Yeung, vice president of advanced technology and innovation for FedEx Corp., in a statement. “We are excited to collaborate with an industry leader like Nuro as we continue to explore the use of autonomous technologies within our operations.”
The Domino’s pilot allows customers to schedule a prepaid order on the Domino’s website and select R2 autonomous delivery. In that case, the customer will receive text messages with R2’s progress and a unique PIN number so they can retrieve their order from the vehicle using a touchscreen on the bot.
“We are focused on partnering with best-in-class companies that cultivate a culture of innovation and share our vision for the future of autonomous delivery,” the Nuro spokesperson added. “Nuro and FedEx have a shared vision for the future of delivery and a commitment to communities, and that includes the hardworking local delivery drivers who bring people packages today. Nuro’s technology can help improve the daily experience of FedEx’s team members, taking on inefficient deliveries, finding new ways to move parcels and adding new capacity to support rapidly growing demand — all while creating convenience for FedEx’s customers by delivering at the most convenient times.”
In November, Nuro announced a $500 million Series C fundraising round, bringing its total funding since its founding in 2016 to over $1 billion. The round, led by funds and accounts advised by T. Rowe Price Associates, with participation from new investors including Fidelity Management & Research Co. LLC and Baillie Gifford and existing investors such as SoftBank Vision Fund 1 and Greylock, also featured an investment by Chipotle.
The Nuro pilot is not FedEx’s first foray into autonomous delivery robots. In 2019, FedEx announced the debut of the FedEx SameDay Bot, which was designed to make deliveries from retailers to customers’ homes or businesses.
Earlier this year, BrightDrop, a General Motors (NYSE: GM) company, announced that FedEx Express had completed a pilot of its EV600 electric delivery van. FedEx is planning a second pilot with the vehicle, which includes an innovative electric pallet (EP1) system and related connected services that can help with proper picking and loading operations to ensure the delivery driver can maximize efficiency along the route.
The EP1 uses an electric hub motor that can power the pallet at up to 3.1 mph. Built on four wheels and looking like a rolling box, the EP1 features adjustable shelving and can carry up to 200 pounds. It moves easily into and out of the EV600. According to BrightDrop, a pilot of the EP1 with FedEx Express allowed the courier to handle 25% more packages in a day.