AMRs: A Future Road User and Society’s New Delivery “Man”?

The food and goods delivery industry currently uses labor to achieve last-mile delivery. This market has seen its importance grow during the pandemic as it keeps food and goods connected to consumers. While the pandemic has brought companies such as Deliveroo, UberEats, and JD.com into the limelight, industry players have not ceased to improve their operational efficiency and look for innovative solutions to better optimize cost. That is where the robotics industry comes in—news is bubbling around the use of Autonomous Mobile Robots (AMRs) globally. For example, Nuro partnered with Domino’s Pizza for pizza delivery and with Fedex to test AMRs for delivery in Houston. In South Korea, Hyundai Motor Company has partnered with Woowa Brothers (a food delivery app) to use AMRs for food. And China is at the forefront of the technology’s development and adoption: JD.com, Meituan, and Neolix have announced trials to use autonomous delivery in Beijing suburbs this year, following Alibaba’s announcement last year regarding Xiaomanlv.

ABI Research believes that AMRs will likely become the dominant category of mobile robots outside of structured environments. While automated guided vehicles have been taking the bulk of robotics adoptions, interest in and adoption of AMRs have been growing rapidly. ABI Research forecasts that by 2030, the annual revenue for delivery-related AMRs will grow at a compound annual growth rate of 46%, reaching about US$16.3 billion (the third-largest share in terms of AMR market revenue).

There are several underlying factors which underpin rapid adoption of AMRs. Declining fertility rate and increasing longevity have contributed to population aging in many advanced economies. Beyond these challenges, the COVID-19 pandemic has shown what challenges arise when human-to-human interactions are kept at a minimum to mitigate the risk of spreading viruses. Urbanization will continue, and the closer proximity that humans will have with animals will increase the risk of zoonotic viruses. In such environments, AMRs can be the medium of delivery, as we have learned during the pandemic. Other key factors in AMR adoption include the following:

• Shifting Consumer Trends and Expectations. COVID-19 has greatly changed the way consumers make their purchases. The lockdowns and closings of retail stores shifted consumers toward online purchases that were delivered to them in the comfort of their home. This will be a long-term trend as consumers who have traditionally visited brick-and-mortar stores may now have experienced the benefits of online purchasing and delivery, making this method a part of most people’s lives even after the pandemic. The convenience of delivery, which frees up more time for the consumer, has benefits which cannot be denied. In addition, consumers are increasingly expecting quick delivery of their goods, even requesting same-day delivery. According to World Bank data, about 44% of the global population still lives in rural areas, and so the potential delivery use of AMRs coupled with drones could allow rural communities greater access to resources.

• Aging Population and AMRs Have the Potential to Improve Operations. For delivery and logistics firms, the majority of last-mile delivery is performed by the labor force. With the challenges of the aging population and future population decline expected, firms will increasingly compete with other businesses for labor, potentially driving up costs. AMRs can help to relieve the pressures that delivery and logistics firms might face in the labor market. At the same time, AMRs have the potential to improve the operations of delivery and logistics, providing companies with a chance to redesign their operational procedures. This can come in the form of improvement in overall efficiency where AMRs have a larger payload (for example, agility in delivery by changing the static delivery of a single van or rider, or deployment at odd hours).

However, at the current juncture, there are at least three key aspects which need to be addressed: (1) technology and infrastructure, (2) government and regulation, and (3) connectivity.

1. Technology and Infrastructure. The technology aspect of AMRs is addressed in ABI Research’s report Mobile Robotics: Technologies for Autonomous Navigation. This report highlights in detail the various factors and considerations for autonomous navigation and covers the challenges faced by AMRs. Briefly, AMRs have yet to adopt the latest cutting-edge technologies such as 3D Simultaneous Localization and Mapping (SLAM) versus 2D SLAM. This reluctance could be due to the cost, reliability, and readiness of these cutting-edge technologies, or due to other factors. In addition, for AMRs to operate properly, they will require external infrastructure using radio frequency-based beacons or real-time location systems to precisely locate the position of AMRs. Apart from technology, there is also the need to ensure that infrastructure exists, especially in areas with inaccessible residences or delivery locations (e.g., packed dense urban business districts).
2. Government and Regulation. One downside of having a solely private trial for new technology is that the legal framework needs to catch up. While we are still far from a wide-scale adoption of AMRs for last-mile delivery, we cannot underestimate the regulatory and legal aspects. This should not hinder innovation or use of this new technology in society. However, in the real world, when AMRs are out in the open, there will be a need for regulators to know what the technology is capable of and what the risks are to society. From there, safeguards and guidelines will be needed to help this technology gain wider confidence and traction; for example, we learned from e-bikes when certain safety hazards became known. At the same time, it is the role of regulators to aggregate and resolve points of contention among different parties by setting the rules of the game. City development or urban planning agencies also need to take note of the coming adoption of AMRs where the “users” of public space will now include AMRs along with existing members of society.
3. Connectivity. While AMRs are out the in open and have constant interaction with various members of society, it is crucial for AMRs to react quickly to their surroundings. One key inhibitor for low-latency AMRs is the lack of reliable connectivity, which will also prevent the technology from becoming more widely accepted and adopted. For telecommunications operators, this is an opportunity to jump into the vertical industries bandwagon. 5G is well positioned to resolve the challenges of connectivity for AMRs with its support for Ultra-Reliable Low-Latency Communication (URLLC), massive machine-type communication, and enhanced mobile broadband. URLLC, with a target of one millisecond latency, is required to support autonomous driving for AMRs. Therefore, for companies in the AMR space, it is important not to leave engagement with telecom operators for the last stage. The timeline for 5G standalone rollout and the involvement of telecom operators in trials can ensure that AMRs are ready for the future. Another potential avenue for telecom operators to explore is the need for High-Definition (HD) mapping for autonomous driving. HD mapping is necessary to provide context for AMRs to understand where they are and what their surroundings are, with accuracy up to centimeter. These maps need to be updated regularly for AMRs or other forms of autonomous vehicles. 5G can help provide the capabilities to support real-time updates to the HD maps, especially in areas with citywide multiple data streams in real time. These avenues are new and emerging enterprise segments for telecom operators to explore with 5G.

We can be certain the capabilities of AMRs and the design of infrastructure will improve in the long run. As Amara once put it: “we tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run”. However, in the short run, there is a need to boost confidence in AMRs, and this can be accomplished through regulation or through improvements telecoms operators make to their capabilities and their networks. Addressing these will solidify the foundation for AMR adoption.