Walmart is testing driverless cars to transport goods from warehouse to warehouse as a way of cutting the company’s shipping costs and boosting efficiency, a Wednesday report stated.
The retail giant has teamed up with startup Gatik to test drive the vehicles, Bloomberg reported. The goal, via the driverless vehicles, is to get packages closer to the customers’ destination. Analysts told Bloomberg the market for moving items to warehouses and cutting out the middle man could reach $1 trillion.
“This area has the least number of obstacles and the most certain return on invested capital in the near term,” Mike Ramsey, an analyst with Gartner Inc., told Bloomberg. “If you’re looking to start a business where you can actually generate revenue, this has fewer barriers than the taxi market.”
Gautam Narang, the CEO of Gatik, told Bloomberg the “middle mile” is the “most expensive part of the whole supply chain.”
“This fills a big gap in the market,” he said.
A Walmart spokesperson told Fox Business the company was planning on testing the vehicles in Bentonville, Ark. The retail giant said it was working with state officials to receive the proper approval 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.
"Walmart is interested in the future of autonomous vehicles – that includes both customer delivery as well as transporting goods between our locations," Molley Blakeman, of Walmart's media relations, told Fox Business in a statement. "In March 2019, Arkansas passed legislation allowing for autonomous vehicles to operate in the state under a pilot program."
Walmart has been taking recent strides to bolster delivery services for its customers. Last month, the company announced it was offering free next-day delivery to customers. The items ordered off Walmart’s website will come from one of the six fulfillment centers that’s located closest to the customer.
The Associated Press contributed to this report.