Canada is poised to see driverless commercial delivery of goods come to Toronto in the near future, thanks to startup Gatik bagging a $25M infusion of capital plus a partnership with Canada’s largest retailer.
Launched in 2017 in Palo Alto, Gatik is focused on B2B short-haul logistics, i.e. the “middle mile” shuttling goods between warehouses and retail outlets. With the current boom in e-commerce, customers want to receive their purchases ever faster. For retailers to deliver on this, they face challenges in cost and labor. According to Gatik, ninety percent of retailers are losing money on each delivery. To make it worse, a lack of drivers holds them back. Currently a typical order to be delivered to your neighborhood retail store or pickup point might take two days (what we used to call “fast”). By implementing a small army of bot trucks running between micro fulfilment centers to pickup points, “retail customers who previously had to wait for order fulfillment once every two days now have their orders filled once every two hours for a 24X increase in efficiency,” according to Gatik’s CEO & Founder Gautam Narang.
B2B short-haul is a heretofore relatively neglected use case in the driverless trucking spectrum. Gatik occupies a unique niche here, particularly since they are focused on “box trucks” rather than tractor trailers. This is quite different from the big truck AV startups who are focused almost entirely on long haul big rig highway trucking. Plus and TuSimple go a step further, aiming to deliver goods directly to loading docks by handling a modest degree of surface street driving. On the other end of the truck AV spectrum, the focus is on operating within logistics yards, staying off public roads; Outrider is a prominent player here. Their customers may start asking them to make short moves outside the gate, for instance to deliver containers to a nearby rail yard on a public road. This would be a logical next step towards Gatik’s target domain except that Outrider focuses on tractor-trailer operations.
Nuro and Udelv have a street-oriented B2C focus, with packages delivered for curbside pickup wherever customers are within their service zone. Therefore, these companies must map entire areas, whereas Gatik’s B2B operations are only concerned with repeated routes within a company’s logistics network. Aurora could pivot to street operations for trucks given the street autonomy backgrounds of their founders, said Lea Theodosiou-Pisanelli, Director of Partner Products and Programs at an online event earlier this month. If Aurora buys Uber ATG, as the current rumor mill suggests is a possibility, they could just spin up a group targeting Gatik’s use case. Waymo could do so as well.
Looking across the freight AV landscape though, I see Einride and NuPort as Gatik’s closest competitors. Einride deploys driverless custom-built electric trucks that have a similar freight carrying capacity as the Ford Transit 350 box trucks Gatik is using. Uniquely worldwide, Einride has deployed driverless commercial services in Sweden and is now establishing a presence in the U.S. Thus far, their public road system uses remote drivers, but Einride statements have indicated that operating with on-board autonomy is definitely in the cards for specific use cases. NuPort, a very early-stage startup in Toronto, aims to serve repeatable routes within the middle mile market, but like most of the others above they are focused on tractor-trailer moves. All in all, with their B2B focus combined with running box trucks in repeated routes, Gatik alone occupies this unique space. For now.
Loblaw To Power Canadian Market Entry
With 2400 locations, Loblaw is the largest mega-retailer throughout Canada. GATIK’s multi-year partnership with Loblaw will serve retail locations across the Greater Toronto Area beginning this January. This follows the successful completion of a 10-month on-road pilot in Toronto with a single automated delivery vehicle. “As more Canadians turn to online grocery shopping, we’ve looked at ways to make our supply chain more efficient. Middle-mile autonomous delivery is a great example,” said Lauren Steinberg, Senior Vice President, Loblaw Digital. “With this initial roll-out in Toronto, we are able to move goods from our automated picking facility multiple times a day to keep pace with PC Express online grocery orders in stores around the city.” She adds that this facilitates online ordering and contactless delivery for customers.
To meet Loblaw’s retailing needs, Gatik upfits their box trucks with refrigeration units, lift gates, and its proprietary self-driving software for urban, suburban and highway driving. The company operates trucks ranging from 10 to 26 feet in length to best fit carrying capacity with the shipping needs of the moment. Gatik says they will be operating five vehicles for Loblaw up to seven days a week, twelve hours a day, on five public road routes with fixed pick-up and drop-off locations. All vehicles will have a safety driver as a co-pilot. In Arkansas, Gatik is continuing delivery services for Walmart, their first retail partner, which have been running for over a year.
An Oversubscribed Funding Round Can Really Make Your Day
Gatik’s Series A fundraise of $25M brings their total funding to $29.5M. Originally aiming for $15M or higher, Narang notes that this funding round was strongly oversubscribed. The new investment was co-led by Wittington Ventures and Innovation Endeavors with participation from FM Capital and Intact Ventures along with existing investors such as AngelPad, Dynamo Ventures, and Fontinalis Partners. I asked Naurang how raising funds in the current climate is different from the past. Are investors asking different questions now? He said, “The key thing was having customer traction” with WalMart, Loblaw, and several others to be announced soon.
Serious Smarts With a Dose of Prudence
Gatik operates its AV fleet on single routes up to 300 miles. In these hub-and-spoke operations, the routes are repeated and known, with mapping updated with every traversal. “This allows us to constrain the problem to get to market faster,” said Narang. Noting that the Gatik Automated Driving System (ADS) can handle signalized intersections, unprotected left turns, and obey traffic signs, Narang said “we will always minimize risk: if three right turns are an alternative to an unprotected left turn, we will do that.” Passing by schools and fire stations is also avoided to further reduce risk. I was intrigued to hear from Narang that a “yet to be announced sensor” will allow their ADS to handle extreme weather, including Toronto’s heavy winter snows. Most ADS developers are avoiding the rough stuff for now by focusing on benign weather areas. Various methods to deal with snow-covered roads have been evaluated by academia, including artificial intelligence to support camera-based perception, localization using ground-penetrating radar, and GPS-enabled precise mapping and localization. Whatever the method, I want to see these snow handling trucks in action! Maybe by the time this upgrade is running, I will actually be able to travel from the U.S. to Toronto to take a look.
Like many other ADS developers, Gatik has implemented remote assist, connecting their vehicles to a monitoring center where human operators can advise the vehicle how to handle unusual situations when needed. Unlike people movement, the sack of potatoes in the back of the truck doesn’t mind if the vehicle stops for some remote human help, which helps immensely for early deployment.
Currently, safety drivers are on board. When will operations go driverless? Narang is bullish, saying, “On our existing routes that we’ve been running for a couple of years, sooner than others.” In Canada they are working with provincial regulators to take this step. The Ontario Ministry of Transportation’s AV pilot program allows driverless operations based on an approved application. Their policy requires “full human oversight of the vehicle’s functionality while it is operating on a public roadway.” A remote monitor is allowed for human oversight, therefore Gatik’s remote assist is designed to fulfill this requirement.
Gatik says that they have so far completed “more than 30,000 revenue-generating autonomous deliveries for multiple customers across North America.” I’ll be watching to see how long it takes for the Loblaw-Gatik services to go driverless. Narang suggests this will be fairly soon, and if so, would constitute Canada’s first truly automated delivery vehicles on public roads. Let the bots deliver!