WalmartIt announced Monday that fully driverless trucks have been implemented in its online grocery service. The goal is to boost capacity and lower inefficiencies.

Walmart and Silicon Valley start-up Gatik said that, since August, they’ve operated two autonomous box trucks — without a safety driver — on a 7-mile loop daily for 12 hours. Gatik trucks carry online grocery orders, which are delivered to the “dark shop” Walmart fulfillment center. These orders are taken to the nearest Walmart Neighborhood Market grocery shop in Bentonville Arkansas.

After receiving approval from Arkansas State Highway Commission in December 2020, the program started. Over the summer, safety drivers were pulled. The partnership is focused on the so-called middle mile — the transport of goods within the supply chain most often from a warehouse to a fulfillment center or a warehouse to a retailer.

In a press release, Walmart’s senior vice president Tom Ward stated that he was thrilled to work with Gatik in order to reach this first industry-first driverless milestone. Through our collaboration with Gatik we have discovered that autonomous box trucks provide a safe, efficient and sustainable way of transporting goods along repeatable routes.

This technology’s holy grail is “Taking the driver out.” CNBC interviewed Gautam Narang (Gatik CEO), who co-founded the company in 2017. CNBC spoke with Gautam Narang, Gatik CEO, who said that having the confidence of the largest retail company in the world has given us a huge boost to what we do. It also validates our technology and our solutions, as well as our advancements.

Walmart is the country’s largest seller of groceries and will be testing Gatik autonomous cars as part of its shift to “hub and spoke” grocery delivery model. This means that dark-stores are close to customers and can still serve multiple retail locations. Walmart stated that automated vehicles would allow associates to be more autonomous and perform higher-level tasks such as picking up and shipping online orders, customer service and support.

It is not possible to continue using the old delivery architecture, where a distribution center was located several hours away from your end customer. These fulfilment centers are required by grocery stores. Once you’re close to your customer, you need to reduce the warehouse size,” Narang stated. The fulfillment centers are becoming smaller, which means that there’s a greater need for frequent trips to pick up customers from them. This is where we step in.

It KrogerSupermarket chains has testedAutonomous delivery has been possible with Nuro, a start-up that began autonomous deliveries in 2018. It said it now completes thousands of last mile deliveries within the Houston area. Kroger also uses automated warehousesOnline grocery delivery to Florida and all other states that do not have brick-and-mortar locations.

AlbertsonsSafeway, Kings and other supermarket operators are owned by. is testingTortoise, a start-up in Northern California, offers “last mile delivery”. Employees at the shop fill Tortoise carts with groceries. Tortoise “drivers”, who use an Xbox controller, control the carts remotely and navigate to customers’ homes.

Gatik stated that autonomous vehicles could reduce logistic costs up to 30% in grocery businesses. Grocery usually has a thin margin of between 2%-4%. according to research from Bain and Company

Walmart and Gatik will be running similar trials in New Orleans, using an electric vehicle with a driver. This truck can transport grocery orders online from Walmart Supercenters to customers’ pickup locations. 

Narang stated that the AVs can also help businesses reduce the effects of the country’s labor shortages on supply chain chains, outside the grocery industry.

Narang stated that this solution was very applicable across many supply chains and different types of logistics. It’s more than a labor shortage. This is about efficiency and reducing operating costs.