Mid-size trucks or large cargo vans (or even river barges) bring the marchandise from logistics centers to stores and depots located in high density urban areas, or to their final destination in low density areas. These vehicles will quickly become electric — see Amazon’s recent order of 100k electric cargo van from Rivian (picture above) or DHL’s StreetScooter deployment— but are not likely to become autonomous in the next few years. 

Lastly, we will see a variety of vehicles, on land and in the air, to move goods from urban depots to their final destination, i.e. the last mile, progressively enabling one-hour deliveries. Whereas the previous delivery stages have high barriers to entry with costly sorting centers and broad networks, the last mile delivery space is more likely to see the emergence of new players, in particular for immediate deliveries or local services (e.g. pizza, laundry, etc.). Success in last mile delivery will likely hinge upon the ability to master distribution routing and orchestrate fleets of autonomous vehicles of different types, using analytics and artificial intelligence.

Emergence of new types of vehicles for the last mile

Urban delivery vehicles will likely embrace a considerable amount of technology. Most will eventually go electric, as city centers — mainly in Europe and China — will increasingly ban vehicles with internal combustion engines. This will also benefit total cost of ownership as battery cost continue to drop, and will enable quieter deliveries. Most vehicles will also become highly automated as the technology mature, and likely earlier than passenger vehicles thanks to lower operating speeds. According to McKinsey (see graph), driving autonomy can potentially reduce delivery cost by 40%.