FedEx is testing a last-mile delivery robot together with Walmart and Pizza Hut

By Lisa Baertlein

(Reuters) – FedEx Corp plans to begin testing a robot this summer to handle home deliveries for partners ranging from Walmart Inc to Pizza Hut.

Shipping companies, retailers and restaurants are experimenting with robots, drones and self-driving cars to use automation to reduce the high costs of delivering appliances, groceries and even cups of coffee over the “last mile” to consumers’ doorsteps.

For its project, FedEx is partnering with DEKA Development & Research Corp, whose founder Dean Kamen invented the Segway stand-up scooter and the iBot stair-climbing wheelchair. The delivery company said the robots could become part of its SameDay service, which operates in 1,900 cities around the world.

The battery-powered robots look like coolers on wheels. Cameras and software help them detect and avoid obstacles as they travel along sidewalks and streets at a top speed of 10 mph.

The project must receive approval in test cities, including Memphis, the carrier’s hometown. The first deliveries will then be made between FedEx stores.

On average, more than 60 percent of dealership customers live within three miles of a store. FedEx said it is working with its partners, which include AutoZone Inc and Target Corp, to determine whether autonomous deliveries to them are a viable option for fast, low-cost deliveries.

The “last mile” to the home accounts for 50 percent or more of total package delivery costs. Restaurants pay third-party delivery services such as Uber Eats, DoorDash and GrubHub commissions of 10 to 30 percent per order.

Investors and companies are pouring millions of dollars into projects designed to reduce these costs and overcome regulatory hurdles. For safety reasons, many states want autonomous vehicles to be supported by humans as emergency drivers.

Starship Technologies, which has raised more than $40 million in venture capital, deployed robots to deliver packages in the San Francisco Bay Area last year.

In January, the company partnered with French food service company Sodexo to deliver Starbucks, Dunkin’ Donuts and Blaze Pizza orders to the 40,000 students on the campus of George Mason University in Fairfax, Virginia. The service costs $1.99 per order.

Amazon.com is testing its own delivery robot called “Scout.”

FedEx competitor United Parcel Service Inc. is not testing robots, but like FedEx and Amazon, it is experimenting with drone deliveries.

Other tests include collaborations between grocer Kroger Co and self-driving car startup Nuro, as well as General Motors Co’s DoorDash and Cruise Automation.

(Reporting by Lisa Baertlein in Los Angeles; Editing by Sonya Hepinstall)