(CBS) – It’s morning in Berkeley, California, and the Kiwibots are heading off to work.
These four-wheeled robots navigate sidewalks and even crosswalks taking food to hungry college students. “This is the future,” said Kiwibots CEO Felipe Chávez.
It’s a real-world test of robot delivery that sometimes collides with reality.
The reality today is that delivery is a bigger business than ever. With online shopping, it’s estimated the U.s. Postal Service, FedEx and UPS will process, sort and deliver more than two billion packages between Thanksgiving and New Year’s Eve. Amazon’s own fleet of delivery trucks is expected to handle 275 million holiday season shipments.
And Amazon is pushing the delivery envelope, offering Prime members free one-day shipping.
Anne Goodchild, director of the Supply Chain Transportation and Logistics Center at the University of Washington, said companies find they must offer free delivery now to be competitive. Yet, it is expensive to deliver stuff: “Yeah, and it’s never free, right? It costs money. The question is, where do you get that money from?”
The growth in home delivery is focusing attention on what logistics experts call “the last mile.”
“They don’t mean literally a mile; they mean the last piece of this supply chain,” Goodchild said. “And the reason it’s interesting is it’s the most expensive mile of the whole thing. I’ve seen estimates of more than 50% of the cost is from that last mile. So, it’s expensive because it’s labor-intensive. There’s a driver who takes every package up to the front door.”
It’s estimated that free shipping will cost Amazon more than a billion dollars this quarter alone. Which explains why shippers are looking at some radical new technologies to cut the cost of the last mile.
Matthew Sweeny, founder and CEO of a delivery drone startup called Flirtey, believes his delivery drones will be delivering to homes all across America. He invited correspondent John Blackstone to Flirtey’s site to witness the drones being tested. “We’ve been secretly testing this technology in the desert for years, and this is the first time a film crew has come out and see it,” he said.
He predicts that by Christmas 2020, many packages will be delivered this way: by an airborne drone lowering its payload to the ground. Sweeny opens the package left by the drone: Two Flirtey shirts and a Flirtey mug.
“I was kinda hoping for pizza,” said Blackstone.
“We can do that,” Sweeny laughed.
In fact, they did it in New Zealand in 2016, delivering pizza in a test of an earlier model drone. And the drone doesn’t expect a tip.
“The labor cost of a drone delivery is less than the labor cost of any other form of delivery because the technology’s autonomous. It flies itself,” he said.
Flirtey’s drone is guided by GPS. Sweeney won’t reveal how much weight it can carry, but claims it can handle about 75 per cent of all deliveries made in the U.S. today.
The drone takes off from, and lands on, what Flirtey calls a portal. “Our vision is to have a portal at every mall across America,” Sweeny said. “Every FedEx or UPS for package delivery. Our mission is to deliver whatever you want, when you want it.”
Six years ago, Jeff Bezos unveiled Amazon’s drone project. But Flirtey is part of an FAA program with fast-track approval for commercial drone delivery, and expects to beat Amazon with airborne deliveries,
In Berkeley, the delivery robots roaming the streets are in close proximity to people. That is what’s being tested.
“We need to make sure that robots live in harmony with other persons,” said Kiwkibots’ Felipe Chávez. He moved from Colombia with the dream of building his robot delivery company close to Silicon Valley. His Kiwibots deliver food within about a mile of the University of California campus here.
Blackstone asked, “So, there’ll be a time, we’ll walk up and down the street, passing robots and we won’t even notice?”
Chávez said, “Literally. And sometimes that happens here in Berkeley. People, like, at the beginning, a lot of people were taking photos, super-excited. Now, for some people it’s just normal.”
“A robot delivering a burrito is normal?”
One advantage of drones and robots: they can deliver on demand when someone is home to receive the package. That could help combat porch pirates, the thieves who see any newly-delivered cardboard box as an irresistible opportunity.
Logistics expert Anne Goodchild looks at all those cardboard boxes, and sees something else: the environmental impact.
“I think it’s a good time to be in the cardboard industry,” she said. “And I do hope that we can move to more reusable materials. The industry is still working this out.”
Home delivery, however, may be better for the environment than customers driving their own cars to shop. “Trucks are bigger; trucks are heavier; trucks are more polluting,” said Goodchild. “But we have to remember that that truck is actually like a bus for groceries. That truck is visiting many homes. And what our research shows is that the truck is more efficient.”
But that advantage can be lost in the rush for ever-faster delivery.
“So, a one-hour delivery, two-hour delivery is not reducing congestion and is not reducing emissions,” Goodchild said. “So, there’s no efficiency in that the way there is efficiency in the milkman who can deliver to 40, 50 homes in a single trip.”
Indeed, let us not forget the milkman. Or, as Eric McElligot said, “I’ve been at it for three years, John, and I haven’t soured on it yet!”
Along with his puns, McElligot delivers organic milk in glass bottles in the San Francisco area. “It’s just a lot easier to have it delivered,” he said. “Plus, I mean, people like the old-school aspect of it, of, you know, getting milk delivered.”
He brings a gallon to Paula Gillespie’s house once a week. “It’s fantastic,” she told Blackstone.
“It seems a little anachronistic today,” he said.
“Yes. Well, that would be me!” she laughed. “I fit right in with that.”
“There’s these robots that deliver things to people …”
“I hate it. I hate it. So, this is fulfilling a need that, in my opinion, is counterproductive to society,” Gillespie said. “At least the society that I know and love. And it does not include robots and drones.”
Blackstone asked McElligot, “Do you really think that’s possible that a drone could put you out of business one day?”
“Yeah, at some point,” he replied. “But I should be retired by then, hopefully.”