Gatik's driverless B2B delivery service gains pace in US and Canada

At a central warehouse in Toronto, a delivery truck loaded with grocery products leaves for a store — from where customers can pick up their orders — of Loblaw, Canada’s largest retailer.

It might sound like routine activity, but for the fact that there is no human being aboard the truck. The driverless service is provided by Gatik, a company founded by an Indian-born, US-based trio and a leader in autonomous middle-mile logistics in North America.

The middle-mile segment, unlike long-haul transport or last-mile delivery to an end consumer, involves business-to-business (B2B) operations, mostly from a warehousing location to a retail centre. Last month, Gatik and Loblaw announced the launch of fully driverless operations for select orders and locations in Toronto, Canada’s largest city.

In an interview, Gatik’s CEO Gautam Narang explains how the process would work: “Once the warehouse employees punch in the code that we would have provided, they can command the truck to take off. The truck would run on predefined routes, navigating all the complexities of an urban environment, from traffic lights to intersections, pedestrians and bicyclists —that is what we handle and navigate. It reaches its destination and backs up into the loading bay. Once it is unloaded, the employee will punch in the code again for the truck to return.”

A Loblaw spokesperson told Business Standard, “With this initial roll-out in Toronto, we are able to move goods…multiple times a day. Autonomous delivery is complementary to our existing supply chain network. It supplements current routes and improves delivery times and capacity on our middle-mile runs.” For consumers ordering online, adds Narang, the system expands their choice as warehouses can store far more products than retail locations.

When Gautam Narang, his brother Arjun Narang, and Apeksha Kumavat started Gatik five years ago, they were clear in their decision to provide short-haul B2B logistics in the middle-mile segment. The CEO says, “We wanted to focus on an application of autonomy that was more near-term and solving a real customer pain point. Gatik is the only autonomous trucking company worldwide to be doing these commercial deliveries on a daily basis without anyone behind the steering wheel.”

American customers of Gatik include retail giant Walmart and Fortune 500 companies like Georgia-Pacific. Narang says what Gatik’s clients all have in common is a huge shortage of drivers, and growing consumer demands for faster and cheaper deliveries. “If you want to increase the frequency of deliveries and have shorter delivery windows, you have to move your supply chain closer to the end consumer and as you do that there is a need for more trucks, higher frequency of deliveries and more drivers, and that’s where the autonomy solution like ours comes into the picture,” Narang says.

Gatik was set up in Mountain View, California, and later opened an office in Toronto to access machine learning and artificial intelligence talent in and near the Canadian city. Today, the company has over a hundred employees in the US and Canada, and is still expanding, adding a couple of workers every week. The custom autonomous driving software stack is developed in-house, but its fleet of over 30 light- to medium-duty trucks is leased and customised, in what Narang calls an asset-light model.

Autonomous deliveries are a growing trend, especially in the US and Canada, but it comes with several challenges, most notably in adhering to local traffic and legal regulations.

Narang says Gatik takes a proactive approach in working closely with various stakeholders such as state transport ministries, local police and fire departments and other emergency services to brief them about their technology and plans. “Think of it as the anti-Uber approach where we tend not to surprise anyone,” he quips, noting “this kind of technology is obviously very new for some of the policymakers and regulators”.

While many of Gatik’s trucks are fully driverless on runs that can involve several miles, they are not without supervision. Among the company’s employees are remote supervisors, each monitoring multiple trucks for potential problems en route. But Narang makes it clear the supervisors cannot drive the trucks: “We don’t allow remote driving on public roads. We feel it’s unsafe and unnecessary. Low level controls always happen locally on the truck.”

Gatik has raised $115 million from investors, and Narang says more funds are in the pipeline. The company plans to grow aggressively, expanding its fleet threefold by the end of 2023, and reaching more locations in the US and Canada. But it will stay in its niche middle-mile segment, which Narang estimates to be a $250-billion market. “Growth and scale is what Gatik will focus on for the next 12-18 months. I strongly believe that middle mile is where the greatest opportunity lies and this will be the first application to be commercialized and scaled,” he says.

However, all the expansion, for now, will be limited to the US and Canada. Narang, who grew up in New Delhi, does not see any immediate potential for Gatik’s business to take root in India. “The driving environment is very unstructured and very complicated. I don’t expect driver-out autonomous vehicles to be commercially available (there) any time soon.”

In August 2021, Gatik launched the world’s first fully driverless commercial delivery service for Walmart in Bentonville, Arkansas. The company has travelled a long way since then, and the founders have their eyes firmly fixed on the road ahead.