Ford to Partner With Walmart to Design Driverless Delivery Vehicles

Ford to have multiple compartments in its vehicle to ensure profitable and cost-effective deliveries to Walmart customers

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Nov 17, 2018
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The second largest U.S. automaker Ford (F, Financial), Walmart (WMT, Financial) and delivery service Postmates have come together to explore how they can make use of driverless technology to deliver food stuffs and other consumer goods to Walmart customers. In fact, Ford has already collaborated with national and local companies to look into how efficiently it can use self-driving systems to deliver products.

The company is currently testing driverless vehicles in Miami, and it is expected that it would start delivering Walmart items in Miami itself.

Walmart to use human-driven cars in the initial stage

Ford said that Walmart would initially make use of human driven vehicles to deliver goods to customers. This would help the company to make an assessment of how self-driving vehicles would perform in similar circumstances. Tom Ward, Walmart’s senior vice president for digital operations, commented:

“Before self-driving cars can go mainstream, we must get a better sense of how people want to interact with them.”

Key takeaways from Ford’s partnership with Walmart

The Michigan-based automaker would now work with Walmart to gather data relating to consumers’ preferences and would also look forward to the vehicles that would be needed to make transportation economically feasible. The vehicles that Ford is presently testing have multiple compartments so that the company can handle several orders. Brian Wolf, an executive of Ford's autonomous vehicle unit, commented:

“Through this collaboration, we are exploring how self-driving vehicles can deliver many everyday goods such as groceries, diapers, pet food and personal care items. Enabled by Postmates delivery as a service, we were able to quickly set up a pilot program that explores how our self-driving vehicles can complement Walmart’s existing delivery offerings. Since Postmates is already a partner of both Ford and Walmart, the companies are able to utilize Postmates’ infrastructure to get this offering up and running quickly.”

For Walmart, this collaboration can turn out to be fruitful considering stiff competition from Amazon (AMZN, Financial) and Whole Foods. Currently, Walmart is no match to Amazon’s fast home delivery to customers. This has led Walmart to search for affordable and best ways to deliver products to consumers. Sam AbueIsasamid, senior research analyst for Navigant, commented:

"For retailers like Walmart, it will be crucial to figure out how they'll be able to offer a better customer experience for automated deliveries, to basically find a way to survive and succeed in 21st century retail ... Developing these partnerships with Ford and Waymo and others is crucial, and they need to do it now to understand what's going to work and what's not going to work."

Last word

Ford, unlike General Motors (GM, Financial) and Tesla (TSLA, Financial), remains behind when it comes to development of autonomous vehicles. However, the company has now started making investing in the technology to compete well against other automakers. In July 2019, the Dearborn automaker would set up a new business unit known as Ford Autonomous Vehicles, to carry out its self-driving vehicle operations. The company, in fact, plans to put in $4 billion in the business unit through 2023.

Disclosure: I do not hold any position in the stocks mentioned.