EYE on RETAIL: Kroger rolls out autonomous trucks

The Kroger Co. is moving beyond pilot stage with using driverless trucks in the “middle mile” of its fast delivery operation.

In March 2023, the grocery giant began testing class 3-7 box trucks from autonomous vehicle supplier Gatik AI Inc. into the “middle mile” of one of its next-generation fulfillment networks. (The “middle mile” of the supply chain is where goods travel between warehouses or from a warehouse to a “last mile” pickup point.)

The medium-duty autonomous trucks transported fresh products from a Kroger customer fulfillment center (CFC) in Dallas to multiple grocery stores in that market. Based on successful results of this pilot, Kroger and Gatik are launching a multi-year commercial collaboration that will continue using driverless trucks to transport fresh items from the Dallas CFC to area stores.

During the past eight months of the pilot, Gatik has safely and consistently made delivery runs multiple times per day, seven days per week across Kroger’s Dallas distribution network. According to Kroger, these operations have increased the speed, responsiveness, and frequency of fulfilling its e-commerce orders.

“Kroger is committed to creating a seamless shopping experience for our customers – whether that’s through home delivery, a store pick-up or shopping in the store, and our collaboration with Gatik enables us to continue and enhance that experience,” said Ben Hamilton, VP, logistics and engineering network strategy at Kroger. “What has always been important to customers is that they get what they need on time. But what we have seen through this collaboration is that as important as it is to be on time, it is also really important to have good customer service. With Gatik’s autonomous box trucks, we are able to be quicker with our deliveries, and focus more on the customer service side of things, which ultimately leads to happier customers and repeat customers.”

Kroger’s fast delivery model explained

The CFC model is based on a partnership between Kroger and U.K.-based online grocer Ocado Group, Introduced in 2018, the partnership leverages a fast delivery “hub and spoke” model relying on a leading-edge automated warehouse concept known as a customer fulfillment center (CFC).

The CFC model combines vertical integration, machine learning, and robotics with affordable and fast delivery service for fresh food. CFC facilities leverage proprietary technology solutions focused on artificial intelligence (AI) and advanced robotics and automation to create more seamless and efficient fulfillment, picking and delivery capabilities for enhanced digital commerce.

CFCs serve as hubs for the flexible, vertically integrated Kroger Delivery network, which also includes smaller automated facilities and spoke locations. In CFCs, more than 1,000 robots traverse giant 3D grids, orchestrated by proprietary air-traffic control systems in the unlicensed spectrum. The grid, known as The Hive, contains totes with products and ready-to-deliver customer orders.

As customers' orders near their delivery times, the robots retrieve products from The Hive, which are presented at stations for items to be sorted for delivery via an algorithmic sorting process. For example, fragile items are placed on top, bags are evenly weighted, and each order is optimized to fit into the fewest number of bags, reducing plastic use.

Once completed, orders are loaded into a temperature-controlled Kroger delivery van, which can store up to 20 orders. Machine learning algorithms dynamically optimize delivery routes, considering factors like road conditions and optimal fuel efficiency. Drivers may travel up to 90 miles with orders from facilities to make deliveries.

Based in Cincinnati, Kroger operates 2,800 stores, including more than 100 stores in Southeast Texas and Louisiana, under a variety of banners across the U.S., including Kroger, Fred Meyer, Ralphs, Dillons, Smith's, King Soopers, Fry's, QFC, City Market, Owen's, Jay C, Pay Less, Baker's, Gerbes, Harris Teeter, Pick 'n Save, Metro Market, and Mariano's.

(This article originally appeared on HBSDealer's partner site, ChainStoreAge.com.)