Self-Driving Trucks to Cut Retailer Costs by Up to 30%, Says Gatik CEO [Video]

This week, self-driving trucking and logistics company in the “middle mile” Gatik announced a multi-year agreement with paper-based products company Georgia-Pacificto use its driverless trucks to deliver items such as toilet paper and paper cups to 34 Sam’s Club (WMT) locations in the Dallas-Fort Worth area.

Gatik will partner with transportation company KBX (a Koch Industries company) which Georgia-Pacific currently uses to automate this part of the transportation network.

Gatik uses Class 6 trucks with 26-foot boxes that are smaller than the traditional Class 8 semi-trailer trucks that Georgia Pacific currently uses to deliver its paper products to customers like Sam’s Club. Self-driving truck operations delivering to Sam’s Club locations will begin in July 2022.

“Once proven, we believe self-driving deliveries will allow us to remove cost and complexity from the supply chain so we can better serve Sam’s Club and [its] members,” said Hayes Shimp, vice president of sales for Georgia-Pacific, in a statement.

Why Autonomous Trucking is a Big Deal

Gatik Class 6 Autonomous Van Truck

Gatik CEO Gautum Narang explained the importance of replacing traditional trucks with Gatik’s autonomous fleet in an interview with Yahoo Finance on Wednesday.

“No other company provides this type of service, namely trucks minimizing the segment of the supply chain, which at a high level is long-haul trucking,” Narang said. “We provide something that enables high frequency deliveries, high frequency in-store replenishment for our customers. And that kind of differentiated value proposition is unique.

This value proposition, as Narang calls it, is actually two-fold: it drives tangible improvements in the bottom line in terms of costs, while increasing the volume of products in stores. All this takes place in the context of the continued tightening of the supply chain and shortage of truckers currently afflicting domestic producers and retailers of goods.

“In the long term, the goal is to save up to 30% on operating costs; more than that, it’s also about increasing capacity, increasing that high-frequency replenishment rate,” Narang said.

A driverless Gatik delivery truck operates in Bentonville, Arkansas, U.S. in this photo taken October 2021 and obtained by Reuters May 18, 2022. Gatik/Handout via REUTERS THIS IMAGE HAS BEEN PROVIDED BY A THIRD PARTY.  COMPULSORY CREDIT

A driverless Gatik delivery truck operates in Bentonville, Arkansas, U.S. in this photo taken October 2021 and obtained by Reuters May 18, 2022. Gatik/Handout via REUTERS THIS IMAGE HAS BEEN PROVIDED BY A THIRD PARTY. COMPULSORY CREDIT

Currently, Gatik works with Walmart, the parent company of Sam’s Club, on using five self-driving trucks to deliver goods in Arkansas at nearby Walmart stores. Two of these trucks are fully autonomous (meaning no safety driver) and operate seven days a week between a Walmart fulfillment center and the nearby store.

With the Georgia-Pacific agreement in place, Gatik’s next step is to expand further across the country and grow.

“This year and next year is all about scaling and growing – we’re trying to get as many trucks on the road as possible with our partners,” says Narang. “Our technology was validated last year when we took [a driverless truck] safely on a trade route in Arkansas. The plan is to do this at several different sites with several clients this year and next.

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Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on instagram.

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