The Future of Last Mile Deliveries: Mercedes Vision Van makes Logistics Look Cool

 A stylish couple eagerly anticipating their drone delivery.

A stylish couple eagerly anticipating their drone delivery.

 Source: Mercedes-Benz

Source: Mercedes-Benz

Mercedes Benz and Matternet, a drone technology start-up, have partnered to create an integrated vision of the future for urban deliveries. Mercedes showcased the concept cargo van at the IAA Commercial vehicle show in Hannover, Germany last week.

With the Vision Van from Mercedes-Benz Vans we provide an idea of future generations of vans: the intelligent automation technology connects the entire process, from loading and transportation by road through to delivery to the consignee,' said Volker Mornhinweg, Head of Mercedes-Benz Vans, in a statement.

The future, not all that surprisingly, is an electric vehicle with a range of 270 KMs (168 miles) combined with drones that make package deliveries. The Matternet M2 drones make the deliveries, drop off and reload packages, and swap batteries all without any human intervention. Drivers no longer need to spend time searching for packages and walking to drop off packages. The drones can track the van as it moves along the delivery route and the van acts as a launch and landing pad for the drones.

 Source: Mercedes-Benz

Source: Mercedes-Benz

The M2 drones can carry a payload of 2 Kgs (4.4 Lbs) and travel 19 Kms (12 miles) on a single charge which is perfect for last mile deliveries. The vehicle still requires a human driver, presumably to make deliveries for heavier packages or deliveries not suitable for drones. The van is autonomous and follows a pre-programmed delivery route, but the driver can take over if necessary.

While the van is flashy on the outside, it is extremely functional on the inside and serves as a highly efficient automated mobile distribution center. All packages are loaded onto the truck by a driver-less loading vehicle:

 Source: Mercedes-Benz

Source: Mercedes-Benz

One particularly eye-catching feature is that there are no doors on the truck other than the door for the driver.

 Source: Mercedes=Benz

Source: Mercedes=Benz

An onboard robotic shelving system automatically retrieves packages and hand-offs either to the drones through the roof or to the driver via a window in the cab. No more time wasted rummaging through the truck to find a package and no more human errors with picking up the wrong package.

 Source: Mercedes-Benz

Source: Mercedes-Benz

Solving the Drone Problem

Compared to delivery trucks, a drone’s fundamental flaw is the lack of route density inherent in a drone delivery network. Drones have to return to a home-base after each delivery, possibly many miles away, to pick up the next package. Parcel carriers, on the other hand, rely on route density to bring the costs of parcels down to $1.5-$2 by delivering hundreds of packages on an optimized “milk-run”. While Mercedes-Benz and Matternett’s collaboration includes just two drones, it's not a stretch to imagine a “swarm” of drones launching from a single truck which would effectively solve the last mile delivery problem. Imagine the efficiency gain in a scenario where 25-50 drones are launched from one truck. It's not a stretch to think that last mile delivery costs could be cut by 80% while at the same time improving service levels and opening all sorts of new business models that have not even been thought of yet.

The press release makes it clear that the vehicle is not intended to push humans out of work, but the concept clearly paves a path forward for a fully automated last mile delivery process for most deliveries. The human element is reduced to sitting in a van that he or she is not driving and handing off heavier packages that exceed the weight capacities of the drones. While the innovation creates improvements in route optimization and route density which reduces delivery costs, the more likely longer term scenario is that the driver will no longer be part of the equation and would only be required for edge case deliveries. And, it is not much of a stretch to imagine a future where additional functionality is incorporated into the van, such as 3D printing or ground based robots for heavier package deliveries.

This is also an interesting strategic play from an automaker who is evolving from a traditional vehicle manufacturer to a software company that builds intelligent and integrated hardware and software solutions into their vehicles. The technology required to transform the transportation industry finally works and can be widely delivered at a global scale and Mercedes are throwing their hats in the ring, but don't expect the Vision Van and accompanying drones to be delivering packages into your neighborhood anytime soon - it's just a concept, but not a far-fetched one.

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