The Leader Magazine

SEP 2018

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40 September 2018 the leader The axiom that the world's largest taxi company owns no vehicles is no longer quite true! r etail Assessing the impact of AVs on current retail locations requires understanding shifts in customer behavior and perceptions of convenience, as well as existing changes to retail, including the rise of online shopping and the experience economy. Here are some examples: • An improved and more accessible driving experience is likely to extend catchment areas. This is based on a willingness of people to travel further, and the provision of enhanced mobility for those previously unable to drive, including the disabled and the elderly. • A lower cost of driving and parking might mean the reappraisal of the relative benefits of retail locations. The benefits of improved accessibility, potentially reduced congestion, and decoupling of parking from retail locations could benefit centrally located shopping destinations. • A reduction in the number of visitors parking onsite is likely to lead to a reduction in the amount of parking required. This freeing-up of land could offer opportunities for landlords to diversify land use onsite. An example for this would be providing additional amenities or selling land for residential development. • If online retail can harness new AV technology, the economics of home delivery might improve sufficiently to meet demand for online deliveries. Thus, the positive impact of AVs on retail locations will be tempered by the increasing popularity of online retail. l ogistics The use of automation in warehouse environments is not new; many companies use software applications for sorting or restocking goods. In contrast, current limits to dexterity of hardware (i.e., robots) and their high cost, in comparison to human labor, means such technology is not yet widespread and is primarily limited to assisting workers. However, there are reasons to suggest AVs will play an important role in logistics within the next five to 10 years. Urban logistics is expensive (50 percent or more of total supply chain costs in Europe), meaning that manufacturers, retailers, and third-party logistics companies are looking to technology to improve efficiencies and reduce costs. Investment by logistics companies in AV might also be prompted by changes to employment legislation, which could make existing courier systems less flexible and more expensive. City targets to reduce congestion could also mean a push for new solutions. A large proportion of logistics vehicles spend much of their time operating in more predictable environments, or "operation design domains," to use the SAE terminology. This makes partial and conditional automation of freight vehicles relatively achievable and desirable given the expected benefits of automated breaking, lane changing and cruise control on safety and fuel efficiency. Growing demand for online deliveries, in terms of scale, product lines, and customer services, means that companies are looking to innovative solutions to meet real estate and delivery infrastructure needs. One option is for delivery companies to invest in fleets of CAVs to replace delivery vans. This has the advantage of reducing labor costs and operating beyond the restrictions of working hours. Without a delivery worker on board, the proposed scenario is that these CAVs essentially operate as a set of lockers on wheels, allowing the customer to retrieve their goods by entering a code. As with passenger- carrying CAVs, it is feasible that such systems could operate within geographically defined areas within the next five years. However, the question of exactly how customers retrieve goods and whether a human

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