Self-Driving Trucks to Cut Retailer Costs Up to 30%, Gatik CEO Says

Gatik will partner with transportation company KBX (a Koch Industries company) that 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 tractor trailer trucks that Georgia Pacific is currently using to deliver its paper goods to customers like Sam’s Club. The self-driving operations of the trucks delivering to Sam’s Club locations will begin in July 2022.

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

Why autonomous trucking is a big deal

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

“There is no other company that is providing this kind of service, which is 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 store replenishment for our customers. And this kind of differentiated value proposition is unique.”

This value proposition, as Narang calls it, actually is actually two-fold: it’s driving concrete improvements to the bottom line in terms of costs, while increasing product volume to stores. This all comes along the backdrop of the ongoing supply chain crunch and truck driver shortage currently plaguing domestic goods producers and retailers.

“Long-term, the aim is to help save up to 30% in the operating cost; more than that, it’s also about increasing capacity, increasing that high-frequency replenishment rate,” Narang said.

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

With the Georgia-Pacific deal in place, Gatik’s next move is to expand further across the country, and scaling up.

“This year and next year it’s about scaling and growth — we’re trying to get as many trucks on the road as we can with our partners,” Narang says. “Our technology was validated last year when we took [a driverless truck] out in a safe manner on a commercial route in Arkansas. The plan is to do that at multiple different sites with multiple customers this year and next.”