The Decibel - Loblaw’s driverless trucks hit the road

Episode Date: October 13, 2022

There’s an experiment under way on the roadways around the Greater Toronto Area. Loblaw Companies Ltd. has partnered with autonomous vehicle company Gatik and is using five driverless delivery trucks to ship products around. And since August, they haven’t had a human ‘safety driver’ on board.The Globe and Mail’s retail reporter Susan Krashinsky Robertson discusses how the technology for these driverless trucks works, why Loblaw is investing in the technology and what this means for shoppers and the grocery industry in Canada.Questions? Comments? Ideas? E-mail us at [e-mail]

Hi, I'm Manika Raman-Wilms, and you're listening to The Decibel, from The Globe and Mail. Supermarket giant Loblaw has put driverless trucks that use artificial intelligence on the streets and highways around Toronto. I think a lot of people would be really skeptical about this. It's a little freaky. Susan Krishinski-Robertson is the Globe's retail reporter. She has the details on this pilot program and how automation and other technology is making its way into the supermarket supply chain. This is The Decibel. Susan, thank you so much for chatting with me today.

Thanks for having me. It's really nice to actually finally have you in the studio and get to talk to you in person. Well, this is great. I think we should just start with, you know, the basics here. First, this is a little confusing because Loblaws is the supermarket and the company that owns it is actually called Loblaw, singular. But anyways, more importantly, where is this driverless truck test actually happening, Susan? Like, where am I going to be driving down the road and turn to look next to me and see a truck without a driver there? Yeah, so this has actually already been happening for a little while. And

Loblaw is testing this technology basically in Toronto and its surrounding suburbs. So think Mississauga, Brampton, Peel region, and then the city itself. This could be on local roads, but also on highways. Okay. And this, to be clear, like this is not customer facing stuff, right? Customers are not going to be getting deliveries from a driverless truck? No, a robot will not be bringing you your groceries anytime soon. Basically, what Loblaw is testing here with this California-based tech company called Gattic, which built the technology, they're testing driverless delivery for what they call the middle mile. And for non-industry people, just what that means is shuttling products between these sort of miniature distribution centers that Loblaw operates and stores around the city. And

what they're doing this for is basically to speed up that middle point of their supply chain. So this isn't long haul trucking, and it's not the trucks that bring stuff to your door. It's the stuff in the middle. What do these trucks actually look like? They're pretty small. So they're not the big semis. They're kind of these smaller box trucks, similar size to if you've ever seen a delivery truck from one of Loblaw's competitors on the roads like Metro or Voila, which is owned by Sobeys. It's around the size of one of those smaller trucks, and they are the ones that are moving this product around. And inside, I imagine they have some kind of computer,

like the technology that's working here. What does that look like? In the inside of the cab, in the middle of the passenger and driver seats is this black box that houses basically this computer that powers the whole thing. And then around the outside of the truck are a bunch of sensors, which help this technology to operate. And Gaddick says that one of the steps they've taken in a bid to make this safer is that they have more than one

type of sensor. So they've got six radar sensors on every truck, a bunch of cameras, and then they also have these LIDAR sensors. LIDAR means laser imaging detection and arranging. And basically just what that means is they've got three different kinds of sensors all looking around the truck to pay attention to objects, cars that might stop in front of it, people that might cross in front of it. And Gaddick argues that because they're not relying on any one thing, they're not just relying on cameras, they're not just relying on radar, that it's a safer technology overall. Okay, so the truck has a bunch of these radars, cameras, all these different sensors. And so I guess it's equipped with those sensors to figure out like the angle it needs to turn at or how fast it goes. Is that the idea there?

Yeah, the technology is programmed. So these trucks actually never drive over the speed limit. But you're right. If there's traffic, it's going to slow down. If there's an obstruction on the road, it's going to come to as gradual a stop as it can. If there's something to steer around, that's what those sensors help with. What happens if something goes wrong on the route? What happens if there's an obstacle that is not normally there? What does the truck do? The truck is programmed to pull over to the side of the road to come to, as I mentioned before, as gradual a stop as possible. So in every situation, if it's not an emergency, the tech is programmed not to slam on the brakes because that can be dangerous too.

But it's programmed to pull over. And then when the truck does this, it contacts the remote supervisor. That person can assess the situation and make sort of a high-level decision about what the truck does next. It's important to note that that remote supervisor is never driving the truck remotely. So they never actually take over control, but they will communicate with the tech and say, here's what to do next. And how does the truck know where it needs to go? So the middle mile is a little different than what you might have heard about things like robo-taxis, which would be navigating city streets in real time, a different route, theoretically, every time.

What Gaddick says is that they program these trucks to follow a predictable route every time. And what's interesting here is actually these trucks have already been on the road using this driverless technology for a couple of years now. So Loblaw and Gaddick started testing this back in 2020. What was different for the first couple years of the test, though, is that they had what they call a safety driver, just a human being present in the driver's seat, there to take the wheel if need be, there to step on the brake if need be. And that safety driver is what they say assists their technology in learning that route over thousands of trips. So by the time they take the human out of the driver's seat, the tech has a lot of practice. So it's not like

calling up a taxi without a driver, where that taxi is learning its route as it goes. Right. Okay. So I guess what Gaddick would say then here, it sounds like it's a little bit easier maybe for the technology to learn a single route over time, as opposed to learning a new route every time a passenger gets into a driverless taxi. Is that the idea? That is their argument. Yeah, the CEO of Gadek basically said to me that he believes these other companies are trying to, quote unquote, boil the ocean, basically solve too many problems at once. And they say that in the two years of those initial tests, they made over 150,000 deliveries with five trucks. That's how many Loblaw has been using

in this test so far. And they say that they never had a safety-related incident. What about insurance, Susan? Insurance can be crazy expensive. And I would imagine for a truck without a driver on the road, that's got to be something that these companies are thinking about then. There's obviously a lot of implications for what it means to insure a vehicle without a human actually operating it. Gaddick says that it works closely with Intact Insurance, which is its insurance provider. What we don't know, though, is what that insurance actually means. How do you determine fault in an accident if there is nobody in the cab? So there's a lot of questions still to be answered about that as this technology spreads.

Okay, so there are five trucks out there without drivers. So there is a possibility, like I started with, like you could look over and see one of these delivery trucks without a driver then in the seat. Yeah, and what's interesting is actually that's been the case since August. They received approval to do this without a driver in the driver's seat from Ontario's Ministry of Transportation back in April, started taking the drivers out in August, and they've just disclosed that now. So it's actually already been happening on the roads, and people may not have known that. One of the reasons, by the way, that people may not have known that is that Ontario's Ministry of Transportation is not super transparent about this. There's no press release that goes out when Loblaw starts taking these drivers out of these

trucks. And in fact, when I was writing this story and I contacted the ministry to ask them, A, to confirm that they did indeed provide special approval to GADEC to do this test without drivers, and B, to ask them how many other companies are doing this, how many other vehicles like this might be out there on Ontario's roads right now. They wouldn't answer that question and told me to file a freedom of information request. So the Ontario government is holding back information about how many tests like this are going on under this pilot project that they've created under their Highway Traffic Act, under the laws that allow vehicles to operate on roads.

Have you gotten any indication, obviously, if you're not getting answers, it's difficult to maybe speak to this, but have you gotten any indication of why they wouldn't want to be upfront about that information? No, they gave me no indication of that. They simply refused to answer the questions. What about this company, Gattic? Is this the first time they've got vehicles on the road in this capacity, or have they actually done something like this elsewhere as well? No, they've done something like this in Arkansas, actually, with another massive retail partner that you might have heard of, Walmart. So they've been testing this with Walmart already. And they actually reached that step of taking the human out of the driver's seat with Walmart last year. It's interesting to talk about this because this

seems like kind of, you know, brave new world that we're getting into here. And I think it's fair to say that some people might be pretty skeptical about the safety of autonomous vehicles. People have died before, of course, there was that crash back in 2018 when a self-driving say that some people might be pretty skeptical about the safety of autonomous vehicles. People have died before, of course, there was that crash back in 2018 when a self-driving Uber killed a woman. And earlier this year, another self-driving trucking company, Too Simple, did have a crash in the States. Nobody was hurt. What assurances have Loblaw and Gaddick actually given the public that these vehicles aren't a concern? Yeah, no, I think you're absolutely right. I think a lot of people would be really skeptical about this. It's a little freaky, right? And when I was talking to Loblaw's chief technology

officer, I asked that question. I said, you know, you're one of the first companies, you're among the first companies to be sort of out there publicly testing this. And, you know, people are worried about the safety of that. Now, one of the things that Loblaw did before it started taking that safety driver out of these trucks is commission a third-party safety review from a technology services firm, a global firm, which looked at not only the driving technology itself, but also the IT security of the system. And that third-party review endorsed GADX technology. That's not to say that these concerns disappear. I think people still are a little worried,

and I think that's why one of the things Loblaw is trying to do is say, we've done a lot of tests. We've done thousands of routes. We are taking this slow. It's only five vehicles so far. But it's going to be an adjustment. And I think one of the things, too. So we need the regulators and government to also be transparent about the public. It would be great if there was a place that any Ontario citizen could go to look up,

say, who's operating these vehicles? Have there been any accidents? How many and where? That kind of transparency, I think, would maybe address some of the concerns because in a vacuum of information, there's nothing left but for people to be worried. We'll be right back. These trucks in southern Ontario, these trucks have Loblaw branding all over them. The company is putting their name behind it. And this could be risky. This is still a test. Why have Loblaw branding all over them. The company is putting their name behind it. And this could be risky.

This is still a test. Why does Loblaw think that this test is worth that risk? So when I spoke with Loblaw's chief technology officer, what he said to me is that this innovation is coming to the industry. It is coming. That's not a question in his mind. And so what this does is, A, it puts Loblaw out front of that innovation, but it also helps speed things up in a response to customer demands that have really been shifting. part of the overall grocery industry in Canada. But the proliferation of ways that people shop and the immediacy of their demand means that according to Loblaw, they need to get faster and more efficient about how they manage the inventory from store to store to make sure

those products are where they need to be when they need to be there. So if they've got these trucks going back and forth more times a day, they've got more of that reliability on where things are. I think it's also worth noting, though, that, you know, Loblaw and Gaddick also have a very close relationship. So Loblaw's controlling shareholder, the Westin family, actually has an investment in Gaddick through its investment arm, Whittington Ventures. This is a very interesting point.

Absolutely. Yeah. So the company announced when it closed its, that's US dollars, $25 million Series A funding round in late 2020. That was led by Whittington Ventures and Innovation Endeavors as well. And Whittington also participated in Gaddock's last $85 million Series B funding round. So the Westons have invested in this and Whittington Ventures works with Loblaw. They're an arm's length company. They're two different companies, but they do collaborate on technology quite a lot.

Again, their CTO told me, they'll sometimes take technology to Whittington to ask, you know, what does the future of this tech look like? Is this worth looking at for our retail operations? Whittington might bring them things. So this is something where they have that kind of relationship to think about the way that technology will start to shape their retail operations in the future. Yeah. So you mentioned that, you know, Loblaw, the gamble here is the immediacy that they're trying to generate for their customers to do things faster here. So just beyond the driverless trucks, what else is the company doing to kind of work on this on-demand pressure that they're

getting from customers? Yeah, it's a really good question. Another thing that happened this week, actually, is that Loblaw announced that they've expanded this partnership that they just struck in the summer with DoorDash. DoorDash is, of course, that third-party delivery company that people might know most for restaurant takeout orders, right? DoorDash has been expanding much more into partnering with retailers, including grocery retailers. And that happens in a few different ways. So Loblaw stores, many of them, are now on the DoorDash platform. So you could order from a Loblaw store the way you might order from your favorite pizza place, for example. But also DoorDash drivers are now powering many of the deliveries that customers make even on Loblaw's own PC Express e-commerce platform.

And the third thing that they did actually this past summer is they launched a new program to start offering delivery in 30 minutes or less in many cases, this extremely rapid delivery service, which is a side of the grocery industry that's been growing a lot. There are a lot of startups trying to compete in super fast delivery.

So Loblaw is also testing that out. And when I spoke to Loblaw president Galen Weston this week, what he said is you can expect to see them doing more partnerships with companies like DoorDash as they look to expand sort of their technology know-how and the technology initiatives that they're working on. These things that Loblaws is doing, they're taking on these initiatives kind of about how tech is being used in different ways now in this sector. And the company, I would imagine,

is making these decisions because it's more economical for them. So is that actually the case, Susan? Can you spell out how this actually saves the company money? Yeah, it definitely does save them money, right? So now, again, Loblaw's chief technology officer said that this is really not a labor-saving play for them. Take that as you will. But Gaddock does also say that, yes, these trucks are cheaper to operate than a truck with a human driver. And Gaddock's CEO told me this week that as the labor crunch has increased, you know, we've all heard about the difficulties with keeping up with labor,

particularly in the transportation industry. As that has increased, the demand for this technology has really ballooned. Do you have any sense of the size of the impact that this has on the jobs in the grocery sector? We don't have a sense of that yet of the impact that this has on the jobs in the grocery sector? We don't have a sense of that yet because this is still really early days, right? If you think about it, Loblaw's overall logistics operation in Canada is humongous. So five trucks is really not making much of a dent in that at all right now. But automation in general is having a major impact on retail operations across the country, and that's not just the case for Loblaw. Many of Loblaw's competitors, Metro being a great example,

have been investing in rolling out more of these self-checkouts. That's a great example of automation right there. Automation isn't just fancy robots. It's also technology that we're all used to seeing every day to varying degrees of annoyance depending on how much you like self-checkouts, right? Automation is also being used much more often in distribution centers, the warehouses where these products are housed because those warehouses now have to speed up their operations so much more

to keep up with the speed of e-commerce. And that's all because customer expectations are changing. People are expecting things so much faster, so much more at their fingertips. And so retailers are really racing to keep up with that. Susan, thank you so much for taking the time to speak with me today. Thanks so much.

That's it for today. I'm Mainika Raman-Wilms. Our producers are Madeline White, Cheryl Sutherland, and Rachel Levy-McLaughlin. David Crosby edits the show. Kasia Mihailovic is our senior producer, and Angela Pichenza is our executive editor. Thanks so much for listening, and I'll talk to you tomorrow.