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FedEx Tests Self-Driving Deliveries With Start-Up Nuro Package delivery companies are looking to reduce costs of last-mile delivery.

By Euni Han

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

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FedEx is partnering with robotics company, Nuro, to deliver packages around Houston, according to Reuters.

The multi-year, multi-phase agreement follows a surge in last-mile delivery during the pandemic.

Last-mile refers to the last step of the delivery process from transportation hub to final destination; it's also the most expensive part of the fulfillment chain.

Related: Emerging Supply Chain Trends Entrepreneurs Need to Know About

The vehicles could improve efficiency for handling remote locations and late-night pickups.

Nuro's Head of Partnerships, Cosimo Leipold, says the slow-moving units will offer cost-savings by providing "the biggest bang for your buck."

FedEx's Vice President for Advanced Technology and Innovation, Rebecca Yeung, says the "serious, long-term commitment" aims to reduce problems, not workers.

Related: IKEA, Lenovo Among Businesses with Products Still Stalled in the Suez Canal

"Instead of dispatching a driver to get those packages," she explained, "a device like Nuro could be super helpful."

The company's unmanned vehicles are already making deliveries in the Houston area for grocery chain Kroger and Domino's Pizza.

The Mountain View, California-based Nuro, which was founded in 2016, says the pilot program with FedEx has already started, and hopes the partnership will eventually lead to large-scale deployment for the logistics giant.

Related: Retail Will Never Go Back to Normal

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