Cleveron’s PackRobot Set to Enter the US Market
Text by Life in Estonia. Photos by Cleveron.
With Cleveron signing the co-operation agreement with the US technology enterprise Bell & Howell, 15 000 PackRobots produced in Viljandi are due to reach the United States within five years.
In less than ten years of existence, the Viljandi-based company Cleveron has become a leading producer of parcel terminals and robots in the world. Its success is based on continuous development work, a strong team and the belief that good ideas can be transformed into reality. In the early years, the company took out a loan, assisted by KredEx − a financing institution which helps Estonian enterprises develop more quickly and expand more safely into foreign markets, offering loans, venture capital, credit insurance and guarantees with state backup. Today, the company plans to bring 15 000 innovative PackRobots onto the US market in collaboration with the US technology enterprise Bell & Howell.
Cleveron was born out of the online home decoration company ON24. Arno Kütt, Managing Director and one of the owners of the company recalls that in 2006, ON24 created its own logistics unit in order to serve better its customers, and two-member delivery teams started to make home-deliveries of furniture all over Estonia. Soon, other online shops began to approach them with the wish to create an alternative for the post-office. However, it was clear that yet another manned post-office would have been impractical. Hence the search was on to develop a self-servicing solution for a post-chain.
‘This is how the idea of parcel terminals was born. There were no suitable automated parcel terminals on the market and therefore we had to start developing them ourselves,’ says Kütt. The first technical solutions were ready in 2007 under the name of SmartPOST, but when the network together with this brand-name was sold to the Finnish Post, the company changed its name to Cleveron.
As automated parcel terminals were not a transferable guarantee for the bank, there was a need to for an additional KredEx security in order to take out an investment loan to promote their development. KredEx saw the potential of the company and offered a loan surety financed by the European Regional Development Fund (ERDF). According to Kütt, there are approximately a hundred companies in the world which deal with the development of automated parcel technology, and about ten of these can be considered serious competitors for Cleveron. There are many nuances which need to be taken into account in this field. For example, one of the most costly aspects in the automated parcel business is renting shopping centre space. The more parcels which can be stored within a one square metre area, the lower the cost of depositing them. This is the underlying principle taken into account by Cleveron in developing its parcel terminals.
Kütt explains: ‘One new solution we created is the introduction of small drawers in parcel terminals. According to statistics, parcels are becoming smaller and therefore parcel terminals also need smaller storing spaces. We planned to do just that, but realised the problem that a smaller cupboard can be created but it is difficult to fit a hand in there and to reach the parcel. We solved the problem by creating self-opening drawers. As a result, we can fit 50 per cent more parcels within one square metre.’
Kütt believes that Cleveron is among the leading automated parcel terminal producers in the world today. ‘We did not create parcel terminals as such but we have introduced several changes which have been subsequently taken onboard by competitors. Modular parcel terminals were developed here. Now competitors are using analogous solutions. I have not seen parcel terminals with drawers anywhere else yet. Of course, we have patented most of our innovative solutions in order to protect them. But some of our products have indeed been copied without permission,’ he says.
Today most of the automated parcel terminals produced by Cleveron can be found in Finland where they number almost 500. The technology is also used in Spain, Hungary, Norway, Russia and, the furthest location to date, Brazil. Estonian citizens use Cleveron terminals on a daily basis via the services of SmartPOST.
Arno Kütt explains that their products are in constant development: ‘Development is a process which does not end with the finished product. There is always room for improvement. Often every new batch is slightly different than the one before.’
From parcel terminals Cleveron moved onto developing parcel robots. This was also due to a practical need. ‘We began the development of PackRobot, which was completed last autumn, already five years ago. We have created more than five different prototypes. One of the robots has been tested in the SmartPOST network in Viljandi for a year, and it is only now that through continuous development we have reached a product which we can sell. The main emphasis this year has been on bringing PackRobot to the market,’ Kütt goes on.
In an ordinary parcel terminal, the customers can reach parcels which are stored to a maximum height of 1.5 metres. We were faced with the challenge of how to store parcels higher. As a solution, we envisaged a parcel robot and a door where users can insert and take out parcels. Inside the parcel terminal there is a robot, which takes the parcels up to a height of three or four metres and, if necessary, brings parcels down from the same height. Another challenge which we found a solution for is taking PackRobot into outdoor conditions. As a result, customers can receive their parcels 24/7. Bringing PackRobot outdoors had its own set of challenges − regardless of the location of the robot, parcels cannot be allowed to freeze inside in winter or conversely we can’t have things like chocolate start to melt in the summer heat. Therefore we needed to add a climate control appliance to the robot − if necessary, we heat the interior and if necessary we cool it and remove any humidity,’ Kütt says, shedding light on the complicated life of PackRobots.
Cleveron’s thorough and successful development work has led to the signing of a collaboration agreement with the US technology company Bell & Howell in September.
The US company has publicly announced that they see the potential of installing 15 000 PackRobots produced in Viljandi all over North-America. It is important to note that the robots will reach the American market under Cleveron’s own brand name.
When the collaboration contract becomes effective, there will arise a need to enlarge the factory space and to hire more staff. The production of these robots, unique in the world, will commence at the beginning of next year. .As we have built up our production base from scratch, we do not see any huge problems in expanding. We have already considered the likelihood of expanding when we built the current factory,A comments Kütt. The price of one PackRobot produced by Cleveron will be comparable to a more expensive German car, because it is made up of thousands of components and in additionally the hardware includes unique software. Whilst the major contract has been signed with a US company, the first robots will be installed in Estonia. This process will begin in the first half of next year.
Development work at Cleveron takes place in different directions: as a new product, the electronic storage locker has just come onto the market. The first was installed in Tallinn Viru Shopping Centre last October. Customers can leave their suitcases or purchases in the locker and visit the centre without carrying their heavy bags. What is innovative about the solution is that payment can be made with a bank card or mobile instead of coins. Customers receive a code via a text message to their phone, and later when they want to get their things, they insert the code to open the locker.
Currently the development team is working on developing a robot with cooling zones meant for the delivery of food produce. Work is also in process on the landing area and hanger for a drone which is to be integrated with the ceiling height of the robot. Hence the company believes that in the future there will be drones delivering parcels in addition to robots.
Parcel terminals from the first generation revolutionized the postal sphere by freeing people from the burden of having to stand in lines in postal offices or waiting for couriers. All prerequisites needed to repeat the revolution of comfort and effectiveness in the postal sphere are fulfilled by PackRobot.
The first PackRobots manufactured by Cleveron have reached the bigger cities of Estonia and serve the customers of Collect.Net, the newly-established open network. Nobody is thinking about resting on their laurels at Cleveron, however. Every day, work is in progress on finding new markets and partners, confirms Kütt. We are looking for direct contacts, visiting trade fairs and introducing our PackRobot. In addition we have agents in different countries working on sales,’ he says.