In what may be a stunner to many within the trucking industry, a new report by the global logistics think tank McKinsey & Company predicts that semi- and fully autonomous commercial motor vehicles will be used in regular operations within the next decade. The five-part report on the near-term technological disruption in global logistics takes a hard look at autonomous driving technologies and how they will shape the trucking industry. <\/p>\n\n\n\n
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While the report<\/a> also looks at emerging technologies like analytics, e-Commerce, automation, asset sharing, and telematics, it is the analysis behind autonomous vehicles that stands to raise eyebrows. The report starts out by highlighting that two-thirds of all goods moved in America are moved by truck and that truck driving is one of the most common occupations in half of the United States. The report also notes that the trucking industry has experienced few major or structural changes in the preceding decades. <\/p>\n\n\n\n Yet, according to the report, autonomous trucks could signal\na big change to that paradigm. With companies already using autonomous trucks\nto complete beer deliveries and fleet agreements beginning to flesh out how the\nvehicles will be used; widespread adoption may not be far. And while we have\nreports in the past the truck drivers will still be needed for a long time to come,\nthe industry disruption remains on many levels. <\/p>\n\n\n\n Still, initial operations are in their infancy. And when\ncombined with an initial price tag ranging between $30,000 and $100,000, many\nare quick to dismiss the idea that these technologies are on the verge of\nbecoming incredibly popular with regular motor carriers. It is important,\nhowever, not to dismiss the march of technology. <\/p>\n\n\n\n How the Report\nDetails Change<\/strong><\/p>\n\n\n\n Should these technologies gain in popularity, it is likely\nthat adoption would come in two waves. It will start with two-truck platoons\nwith truck drivers operating each vehicle with Level 3 automation. We should\nsee these scenarios come to fruition between now and 2020. <\/p>\n\n\n\n Over time, as connected convoys mature, algorithms will be\ndeveloped in concert with advanced vehicle communications networks. This will\nlead to the second wave of automation in or around 2023. This second phase,\naccording to the report\u2019s authors, will include platooning on interstate\nhighways where a truck driver\u2019s intervention is not required. Of course, a\ntruck driver will still be in the vehicle, but they will not need to become an\nactive participant in operating the vehicle until it leaves the highway. <\/p>\n\n\n\n The report notes that at stage two, trucking companies could\nrealize fuel and labor savings of up to 10%. While 10% may not seem like a lot\nto the average person, this could be a big deal for smaller and medium-sized\ntrucking companies who work with lower margins. This transition will also\nrequire a lot of technological training and upkeep. <\/p>\n\n\n\n The next stage, according to the report, would be phase\nthree in 2026. This stage could see fully autonomous vehicles operating on all\nsegments of the interfaced highway system. It could even be that eventually,\ndepending on the weather and conditions, trucks could even be operating without\nnecessary intervention on regular roadways. Situations where vehicles could\noperate on roadways is called \u201cconstrained autonomy,\u201d technology. Once the\ntrucking industry has reached this level of adoption, trucking companies should\nsee up to 20% savings in fuel and labor costs. <\/p>\n\n\n\n Yet, the predictions don\u2019t end there. The report projects\nthat by 2030, fully autonomous trucks will be operating across state lines\nusing Level 5 full autonomy, requiring no human interaction at all. While this\nmay seem like a tall order, if trucking companies do end up reaching this goal,\nthey could see a whopping 45% reduction in operating costs related to fuel and\nlabor. <\/p>\n\n\n\n Fortunately, the report\u2019s authors still think that even at this phase, it will be a long time before autonomous fleets completely replace fleets operating with human intervention. Even fleets that attempt to go fully autonomous will have a hard time going fully driverless. The infrastructure and industry trust that must be placed in fleets of this type might not yet be fully realized. <\/p>\n\n\n\n <\/p>\n\n\n\n A Tale of Industry\nDisruption<\/strong><\/p>\n\n\n\n It is likely that however the autonomous vehicle rollout\nhappens, the ripple effect will be felt across more industries than just\ntrucking. Professional upheaval will happen all throughout the supply chain.\nFrom truck manufacturers to railroads, warehousing, distribution, and\nfulfillment centers to brokers, port operators and logistics companies, no one\nwill be spared the fallout that comes from massive technological change. <\/p>\n\n\n\n Still, the trucking industry itself will bear the brunt of\nthe change. There will be four distinct ways that this change will impact the\nindustry. While capital expenditures for fleets will rise, operating costs\nshould see a significant cut. Autonomous trucks should also help alleviate the\nindustry\u2019s ongoing capacity crunch. Could we even see a day when truck OEMs\ndiversify their business models and themselves enter the transport markets?<\/p>\n\n\n\n As well as the technology underpinning these changes works,\nhowever, there are many factors in play that will impact how quickly and how\nwidespread the technologies are adopted. It is important to consider basic\neconomic realities when discussing new technologies and tectonic industry\nchange. What might some of these economic realities be? And could they push the\nadoption and deployment of autonomous vehicles in an entirely unexpected way?<\/p>\n\n\n\n When it comes to changing the way things get sold and\ndelivered, Amazon has always been the elephant in the room. With Amazon\u2019s\nrecent announcement that they are raising wages for their employees to $15 an\nhour, they are likely to change the employment landscape, yet it is their entry\ninto the delivery market that is making waves. Might Amazon really get into the\ntrucking business to have more control over their logistics supply chain? If\nso, how will they handle technological disruption associated with autonomous\ntechnologies?<\/p>\n\n\n\n The news is already out that Amazon has been testing\nautonomous drones to deliver packages, so what other disruption do they have\nplanned? Just as fleets are beginning to boost pay and benefits packages to\nattract and retain top talent, Amazon\u2019s wage hike is likely to increase\npressure on fleets to pay out even more money. Might it be that the promise of\nautomation becomes far less resistible once the low water mark hits a $20 or\n$25 an hour equivalent? <\/p>\n\n\n\n The Flipside of the\nCoin<\/strong><\/p>\n\n\n\n There is still another side to the argument. The inability\nto attract qualified truck drivers is something that could easily be solved by\nvarying levels of automation. While you may think the reason for that is\nallowing companies to avoid using manpower altogether, the actual argument lies\nin attracting workers through technology. <\/p>\n\n\n\n Imagine being a Millennial looking for a good-paying fun\njob. Now imagine said Millennial discovers they could be at the forefront of a\nrevolution in trucking by operating an advanced big rig that can drive itself\non the freeway. Suddenly the \u201ctraditional\u201d field of trucking looks less like\nthe Rust Belt and more like Silicon Valley. <\/p>\n\n\n\n It is important to remember, however, that none of the\nevents mentioned have the ability to create truly tectonic changes within the\nindustry. What will drive the change leading to the various phases of\nautonomous development will be macroeconomic factors. It is important to never\noverlook the innate human desire to get the job done in the most expeditious\nand efficient manner as possible. <\/p>\n\n\n\n The questions surrounding autonomous implementation are\nplentiful. How will a self-driving truck get dispatched? If a self-driving\ntruck breaks down, what will be the responsibility of the truck driver? The\ntechnology is there, but what about the commitment to ensuring the technology\nis adopted in a way that benefits the industry?<\/p>\n\n\n\n There is a societal question at play here. There is more to this than just technology. Acceptance must come at all levels of society and government. Insurance companies have a huge part to play. The fact is, the promise of technological automation will transform industries far and wide, and it is already happening.<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n Plants in countries from France to China have embraced automation as a way to streamline operations and increase overall organizational efficiencies. At what point will trucking companies adopt a strategy<\/a> that embraces these changes? ELD adoption and telematics have already opened the door, but will fleets walk through it? As the government, society, and trucking companies wrangle with these questions, it will be a matter of time before we have the answers.<\/p>\n","protected":false},"excerpt":{"rendered":"
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