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Month: July 2016

The driverless truck is coming, and it can eliminate up to 1.6 M jobs

A convoy of self-driving trucks recently drove across Europe and arrived at the Port of Rotterdam. No technology will automate away more jobs — or drive more economic efficiency — than the driverless truck.

Shipping a full truckload from L.A. to New York costs around $4,500 today, with labor representing 75 percent of that cost. But those labor savings aren’t the only gains to be had from the adoption of driverless trucks. Where drivers are restricted by law from driving more than 11 hours per day without taking an 8-hour break, a driverless truck can drive nearly 24 hours per day. That means the technology would effectively double the output of the U.S. transportation network at 25 percent of the cost.

technology would effectively double the output of the U.S. transportation network at 25 percent of the cost

The savings become even more significant when you account for fuel efficiency gains. The optimal cruising speed from a fuel efficiency standpoint is around 45 miles per hour, whereas truckers who are paid by the mile drive much faster.

In addition, once the technology is mature enough to be rolled out commercially, we will also enjoy considerable safety benefits. This year alone more people will be killed in traffic accidents involving trucks than in all domestic airline crashes in the last 45 years combined. At the same time, more truckdrivers were killed on the job, 835, than workers in any other occupation in the U.S.

Driverless Truck is Here

Driverless Truck is Here

Even putting aside the direct safety risks, truck driving is a grueling job that young people don’t really want to do. The average age of a commercial driver is 55 (and rising every year), with projected driver shortages that will create yet more incentive to adopt driverlesstechnology in the years to come.

While the efficiency gains are real — too real to pass up — the technology will have tremendous adverse effects as well. There are currently more than 1.6 million Americans working as truck drivers, making it the most common job in 29 states.

The loss of jobs representing 1 percent of the U.S. workforce will be a devastating blow to the economy. The benefits from adopting it will be so huge that we can’t simply outlaw it. A 400 percent price-performance improvement in ground transportation networks will represent an incredible boost to human well-being. Where would we be if we had banned mechanized agriculture on the grounds that most Americans worked in farming when tractors and harvesters were introduced in the early 20th century?

 

TechCrunch,  April 2016

Long haul share shrinks and automation grows

Oakville, ON – Volvo Trucks North America sees long haulers accounting for a shrinking portion of the truck market, as the industry responds to pressures including a driver shortage and recent upgrades to the Panama Canal. Magnus Koeck, vice president – marketing and brand management, says that share has dropped to about 43% of the marketplace compared to 50% last year. In contrast, regional haulers account for about 35%  of the market as more freight is regionalized, he said during a briefing for industry media, adding the impact will be “proportionally a little larger” in the U.S. than Canada. The recently opened $5.4-billion upgrade to the canal will also allow the passage of neo-Panamax ships, which can carry 14,000 containers at a time. Many U.S. ports along the east coast of the U.S. are already expanding to accommodate them.

New Panama Canal Putting pressure on Long Haul

It isn’t the only shift he expects. Koeck also said that manual transmissions will completely give way to automation in just five years. Volvo has certainly seen a widespread adoption of its I-Shift Automated Manual Transmission, which is now spec’d in 88.8% of its trucks. While vehicle dynamics are changing, the North American market itself continues to struggle when compared to the near-record sales of 2015. Volvo expects 250,000 Class 8 trucks to be sold this year. Blame factors including large inventories at dealerships, created when manufacturers continued to produce high volumes of equipment even as the market began to slump.

Today’s Trucking, June 2016

 

Tractor-trailer involved in first self-driving car death

WASHINGTON, DC — Tesla is calling the first U.S. self-driving car fatality where a Model S drove partially underneath a turning tractor-trailer rare.

The U.S. government says it’s investigating the design and performance of Tesla’s system, which failed to recognize the tall, white trailer against the bright Florida sky. Early reports from the National Highway Traffic Safety Administration allege that the Model S driver was traveling down a highway with Autopilot engaged when the truck pulled across the roadway from a perpendicular street to make a turn in the opposite direction.

Tesla-crash-windscreen-under-truck

The May 7 crash is the first known fatality in just over 130 million miles where autopilot was activated, Tesla said in a June 30 statement.

Tesla said further that, “The high ride height of the trailer combined with its positioning across the road and the extremely rare circumstances of the impact caused the Model S to pass under the trailer, with the bottom of the trailer impacting the windshield of the Model S. Had the Model S impacted the front or rear of the trailer, even at high speed, its advanced crash safety system would likely have prevented serious injury as it has in numerous other similar incidents.”

Brakes were not applied by the driver or the car’s sensors, Tesla said. The truck driver has not been charged.

Uber, Amazon and the Sharing Economy

Despite all the talk of the “Uberization” of trucking and tons of venture capital poured into startups that promise cheap same-day delivery, companies like FedEx and UPS aren’t likely going anywhere soon — but Amazon has been and will continue to be disruptive to the logistics business.

Metzler’s definition of the sharing economy is where on-demand companies aggregate demand online but fulfill that demand through offline services. The classic example are on-demand ride-sharing services such as Uber and Lyft, where you use an app to get a ride-share instead of a traditional taxi service. Today, we are seeing the “Uber of everything,” he said, from companies such as Amazon, Google andless-well-known operations such as Deliv, TaskRabbit, and Shyp.

 

Uber and Trucking

Uber and Amazon both tapped into “latent demand” — a demand for something that consumers sort of didn’t even know they had until someone pointed out it was possible. “I think Amazon Prime will go down in history as one of the most brilliant combinations of marketing and logistics ever,” Metzler said. “They created the need for speed that leaves others trying to catch up.”

The e-commerce giant Amazon, with its Amazon Prime subscription service that includes free two-day shipping, has helped make the notion of free, fast shipping “table stakes” Metzler said. He questioned how much consumers really want same-day or even one-hour delivery from their e-commerce purchases — or if they want it enough to pay enough for delivery companies to be able to turn a profit doing it.

Metzler cited a “Future of Retail” study that found free shipping was two times more important to consumers than same-day shipping — 88% vs. 49%.

Looking ahead

When the dust settles what are the likely outcome? Metzler outlined five distinct possibilities.

  • The Amazon effect. Buyers come to expect 1-2 hour service via a high-level Amazon Prime subscription level and can’t live without it.
  • Reality sets in. Delivery times become more reasonable and largely free, consistent with consumer demands and expectation.
  • Go big and go home. Large format online e commerce is beginning to grow at a runaway rate — things like gun safes, large appliances, pieces of furniture. Right now consumers essentially  have “white glove” service where such items are delivered and installed, or what Metzler dubbed “brown glove,” with LTLs delivering items. He believes we will see more cost-effective solutions in between these two.
  • Drones and driverless trucks. This is not a question of if, but when and how, he said. It’s easy to get your mind around drones for super urgent items like organ transplants. It’s harder to imagine how a fleet of Amazon drones will work in the real world, but “I think there will be a role for [drones.]” And the same with driverless trucks.

Deborah Lockridge, Trucking Info, June 2016