April 2018 The Roemer Report

April 2018: Whose Autonomy Is It Anyway?

Thinking about technology and what its ultimate impact might be on business and operations is a daily fact of life these days in the trucking industry. Both owner-operators and fleet operators understand that beyond the brains and the bodies, what’s left is the truck. It’s the hardware (and these days, the software), that comprises the tools of the trade and the physical means to ship freight efficiently, safely and profitably.

For truckers it’s an intrinsic, if not completely symbiotic relationship, and while the trucking industry does indeed have a very close relationship with its trucks by necessity, most sectors of the industrialized economy have similar relationships; few, however have such a tight relationship to American cultural values as trucking does in the USA—ask President Trump.

Regardless of the sector, for everyone, the pace of change and the necessity of innovation in relation to the technologies they apply is accelerating and pushing commercial economies into new places, places where they may, or ultimately, may not want to go.

For those just crawling out from under some rock, there are a handful of major technological trends disrupting the trucking industry these days. Disruption is a relatively new technical term for things that (choose an expletive) -up the status quo and impel dramatic change.

For those following along, the Roemer Report has been watching a champion disruptor very closely—in March the column covered the advance of electromotive technology and Elon Musk’s entry into the Class-8 arena with (according to Mr. Musk) a fully-realized commercial-ready offering. OK that’s one.

As with any highly regulated industry dependent on profit-motivated humans and the public infrastructure, truck drivers and fleet carriers are required to comply with the regs, 24-7-365 and prove their equipment and operations are running by the numbers. In times past, truckers and fleets were trusted implicitly to follow the rules and log their operating data to prove compliance. Along the way, that trust gave way to regulators seeking ever more “perfect” levels of public safety — increasing the burden on the industry to prove compliance. To make proving it “easier” on everybody, regulators turned to technology, so we now have the ELD mandate. The trend and compulsory adoption of telemetric operating data capture is number two on the list.

Who Wants to Drive?

Of course the disruptor with the most potential to really “blank” – up the industry is the advent of independent, driverless over-the-road autonomous vehicles (AVs). There are a number of “disruptors” out there pushing the introduction of self-driving vehicles. Technocrats are confident that automated driving systems are much more than some sort of “super cruise control” for high-end passenger cars. They are betting the farm that AVs have the greatest potential as commercial vehicles. Musk is one, he’s doing it with his cars right now – but there are others out there agitating for the accelerated adoption of driverless vehicles.

In February, Trucks.com Editor Jerry Hirsch spoke at the Autonomous Vehicles Silicon Valley conference; his talk: “Why Trucking and Logistics Will Lead the Autonomous Vehicle Revolution.” According to Hirsch, in the U.S. trucks haul some $700 billion of cargo a year, amounting to about 70% of the country’s freight by weight. “In the near term,” Hirsch explained, “that’s why the economic case for driverless technology is so much greater for commercial vehicles.”

What is interesting was his up-front assertion of the over-arching utopian motivation to adopt autonomous transportation technologies in the first place: “While many look ahead to the decline of human driving and a subsequent decrease in crashes and traffic fatalities and injuries,” he intones, “most agree it remains a distant vision.” But that can all be relative and there will be early adopters.

To prove his point, Hirsch referred to recent statistics from the Center for Automotive Research which revealed that self-driving vehicles categorized by the Society of Automotive Engineers’ as Level 4 and Level 5 (mostly independent with telemetric and pilot guidance and true robot pilot autonomous operation), “Won’t even reach 4% of new-vehicle sales by 2030.” Beyond that he says, “It’s possible they could reach 55% by 2040 …” but heck, anything is possible; including the faster than predicted uptake of this disruptive technology than pundits like Hirsch predict.

The Two Realms of Autonomous Transport

Compelling the audience to compartmentalize the trend, as well as help them understand the Big Picture dynamics of the issue a bit better, Hirsh recommends dividing human transportation into two forms: “lifestyle mobility and commodity mobility.” Lifestyle mobility, he declares, is where independent vehicle ownership and individual drivers will remain.

However, when it comes to the rest of it, and that includes transporting freight, he finds “commodity” mobility will always comprise the bulk of human transportation – and that means everything from walking or cycling to work, driving a pickup truck or taking an Uber to a bar. “Commodity mobility” notes Hirsch, “is where we see the roll out of autonomous vehicles.” But, he explains, this will only happen when and where there is an economic return for the operator, “such as freight and logistics.”

Despite all the tech that manufacturers are starting to pack into light vehicles right now, from Hirsch’s point of view, the uptake of commercial “commodity” AVs will be gradual because so far, initial costs for the necessary enabling technologies are still a barrier to entry. From our point of view, early applications will come in tightly controlled programs where the technology’s advantages can be exploited, but manageable from a risk standpoint. Projections on when exactly any major flip is going to happen is still open to great debate.

Long Distance and the Last, Longest Mile

So far we’ve listed three of Trucking’s biggest disruptors: 1) Electromotive technologies, 2) ELDs, and 3) AVs.

What’s number four? It’s right there and springing from the greatest disruptor of all time – the computer – look out, it’s consumer goods E-commerce. One market research firm finds e-commerce retail sales have almost tripled in the last decade and that growth trend is expected accelerate.

But central to all of that, says the Trucks.com editor, is that any adoption of AV technology by the commercial freight shipping industry will have to be effective at adding to, not subtracting from the bottom line. Hirsch notes that for the commercial application of autonomous vehicles, the economics and real-world operating environments favor last-mile delivering of consumer goods.

Regardless, fleet managers, he says, will plug whatever the extra expense of AV operations into a spreadsheet, and if there are efficiencies to be gained and a calculable payback to be earned, then “When that payback drops to a certain level— boom! — It’s time to buy.” Hirsch thinks this will create a powerful economic incentive to transition to self-driving e-commerce trucks because the demand for drivers will WAY outstrip supply.

But what about hauling freight cross-country? Autonomous technology does have the potential to enhance the safety and efficiency of long-distance shipping—especially crossing the great, empty expanses of our country. Think of a UPS pilot flying his freight to Japan, he’s got several autonomous and semi-autonomous technologies operating and navigating the aircraft all the way across the Pacific – while he is Free to do other work and tasks not related to the actual physical safe, efficient operation of the aircraft while alert and on station.

The second week of March Waymo launched its commercial AV pilot in Atlanta. Notable, among other things, because even though they say they have about a billion miles of experience, humans will still be in the cab. “As our self-driving trucks hit the highways in the region,” their announcement declared, “we’ll have highly-trained drivers in the cabs to monitor systems and take control if needed.”

Who exactly will all this autonomy serve anyway? In many ways autonomy is synonymous with independence and freedom. AV tech has the potential to be very liberating and enhance the economics and safety of the industry, even for drivers, because although they may not actually be steering the truck, they’re brains and experience are, something that for decades to come will still be needed for the long haul. Now let’s see about insuring them so they can get the party started.