Are the milk delivery wagons of 100-years ago and Trailers on Flat Cars (TOFC) good proxies for the future of automation in the transportation of goods? Princeton’s Alain Kornhauser set the stage for the thirteenth session of the Smart Driving Car Summit with this thought-provoking question. Kornhauser was also the moderator for this panel that looked at the challenges and opportunities of automating goods delivery.
Automation Promises Safety and Efficiency #
As a representative of the manufacturers of the vehicles that deliver things, Joanna Buttler, the Director of Autonomous Cascadia Project at Daimler Trucks North America, stated that their mission is to make road transportation safe and more efficient. She characterized their effort as a marathon that must provide businesses and societal benefits.
One of the milestones in their mission was the introduction of Active Drive Assist/Detroit Assurance 5.0, which makes independent braking, acceleration, and steering with human supervision (Level 2). The focus of their Level 4 automation (the possibility of Hands-Off, Eyes-Off) is highway driving (Operational Design Domain), which was also the focus of most of the panel discussion. Buttler added that extensive system redundancy is a requirement to achieve the level of reliability needed for Level 4.
Improving the performance of the human driver is something that Fredrik Callenryd has been working on for years. As Product Planning Manager of the Traton Group, a subsidiary of Volkswagen AG and a leading commercial vehicle manufacturer worldwide, he finds that good driver coaching based on real driving data can provide real benefits, such as
- Up to 20% reduction in small damages
- Up to 12% lower fuel consumption
Callenryd points out these operations costs pay for the upfront investment in a business that has thin margins. The challenge is how to create the incentives for the smaller fleets and the owner-operators to make the upfront investments needed to achieve those operational savings.
Insurance Must Also Adapt #
Kornhauser points out that insurance can make or break the business case for autonomous vehicles. Speaking to the insurance aspect of automation, Reid Spitz, Head of Operations at HDVI, indicated that the average fleet vehicle costs $12 to $15k per year to insure and the rates have been increasing by 8% to 10% per year. Spitz indicates this is driving over $6.5B of investment technology to provide real-time data and management to lower insurance costs.
Still slowing or decreasing these rates is a challenge for legacy insurance companies since they have not traditionally dealt with real-time data. According to Spitz, the legacy insurance companies already pay $1.10 in claims for every $1.00 in premiums, yet find it challenging to change their business model. Similarly, trucking companies are wary of making investments that require three or four years of proof of improved driving before they start to see a return in the form of lower rates.
HDVI is building an insurance platform that is based on real-time data. It takes advantage of collision avoidance and automation technologies to help make fleets safer, compliant, and profitable. More than an insurance company, they also license their solution as a Software as a Service model to trucking companies that self-insure. As Spitz explains, these companies have a direct incentive to reduce the cost of insurance, which aligns with HDVI’s mission.
What Will This Mean for Jobs in the Trucking Industry? #
Bringing the unique perspective of someone who trained as a truck driver, Steve Viscelli, Sociologist & Lecturer at the University of Pennsylvania, has been studying the industry for about 15-years. He drove a truck early in his studies to better understand the perspective of the truckers. That experience led to extensive discussions with developers of autonomous technology for trucking and what it could mean. He sees six long-term scenarios, as documented in his report at DrivelessReport.org,
He envisions only one of those six scenarios as an upskilling opportunity for truck drivers. Except for drone operation, whereby a truck driver would lead a platoon of driverless trucks, automation will simply require fewer human skills meaning lower wages, according to Viscelli. Further, if automation improves safety and allows the loosening of regulations, such as daily driving limits, then that threatens to drive down wages further. Viscelli stated,
“40 years of history in truck driving suggests that technology is not good for workers in trucking in terms of their wages or working conditions.”
There seemed to be a consensus among the panel that new jobs will be created, but Viscelli is concerned about job quality. Buttler pointed out that there will be new types of jobs and services to support the driverless economy.
Citing the January 2021 DOT report to Congress on the impact of automation technologies on drivers and operators, Diana Furchtgott-Roth, former Assistant Secretary of the DOT, found that the effects on existing truckers will be small.[1] Slow take-up of the technology, existing vacancies, and an aging workforce should minimize the chance for a sudden workforce disruption.[2]
Given the 9 to 15-year life of trucks, it will take a while to replace the fleet. Buttler’s opinion expressed in the sessions chat is that,
“I believe that the role of drivers is and will continue to be essential to meeting the ever-growing demand for freight movement. With the forecasts for even greater increase in freight and home deliveries over the next several decades, automation will serve as a complementary technology to meet critical economic needs.”
A Safer Workplace #
Further, any safety improvements due to automation could be significant, as motor vehicle operators are ten times more likely to be killed on the job, compared to the average worker, according to the DOT report.
On the safety theme, Buttler continues,
“We will work with all stakeholders to provide a framework for bringing this technology on the road to the benefit of drivers, society and the overall economy.”
What Does Automation Mean for the Business Model? #
There is still uncertainty on how autonomy will impact the business model for the production and distribution of goods. Viscelli’s concern is that the benefits of truck platooning could remove some demand from the rail on some long-haul routes. This may put autonomy at odds with the electrification of the long-haul trucking fleet. As such, he thinks that there should that greenhouse gas emissions should be part of the equation when understanding the benefits of automation.
Conversely, truck automation might increase demand for intermodal freight movement. Railroads may find other ways for autonomous vehicles to improve operational efficiency, such as what Union Pacific Railroad is doing at its Kinney County Railport.[3] Additionally, train automation could potentially help the railroad industry better compete with increased frequency and trains that are the right size for smaller markets.[4]
Callenryd suggested that the rules in Europe are stricter than the United States and that has created a different model for freight transport. The rules have effectively created four-hour hops between hubs and constant shifting of loads. The European Unions’ General Safety Regulation mandates safety features like automatic braking, lane-keeping, and cameras. Callenryd pointed out that automation offers the potential to help ameliorate the driver shortage in Europe.
Automating the Last-Mile and Last 50-Feet – More Opportunities & Challenges #
By removing the driver, we may see smaller vehicles that are point-to-point and even go from the factory to the home. Viscelli says that “this will be fundamentally transformative to what cities look like. This needs to be a way wider conversation.” In a broader sense, he believes legislation coming out of the current Congress will focus more on the impact of automation technology, as opposed to safety and efficiency during the last decade.
Because of automation, there is a huge opportunity to utilize the infrastructure during non-peak times, such as deliveries via driverless, electric vehicles in the middle of the night. Bern Grush, the founder of Harmonize Mobility, argued that local and state legislators need to be proactive in understanding how these delivery robots will impact their streets and sidewalks. Stay tuned for more on the delivery of goods to the home in a future Viodi interview with Grush, who is also project lead for developing the ISO standard on ground-based automated mobility of goods in the last-mile and last 50 feet.
In the meantime, watch the April 1st, 2021 Smart Driving Car Summit session that will discuss where the energy will come from to power the autonomous future.
References #
[1]Viscelli and his DriverlessReport are cited multiple times in the DOT report.
[2] The trucking industry sees 10.5% of its workforce depart every year (page 43). As for aging, for example, within 15-years, 55% of current public transit drivers will be 65 (page 50).
[3] In 2019, Harbor Rail Services contracted with Coast Autonomous to deploy various autonomous mobility solutions to improve efficiency. This series of tweets demonstrates how their autonomous parts delivery vehicle saves 7-minutes per trip for repair and maintenance staff. This doesn’t sound like much but multiply that by ten times in a day over the course of a year and the time savings could measure in the hundreds of hours.
[4] The world’s only fully autonomous railroad is a 60-mile operated by the Rio Tinto mining company in Australia.
The Institute of Vehicle Concepts has interesting concepts around next-generation trains that would include electrification for non-electrified lines into a hybrid traction approach. It also uses automation that allows automatic coupling and uncoupling along with self-powered single wagons that can be shunted to different tracks allowing more of a point-to-point connection between smaller towns. According to a 2017 Railcolor News article, 30 to 40% of the costs in traditional rail are the coupling, uncoupling, collecting, and delivering rail cars. The question is when will the public be ready for such massive robots to wander the public rights-of-way.
In Toronto, Thales, Invision AI, and Metrolinx will be testing autonomous and connected technologies (radar, lidar, cameras, 4G/LTE) on a commute train for 6 months. In addition to the operational benefits, the real-time data is expected to allow for proactive maintenance.
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