I give credit to Google for pushing the car industry to wake up and start working on self-driving cars. However, Google and the automotive industry, in general, seem to underestimate the potential of autonomous trucks, especially given a troubling and worsening driver shortage crisis, noticeable impact these trucks can have on reducing total cost of ownership, and comparative ease with which the technology can be implemented in heavy commercial vehicles and, perhaps in the future, making mega trucks (approximately 60 tons total tractor-trailer gross weight) a reality.
In the U.S., heavy trucks represent roughly 5% of the total vehicle population, but consume 20% of total transportation fuel. This may seem like these trucks are not as fuel efficient as cars, but these trucks haul loads that are, on average, 22 times the load of a car, with engines that are six times as large as a typical car engine. This clearly proves how trucks, not just in the U.S., but also in all parts of the world, have the most fuel-efficient powertrain technologies. Moreover, their weights and dimensions are more prone to instabilities, so they feature advanced safety systems. Plus, these vehicles are business machines and owners of these vehicles naturally demand the highest fuel economy and safety standards, and are also willing to pay a premium in the form of higher upfront prices if lifecycle costs can be reduced. Therefore, it is only logical to expect that any innovation that enhances fuel efficiency and safety in the automotive industry will experience the greatest market pull in the commercial vehicle industry. This is why the introduction of autonomous driving trucks came as no surprise; when Daimler showcased its autonomous truck on top of Hoover Dam, one of the greatest engineering marvels in the US, the statement was not only bold, but also symbolic.
The trucking industry on both sides of the Atlantic is experiencing record-high levels of driver shortage, a problem that is getting further exacerbated by the fact that record-low levels of young drivers (age 21-35) are choosing truck driving as a profession. This is troubling news, especially for the U.S. economy, which is experiencing a turnaround following a long and protracted recessionary phase. Last year, trucks in the U.S. moved over 10 billion tons of freight, amounting to more than $700 billion. Never before have prospects for this industry looked so good, yet remain so uncertain at the same time. For once, it is not machines but humans, more specifically shortage of skilled drivers, that is accelerating the advent of semi- and fully- autonomous truck technologies in regions such as North America, Europe, and Asia.
Autonomous driving technology is nothing new in the commercial vehicle market. From mines of Australia to the cornfields of Indiana, from the war zones in Iraq to warehouses all over the world, these vehicles have been used safely and effectively for many years. However, trucking will benefit most from these vehicles. Tests conducted by several independent agencies confirm that autonomously driven tractor-trailer combinations can reduce congestion, emission, driver fatigue, vehicle downtime, and maintenance costs, plus fuel bills by 4-7%. In the U.S., long-haul trucks run anywhere between 80,000-100,000 miles on average, which translates to thousands of dollars in fuel savings per truck per year—music to the ears of fleet managers. The introduction of autonomous commercial vehicles could also significantly reduce the 3,800 traffic fatalities involving large trucks annually in the U.S., typically due to driver fatigue or error. If autonomous trucks are proven to reduce driver-related accidents, big insurance companies and government regulations will support them. The movement to build smart connected infrastructure (communication, roads, and cities) is increasing, which is vital to making autonomous commercial vehicles a reality by 2025. Developed regions, including Europe and Australia, have made tremendous strides and may become leaders in this venture.
The benefits of autonomous driving in an industry that always craves TCO (total cost of ownership) reduction technologies are driving truck makers to develop autonomous driving trucks to differentiate their products from competitors. Daimler showcased the industry’s first autonomous long-haul truck in Hanover in 2014, with Daimler Truck’s CEO Wolfgang Bernhard behind the wheel of its automated vehicle. Daimler states that it expects this autonomous truck to be introduced into the market by 2025. On the other hand, Volvo has engaged in a different strategy toward autonomous driving with a near-term focus on a concept known as truck platooning or road trains. Truck platooning can be defined as organizing two or more vehicles into a group to improve fuel efficiency, road capacity, traffic flow, and safety. Platoons have set distances (30 to 50 feet) between each vehicle to effectively reduce drag and improve aerodynamics and fuel efficiency. Volvo has invested in Peloton Technologies, a North American market leader in the development of truck platooning. There is also strong participation from other truck makers in North America, Europe and Japan, such as Scania, PACCAR, and Hino.
There are four different levels of automated driving as defined by NHTSA, wherein each level provides a differing degree of benefit to the consumer. Today, we mostly see level 1 trucks, where a driver is fully in control of all driving inputs, and level 2 autonomous trucks, where the vehicle is considered semi-autonomous with ADAS functionality; they have been running on U.S. highways for over five years. Moving into level 3 and 4 is where we can classify a truck as “autonomous.” At level 3 a driver is still required, but is able to switch the truck into an auto-pilot/self-driving mode in safe circumstances, and at level 4 the vehicle is capable of driving itself, in all traffic conditions, without the need of a driver. The rapid progresses made by truck makers in developing Level 3 automated driving technologies, and the fact that level 4 autonomous driving technology is just a few years away, indicates that technology is no longer the barrier to development, introduction, and acceptance of these trucks. Each level of autonomy provides an added layer of safety and benefits to the driver.
Recent Frost & Sullivan research on the global heavy-duty autonomous truck market shows that level 3 autonomous truck technologies will be introduced in the U.S., in certain states, by 2020-2022 with long-haul trucking emerging as a first-wave adopter of this technology. Research by the firm forecasts that by 2030, semi-autonomous trucks (level 3) will reach a penetration rate of 5% of total vehicle sales, enabled by the convergence of advanced technologies such as sensors, radars, connectivity systems, cameras, and safety systems. Fully autonomous vehicles (level 4 or driverless) are expected to enter into the freight mobility market around 2035. The research study also states that advent of autonomous driving technologies and vehicles will usher new value chain partners into the trucking landscape—IT companies such as Google and Facebook, cybersecurity companies, and algorithm-based developers. OEMs’ lack of IT knowledge will open unprecedented partnerships and business opportunities in the trucking industry. About 15-20% of emerging revenue opportunities derived from autonomous trucks will be earned by these companies.
While the outlook for autonomous trucks looks bright, several concerns and hurdles still remain. Societal acceptance will be driven largely by the regulatory environment, and regulators are still undecided on whether to support such vehicles. As of now, policies regarding autonomous vehicles vary by state, country, or region. The absence of regional standards is the primary hurdle that OEMs and autonomous technology suppliers must overcome. While expectations for self-driving commercial vehicles are high, the public and many consumers are still concerned about the safety of these vehicles. Many fear the possibility of cyberattacks as well as software and mechanical failures, both of which are legitimate concerns. The public has historically shown less sympathy toward mechanical failures than driver failures. More importantly, since we are focused on trucking, remember that trucking is a business, and like any business, the objective is to reduce operating costs. Many fleet managers are asking, “If an automated truck costs more than a conventional truck by 20-30% or more, and yet requires a driver in the cabin who is paid full salary, then why should I invest in this technology?” This exposes the need to effectively package and market value propositions associated with autonomous driving technologies to fleet managers and owner-operators.
So what does this mean to business models? Willwe see an “Uber for Trucks,” where a manufacturer or transporter will just click on their smart device and order its truck, and all trucks will work on near 100% utilization as scheduling and dispatching will be done by computers, so no truck will return empty? And will trucks even be sold anymore, or just leased to transport operators? Maybe it’s time Google also put a Google truck on the road, perhaps platooned to its car.
This article was written with contribution from Sandeep Kar, vice president with Frost & Sullivan’s global Automotive & Transportation practice.
