Self-Driving Trucks - A New Age for Ground Shipping

Self-driving commercial trucks have been a hot topic for the past few years as several companies have joined this sector in an innovative movement to become the first to establish a fully disengaged trucking network. A fully disengaged trucking network would negate the need for the driver to interact with the vehicle, but still be available in case of emergencies. The development of this technology could lead to possible reduced labor costs and reduced transit times.

What are self-driving trucks?

Self-driving trucks or “robo-trucks” focuses on autonomous technology that does not require a human driver. The idea is like that of self-driving cars, but with constraints and considerations such as load weight and distance traveled. Though self-driving trucks and electric vehicles are commonly associated with one another, electric vehicles primarily focus on the renewable and sustainable energy mainly for the retail use. Though they are different, the two sectors have been developing almost in parallel.

Who are the major players and Where are we now?

A few major players in this area are Waymo, formally known as the Google self-driving car project, TuSimple, Gatik, and Embark. These companies have already began mapping out their trucking network and chances are you may have already seen them on the road. Waymo and GM Cruise have completed 11,017 and 5,205 miles respectively of disengaged travel.  TuSimple’s longest mapped route is 1,000 miles between Phoenix and Dallas. In fact, they have begun a four-year plan to go nationwide by 2021, traveling cross-country from Los Angeles to Jacksonville. They also intend to completely remove a person behind the wheel is 2021.

Various partnerships have been established such as Waymo with UPS and AutoNation and the start-up Gatik will begin delivering for Walmart in 2021. Embark, in collaboration with Amazon, has begun transportation of Frigidaire refrigerators from El Paso to Palms Spring. Though we are far from implementing self-driving trucks on a nationwide scale, these partnerships represent the commitment to this sector.

Impacts and Looking Ahead

As self-driving trucks start to become more common, there are areas in supply-chain and logistics that will be affected and need to be considered.

1.       Quality and Safety of goods

Who becomes responsible for the quality and safety of the goods? It could be placed upon the company to reformat their packaging strategy to be more secure or the freight forwarder to ensure that the transportation of goods is secured. The safety of the goods is a priority to consider which may impact the relationships and responsibilities between these entities.

2.       Adaption of transportation management systems

As self-driving trucks become integrated in the industry, managers need to consider what new types of data need to be collected to ensure that the transportation of goods is optimal. When trucks arrive at their destination, how is communication going to be accurately logged and confirmed that the goods were not only obtained, but that the trucks are also meeting regulations? Transportation management systems will need to adapt to this new mode of transit and be able to consider new elements that may arise.

3.       The career of truck drivers

A major discussion on the impact of self-driving is the career of truck drivers. With the male workforce dominating the trucking profession at over 90%, people wonder if it would make the career obsolete. Are these drivers expected to learn the new technology to keep up with the innovation? TuSimple has tried to proactively combat this possible problem by offering a program at Pima Community College to help truck drivers adapt to the new technology. On the other hand, self-driving trucks can be implemented as a driver assist technology (rather than driver replace) on long routes to reduce breaks required and travel time. For example, the 11-hour driving limit could be prolonged if the driver can rest while on route, reducing fatigue.

Outsourced vs In-House Transportation: A Guide

All companies at some point have to make a decision on what aspect of a business to keep in-house, and what should be outsourced. Transportation is such a critical part of a supply chain that many companies leave it to specialist third party logistics (3PL), but depending on the type of company and the trajectory of the business, insourcing could be a valuable investment.

The three main options for transportation are:

1. Contract Carriage: An agreement between an established carrier and another party for transportation. This is the most popular option as it is the most well-known and the most flexible. The upside to this option is that there is no transportation management other than scheduling pickups and deliveries for products as they are ready to ship. The downside is that the transportation is at the mercy of big trucking companies and if there are emergency shipments it’s not always possible to schedule last-minute transportation.

2. Private Fleet: Owning tractors and trailers and employing drivers to run transportation operations. A private fleet enables a company to have complete ownership of the transportation network. The benefit to this is that there is total control over the operation, but this comes with the burden of managing a separate entity that is likely not the company’s specialty. It requires capital to invest in trucks and trailers, as well as hiring and retaining drivers and adhering to regulations for these truck drivers. Very consistent demand and shipments would be required to justify this option.

3. Dedicated Fleet: Assigning a group of tractors, trailers, and drivers exclusively to fulfill transportation needs. This option is essentially a private fleet but is managed by experienced companies, so is somewhere in the middle of insourcing and outsourcing. This is a desirable option often because companies do not want to deal with the intricacies of owning a private fleet, but they want the flexibility and service levels that come with owning it. Dedicated fleets are usually run through 3PLs.