Self-Driving Trucks - Is it too soon? | Whale Logistics Blog

Self-Driving Trucks - Is it too soon? | Whale Logistics Blog

Self-driving trucks are already here, and are closer to reality than you may think. Riddled with precautions, is it too soon for driver-less trucks to be on the road?

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Photo courtesy of Business Insider

What's been happening?

In December 2016 Uber, the ride-hailing company, began testing its self-driving cars, with the first trials taking place in Arizona. According to Uber, it could be years before self-driving vehicles enter wider mainstream use, but the company has already deployed early tests in Pittsburgh and Tempe, where the public can travel in prototype vehicles.

Four months before the tests began, Uber acquired Otto, a self-driving truck startup founded by former Google employees, including Anthony Levandowski. Otto started in January 2016 and had sold to Uber within six months for $680m. Levandowski was named vice president of Uber’s self-driving technology, and he reports directly to Travis Kalanick, the company’s chief executive. Levandowski leads Uber’s Advanced Technologies Center in Pittsburgh, the center of the company’s testing and self-driving efforts. In Fort Collins, Colorado, Otto recently completed its first self-driving truck delivery, a 120-mile beer delivery for Budweiser.

Trucking is a $700 billion industry that touches every corner of the economy. Trucks haul natural resources from mines and forests. They transport industrial building blocks from manufacturers and deliver goods to stores and homes. Virtually every physical product from food to paper towels and furniture has touched a truck several times by the time it gets to a consumer’s hands.

This year, companies and investors are on pace to put just over $1 billion into self-driving and other trucking technologies, 10 times the level of three years ago, according to CB Insights, which tracks the venture capital industry.

Tesla is widely expected this week to showcase an electric truck that will have some self-driving capabilities. And Embark, a Silicon Valley start-up, is set to announce on Monday that it has been testing its self-driving technology as part of a three-way partnership with the truck-leasing company Ryder and the appliance giant Electrolux.

Autonomous technology will help trucking companies reduce labor costs in the long run, first by extending the number of hours trucks are in operation, and later, by reducing the number of drivers. The industry spends billions of dollars a year on accidents that are largely caused by human error, and billions more on insurance premiums that should go down if and when self-driving technology is proven to be safer than human drivers.

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But is it too soon?

Companies have a lot to get through before they can start legally operating trucks without drivers. Beyond technical and regulatory hurdles, the industry is sure to be challenged by wild cards like how human drivers react to seeing a unmanned truck gliding down the highway and how regulators respond when the inevitable first deadly autonomous-trucking accident occurs. If such a backlash were to happen before the technology has been widely adopted, it could slow things for years.

But whenever self-driving trucks arrive, there will be economic ripples, affecting insurance premiums, truck stops, vocational schools and the roads themselves. “This is the most powerful thing to hit us since the building of the superhighways in the 1950s,” said Noël Perry, an economist at FTR Research, which tracks the logistics industry.

Trucks replacing drivers

Goldman Sachs economists estimate that trucking will shed about 300,000 jobs per year — starting in 25 years. Clearly, that estimate is based on so many ifs that the precise number is not worth fretting over. The bigger point is that as technology gets better, it will start replacing jobs.

But given that trucks are likely to need drivers for some time, self-driving companies are almost universally pitching themselves as a friendly partner instead of a job killer. “You increase productivity, but also make the job more attractive,” Mr. Rodrigues said.

And it’s true: Trucking is a brutal job. Drivers endure long, tedious stretches where they are inactive but have to stay focused, and they spend weeks at a time away from home. For those and other reasons, the industry’s biggest problem has been the scarcity and turnover of drivers, making it hard to keep up with shipping demand.

Source:; Marketline (2007)

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