Supply chain network operations and optimization
How would a 30% decrease in cost, doubling of daily driving range, and near 24/7 trucking operations affect decisions such as optimal warehouse placement, mode choice optimization (for example, air and rail substitution), and hours of operation for warehouse staff?
For shippers, autonomous trucks can greatly change the dynamics of the supply chain. Today, shippers face the challenge of high cost of truckload transportation due to the lack of capacity compared to available loads. Autonomous trucking could drive down prices by reducing costs, thus making shippers more inclined to select trucking over rail. Lead times could also decline due to longer hours of operation, making trucking a viable alternative to costly air freight. Perishable goods could especially benefit from decreasing transit times. Furthermore, AV technology could simplify the journey from manufacturing site to consumption destination, eliminating a significant amount of the touches that today add time, money, and effort. Shippers should begin to plan for these changes early—the mode selection shifts may happen quickly.
Shippers should also reconsider their facility network. As autonomous technology rolls out, distribution modeling will likely show that current networks—especially if they are hub-and-spoke—may no longer be efficient. Take, for example, distributors: To reduce transportation costs, distributors have been expanding their footprint, at the expense of redundant inventory and increased warehousing costs, to be within a one-day round trip to their customers. Autonomous trucks can dramatically increase the distance of a one-day transit because the driver is not constrained to hours of service. This means the distributor would need fewer facilities and lower inventory. Theoretically, with a daily driving range of more than 1,000 miles and a nationwide transfer hub network, a shipper could reach any point in the contiguous United States within 24 hours with only a few distribution centers.24 It also could mean facilities need to be made bigger and incorporate multishift, all-night shipping and receiving.
Because of long lease times for facilities, and extensive planning needed for network optimization, shippers should start planning for autonomous shipping well before the technology reaches their network. Investments in warehouse spaces and decisions about shipping providers should be carefully considered so that adjustments can be made as autonomous technology progresses.As technology along the entire supply chain evolves, there could also be new opportunities to optimize by connecting autonomous trucks with other innovations such as “lights-out warehouses,” which operate with no humans present.
As tech companies begin to commercialize self-driving trucks, how should they and their fleet partners leverage ecosystem players such as real estate companies, truck stop operators, and telecoms, to efficiently access and upgrade infrastructure such as transfer hubs, remote maintenance, and 5G connectivity?
Although the rollout of autonomous trucks is expected to happen over an extended period, large-scale capital decisions for physical and digital infrastructure investment can’t wait to take these considerations into account.A number of industries are currently positioned to offer the services and infrastructure that autonomous trucks will likely need. Existing trucking support networks such as truck stops, repair networks, OEM dealers, and state rest stops could all be converted to handle different needs. Businesses such as shopping malls or big-box retailers with substantial land footprints—particularly near highways—could convert some of their parking space to transfer hub space. Finally, smaller players that specialize in a service such as data transfer or on-demand maintenance could combine to offer more comprehensive solutions. It remains to be seen how this ecosystem will form and what types of partnerships might be required to keep autonomous trucks on the road, but the earlier that companies can begin to form partnerships and shape offerings, the more likely they are to play a central role in the ecosystem as it scales.
With the driver less critical for the highway journey, what data integration and management will be necessary between autonomous trucks, shippers, brokers, infrastructure players, and governments to ensure efficient and safe operations? Who will own the data and the integration platforms? Who will consume the data?
Autonomous trucking is expected to drive a fundamental shift in how data gets looked at and treated in an enterprise. Behind a truck’s autonomous driving system is software and compute power processing massive amounts of data from cameras, lidar, and radar. This data is essential in enabling a vehicle’s safe operations and decision-making. But sensors can also generate additional types of information, such as location data, that would be critical for the broader ecosystem. Many stakeholders would depend on data integration to complete typical day-to-day functions without a driver. To meet government regulations for fuel tax collection,25 for instance, the autonomous truck fleet would need to keep track of mileage and fuel purchases accrued in each state. Fueling and maintenance by outside parties would require platform integration to schedule and pay for services.
The data collected from AV systems could also unlock new opportunities for consumers—and could serve as an enhanced input to transportation management systems for more sophisticated route, load, and carrier scheduling optimization, as well as real-time tracking and visibility. Autonomous systems providers and fleets utilizing autonomous trucks should consider how real-time data around construction, traffic, road, and weather conditions can be used to improve their own fleet operations and/or monetized to outside organizations by providing fresh visibility into highway routes. In addition to AV-specific data, the advancement of connected trucks can provide machine performance data to inform predictive maintenance and manufacturing quality control.
Data access, quality, and security are considered the major challenges in unlocking these opportunities, securing partnerships, and integrating across disparate processes and management systems. Stakeholders should act now to build the robust infrastructure to maximize their potential benefits from data platform integration and begin conversations with others about shared data standards and interoperability.
Policy and regulation
How will the federal, state, and local regulatory landscape affect autonomous trucking adoption nationwide?
In the last few years, the Energy and Commerce Committee and the U.S. Senate Committee on Commerce, Science, and Transportation developed wide-ranging bills addressing many facets of AV policy, but much is left unresolved. One challenge for federal regulators in this area is the question of jurisdiction: Since AV technology doesn’t fit neatly into any single domain in Washington’s mosaic of agencies, it is likely that implementation of legislation focused on automation, or adjacent issues such as 5G and closing the digital divide, would touch multiple large federal agencies such as the U.S. Department of Transportation (DOT), the Federal Communications Commission, and possibly the U.S. Department of Agriculture.
Without a clear, guiding federal strategy (legislative or regulatory), states have taken steps to revise their own regulatory frameworks to address AV-related topics, resulting in a patchwork of rules and a lack of clarity. Thus far, the DOT has taken a nonregulatory approach to AVs, offering stakeholders voluntary guidance to promote innovation. Though this nonbinding solution offers flexibility while the technology continues to rapidly evolve, it has led to a patchwork regulatory environment with different interpretations and ambiguity, introducing challenges for autonomous trucking innovators and manufacturers when they attempt to scale nationwide. Nevertheless, there is optimism that Congress has laid the groundwork for AV-related legislation—including broadband and 5G—and that the DOT will build on regulatory actions taken in 2020 to support economic recovery and job creation post-COVID-19.26
Two DOT modal agencies with jurisdiction over autonomous trucking, the National Highway Traffic Administration and Federal Motor Carrier Safety Administration, have taken important steps, issuing advance notices of proposed rulemaking—focused on identifying regulatory barriers to AV innovation and adoption, as well as safety principles for defining and assessing autonomous driving system competence—which indicate that regulatory action may be coming shortly.27 Writing and issuing regulations is often a yearslong process, and these broad, early regulatory actions, coupled with ongoing research and analysis, could position the new Biden administration to move forward with regulatory action more quickly. As agencies continue their rulemaking processes, industry players can engage with the DOT to help inform these rules by responding to requests for public comment, participating in public listening sessions, and engaging with new agency leadership.
Additionally, as the 117th US Congress takes office, signals indicate that legislating around AVs will continue to be a priority in the House of Representatives.28 As lawmakers begin setting the policy agenda, ecosystem players have opportunities to educate lawmakers on progress—as well as the safety and economic benefits that these new technologies offer—to ultimately help shape legislation.
How might public perception of AV technology affect adoption, and what actions can ecosystem players take to educate the public?
Among the main motivations for deploying autonomous technology in vehicles is to increase vehicle safety. As autonomous trucking becomes more visible, public perception of AV technology safety will influence acceptance and adoption—and can serve as either an accelerator or barrier. Both federal regulators and industry players recognize public acceptance of AV systems as a key component of broad public adoption of this technology29 and are making efforts to educate the public. In fact, industry players have launched a coalition with the express purpose of “informing the public about automated vehicles and their potential.”30
Recent polling data, however, shows that the American public remains wary of AVs: More than half of surveyed Americans are concerned about the idea of AVs even being tested near where they live.31 Reports of traffic incidents involving AVs have had a significant and lasting impact on consumers’ view of the technology, regardless of fault: Public trust in self-driving cars quickly fell after a few high-profile incidents in 2018.32 But familiarity should help—several studies have shown that individuals who have interacted with AVs are more likely to have positive attitudes toward the technology.33
For this reason, the disruption of COVID-19 to supply chains worldwide may accelerate public acceptance of autonomous driving systems, due to increased public exposure to automation through delivery robots and autonomous taxis. During the pandemic, the public need for “contactless” delivery has accelerated demand for—and public exposure to—autonomous delivery robots and vehicles as these companies have partnered with major grocery stores, retailers, and restaurant chains to deliver essential goods.34 Recent research suggests that this exposure, and continuing COVID-19 concerns, have made Americans increasingly comfortable with delivery automation.35 Industry players should continue to prioritize education and outreach efforts, and to increase public exposure to AV technologies, while maintaining vigorous safety standards—bearing in mind that a single high-profile incident could seriously damage public acceptance.
The COVID-19 pandemic has made clear the national economy’s dependence on trucking. From paper towels and pinto beans to ventilators and vaccines, the lifeblood of American commerce and, increasingly, health, lies in the millions of 18-wheelers traversing this country’s highways.
Autonomous trucks could lead to the most fundamental reshaping of that system since the building of the interstate highway network in the middle of the last century. The potential shift presents tremendous challenges as well as opportunities for players at every stage of the value chain. And those that prepare for that future now—including by planning for a just and fulfilling future for drivers—have a chance to remake one of the foundations of the American economy.