IndustryInsights

2019 Trends: Autonomous Trucks in the Supply Chain

William Craig, CPA – Senior Manager – Market Research 

Autonomous trucks 3

Since 2008, mining company Rio Tinto has moved more than one billion tons of iron ore and waste material across its five mining sites in the Pilbara Region of Western Australia using fully autonomous trucks. They currently have more than 80 autonomous Komatsu trucks operating with plans to increase the number to over 140 by the end of 2019. Each truck operated an estimated 700 hours more than a conventional truck during 2017 and had around 15% lower load and haul unit costs (Mining.com).

While on the open roads, in 2016, a Volvo truck outfitted with Uber’s (Otto) autonomous vehicle (AV) technology and no driver behind the wheel, traveled 120 miles along I-25 from Fort Collins to Colorado Springs to deliver 50,000 cans of Budweiser. For full disclosure, the driver engaged the autopilot and moved to the backseat once on the highway (CNN Business).

In the first coast to coast experiment, Embark, a San Francisco’s based startup, used a Peterbilt truck coupled with Embark’s autonomous technology to travel 2,400 miles from Los Angeles to Jacksonville with only a safety driver on-board. Now, Embark has teamed up with Electrolux and Ryder to deliver Frigidaire refrigerators 650 miles on I-10 throughout Texas, New Mexico, Arizona and California using the same technology. (TT News). Waymo, Google’s self-driving vehicle company, will begin a pilot project delivering freight to Google’s data centers in Atlanta, using modified Peterbilt trucks using Waymo’s autonomous capabilities and safety drivers (Forbes).

Many industry titans as well as start-ups have invested and will continue invest in the autonomous truck market, including the likes of Volvo, Daimler, GM, Ford, Tesla, Waymo (Google/Alphabet), Uber, Embark, Nicola, Thor, Peloton, to name just a few.  According to KPMG, $50 billion has been invested over the last 5 years, developing AV technology.
self driving truck 2McKinsey and Company believes it will be 8 years, before fully autonomous trucks with no humans on board will be on the highway in North America. The semi-autonomous and autonomous truck markets are projected to reach 1.2 million units in combined sales by 2025 (ResearchandMarkets.com). Growth will continue to accelerate, with HIS Automotive forecasting 21 million vehicles sold with some level of autonomy in the year 2035. While the future is promising, there are lots of current developments. In fact, Walmart, Pepsi, FedEx, UPS, DHL are just some of the companies that have ordered the new Tesla Semi, a self-driving electric powered truck capable of doing 0-60 in 5 seconds (Business Insider)!
In the immediate term, automatic emergency braking (AES) and adaptive cruise control (ACC) will have the most significant potential for impacting the industry, as the National Highway Traffic Safety Administration (NHTSA) expects AES to be standard in vehicles by 2022. NHTSA defines 6 levels of autonomous vehicles (video overview of each level), including; 0 – No Automation, 1 – Driver Assistance, 2 – Partial Automation, 3 – Conditional Automation, 4 – High Automation, 5 – Full Automation. For a complete description, please visit NHTSA.

Autonomous truck platoonPartially automated platooning, where 2-5 trucks follow closely behind each other could be rolled out over the next five to seven years according to Bernstein analysts (Business Insider).  In 2016, Volvo demonstrated how a caravan of autonomous trucks could work in unison to reduce fuel consumption and increase safety, using vehicle to vehicle (V2V) platooning technology.

More recently, they have teamed with FedEx to test the platooning technology with the North Carolina Turnpike Authority.  Others currently testing platooning technology include Daimler AG, Navistar International and Tesla.
The benefits of autonomous and semi-autonomous trucking could be immense!  Let explore some of these major benefits.
Operating Costs/Labor: McKinsey and Company reports the industry will see a 45% reduction in truck operating costs