Behind the Headlines
What driverless trucks could mean for industrial companies
Week of March 18, 2019
If there is one sector where the impact of the current tight labor market is being felt most acutely, it’s in long-haul trucking. As this recent article on Bloomberg.com notes, a shortage of drivers is resulting in higher freight fees, which are rippling through the economy and affecting the price of everything from Big Macs to Crest toothpaste.
Since “millennials don’t want to drive trucks,” as one of the business executives quoted by Bloomberg observes, the pressure to come up with automated solutions in the form of driverless trucks is increasing. Those solutions are coming soon, says TuSimple, a Tucson, Ariz.-based tech startup founded in 2015, which last month raised $95 million to expand its fleet of self-driving big rigs and fund joint product development with truck manufacturers and equipment makers.
“Local trucking will be around for the foreseeable future,” says Rob Brown, the company’s director of public affairs, “but we think we will be able to remove the driver on long-haul routes in about two years.”
TuSimple, along with Embark, Starsky Robotics and Peloton Technology, are working with truck manufacturers to adapt trucks to automated controls by switching to automatic transmissions, for instance, as well as working with operators to test the new technology. TuSimple’s technology uses cameras that can see about 3,200 feet ahead. With a human driver riding along as a backup, it has safely logged more than 1 million miles, largely between San Diego and Houston, Mr. Brown said.
“The first fully automated trucks probably will be used in the I-10 corridor from Florida to Texas,” he said. “We’ve already solved problems relating to rain, dust and high winds, and traffic and density really aren’t that hard to deal with, either. But we have to map the route thoroughly before we can run it.”
For industrial middle market companies, Mr. Brown sees several implications in the coming transition to driverless trucks.
“Once you remove the human element, hours of service won’t apply, which changes the economics of long-distance shipping,” he said. “Shipping around the clock can double efficiency by moving more, avoiding traffic and saving on fuel.”
If routes are repeatable, and if shipping requires certain kinds of special handling, some industrial companies may even consider taking over the shipping function themselves for cost and control reasons, he said. They could own or lease the equipment and contract with companies such as TuSimple to operate the trucks. Many new kinds of ownership, leasing and financing arrangements may emerge as a result of the technology, he said.