Transforming trucking via self-driving semis

Transforming trucking via self-driving semis

The trucking industry is facing a multitude of challenges. A severe labor shortage is driving up wages and extending delivery time, and those increased costs are choking off investments in desperately needed additional capacity. New regulations affecting driver hours are disrupting the logistics network. And diesel fuel prices, in constant flux, are hovering around $3 a gallon.

Trucking companies move 70 percent of the nation’s freight, and as companies pass those higher costs along, the entire US economy could be affected. Coca-Cola said its freight costs jumped 20 percent in the first quarter of 2018, and Hershey, Clorox, and Sysco all reported that higher freight costs were hurting their bottom lines.

But there is an emerging technology that can address those issues and create new business opportunities for truck fleet operators and logistics/delivery companies — electric-powered, self-driving trucks.

We’re in the first mile of a long journey, but trucks retrofitted with autonomous technology are carrying freight in metropolitan areas and on US highways today, and companies such as UPS, FedEx, Budweiser, and Pepsi are lining up to pre-order purpose-built electric trucks with autonomous capabilities from Tesla, which is expected to begin shipping next year.

Here’s how autonomous vehicle (AV) technology, built on the electric vehicle (EV) platform, can address the current challenges and ultimately transform the trucking industry:

  • Labor shortage: The shortage of truck drivers and the resulting increase in salaries has been well documented. Rather than take jobs away from truckers, autonomous technology can help the industry close those gaps and supplement the existing labor force with automated systems.

The shift from human drivers to autonomous technology will happen gradually as companies upgrade and expand their fleets, but the savings can start adding up quickly. Imagine a convoy of self-driving trucks following a trucker-driven rig, or a platoon system where a driver handles the first and last miles and hands the wheel over to the AV system for long hauls on the highways along with depot/warehouse operations. Likely starting with smaller vans and trucks, complex city environments will join the driverless revolution.

  • Regulatory changes: New federal regulations require that truckers electronically log their time and strictly comply with rules that limit their workday to 14 hours, of which 11 can be driving hours. Loading and unloading, or time just waiting to pick up a load, cuts into those driving hours.

The net effect of the new regulations has been to shorten the distance truckers can cover in a day, which disrupts the logistics of shippers who depend on timely freight deliveries. Today, team drivers double labor costs to keep vehicle utilization up. AVs can solve this problem by allowing drivers to switch to autopilot, either on the highway, approaching metro areas, or at the loading dock.

  • Costs: Putting the benefits of AV technology aside, electric trucks are less expensive to operate by virtue of more efficient motors and lower cost of electricity resulting in cheaper per mile costs than diesel-powered trucks. According to the 2018 Black & Veatch Smart Cities and Utilities Report, respondents cited investment costs as the biggest potential barrier to adopting an electric fleet. With dramatic battery cost reductions and financing options for infrastructure, this barrier is about to disappear.

In fact, Tesla recently surprised everyone by announcing that its entry-level, self-driving semi, expected to cost in the $250,000 range, will sell for only $150,000. The gap between a diesel-powered truck at $120,000 and an electric-powered vehicle at $150,000 is almost inconsequential when considering the total cost of ownership.

For example, Thor Trucks has developed an electric Class 8 semi-tractor that it claims is 70 percent cheaper in fuel costs per mile than a diesel-powered truck. And Tesla says its semi will save companies $200,000 in fuel costs over the lifetime of the vehicle. The EV is also 60 percent cheaper to maintain per mile.

Pilots lead the way

Pilot projects on the road today are providing a preview of how AVs will roll out and how new business models are emerging.

AV startup Embark has teamed up with Ryder Systems and Frigidaire to haul refrigerators on a 650-mile route from a warehouse in Texas to a distribution center in California.

A driver from Ryder Systems handles the trip from the loading dock to a transition point on the highway, where the driver unhooks the trailer and connects it to Embark’s tractor. A safety driver sits behind the wheel, but the vehicle drives itself, staying in the right lane and following the speed limit. When the truck reaches a transition point in California, the process is reversed.

Ride-sharing pioneer Uber has deployed a similar short-haul/long-haul model in Arizona, where it has launched a fleet of self-driving trucks that it acquired when it purchased AV startup Otto.

Future business models

The next step in the evolution to fully autonomous freight delivery would be the AV system handling the trip between transition points without a safety driver.

If this model takes hold, there will be a need for a network of “smart truck stops,” or hubs, that would include high-powered, fast-charging stations. These transition points would be located along major highways and destinations and would handle all the logistics involving trailers and drivers.

One other solvable issue: as electric truck fleets energize, they are going to displace millions of gallons of diesel fuel with megawatt hours of electricity. Like the loads of light rail, subways, factories, and data centers, the grid needs to evolve to handle these loads. Innovation in the way of smart charging, local generation, and on-site energy storage will save on energy costs, smooth grid integration, and provide resilience. As with many transit bus and utility service trucks on the market today with power export features, the standards and technologies are in place where these large truck batteries can become “power plants on wheels” in the case of emergencies or as economics make sense to provide grid services.

And finally, there’s an opportunity for trucking and logistics companies to take today’s “transportation-as-a-service” leasing, point-to-point distribution, and pay-by-the-mile models to the next level where customers simply add on-demand, autonomous trucks to the menu. We are not far from when a highly optimized just-in-time supply chain system or a simple app on your phone will summon a self-driving truck.

Maryline Daviaud Lewett is director of business development for Black & Veatch’s Transformative Technologies business. She is responsible for sales and partnerships in distributed infrastructure, sustainable transportation and fleets, engineering, procurement and construction of electric vehicle charging infrastructure networks, fuel cell vehicle filling infrastructure networks, and behind-the-meter energy storage.

Paul Stith is director of strategy and innovation for Black & Veatch’s Transformative Technologies business. He specializes in sustainable transportation and distributed clean energy solutions.