On Trucking Automation: How the Technological Road Forward Could Leave Millions Behind

On a Thursday morning in late October 2016, an 18-wheel freight delivery truck made the 120-mile journey along I-25 from Fort Collins to Colorado Springs, hauling over 50,000 cans of Budweiser beer with it. This routine delivery would be an uninspiring story except for one omitted detail: for the entire highway journey, there was no one in the driver’s seat. In a landmark road test, Otto, an automated trucking technology firm owned by Uber, had successfully demonstrated the safety and reliability of its driverless trucking technology.1               

Otto’s nascent demonstration signaled a drastic paradigm shift for the future of trucking in America – automated trucking technology is real, and it will disrupt the industry much sooner than many expect. Speculation of driverless cars for passenger transportation has grown popular in recent years, but many signs point to driverless technology making landfall in commercial trucking first. “Platooning,” a caravan-type version of automated trucking, is already being widely tested in Europe.2

The American trucking industry, and in particular, the American Trucking Associations (ATA), the largest trade association representing the industry in the U.S., should take note and prepare for the inevitable transition now. Failure to do so risks backing them into a corner of reactionary policy-making when the full potential of driverless disruption is realized. Leading analysis suggests that disruption will bring massive benefits to the industry, along with equally relevant costs.

It is estimated that the proliferation of automated trucking technology could yield cost savings to the freight industry of $168B annually, generated from reductions in labor, fuel, and accident costs combined with increased asset utilization and productivity.3 However, these benefits will not be achieved without commensurate societal costs, which will manifest primarily in the form of job displacement. One of the most popular occupations in the country, the freight industry employs over 3.5M truck drivers and over 7.8M people in trucking-related jobs across America.4 The rapidity of driverless technology development has led to estimates of up to a 70% labor force reduction – 2.4M jobs – by the year 2030.5 These figures must not be ignored, and will certainly require close collaboration between industry heads and regulatory bodies in order to smoothly usher in a new era of transportation.

To address the growing trend towards automation, the board of the ATA approved and released its first “comprehensive” Automated Truck Policy in October 2017. The plan details the ATA’s priorities and goals regarding collaboration with federal, state, and local governments in making the transition to an automated trucking landscape.6 Highlights of the plan include:

  • Examination and restructuring of safety laws to accommodate advancements in driverless safety technology
  • Cooperation amongst government agencies to standardize and promote the smooth flow of interstate commerce in an automated trucking environment
  • Removal of legislative barriers that inhibit driverless technology advancement
  • Public education programs to promote the widespread acceptance of driverless technology on America’s roads

While these issues are undoubtedly relevant and should be proactively addressed, the ATA’s plan is specifically designed for a scenario in which truck drivers will not be eliminated from the transportation equation. This view is short sighted, as it currently fails to consider how industry and government should manage the transition for drivers who will eventually become economically displaced due to automated trucking.

The ATA should use its lobbying power and collaboration with regulatory bodies and firms across the industry to develop concrete transition plans to avoid mass unemployment and economic instability due to automation technology. This can be done in several ways. At a minimum, trucking firms should proactively educate their employees on the real and near-term possibility of job loss. False assurances of long-term job stability in today’s technological environment would be irresponsible. While ultimate responsibility rests on individuals to continually develop skills to remain marketable, an industrial shift of this magnitude warrants action at the firm level.

Second, the ATA and its governmental partners should work together to control the speed of a transition to fully automated trucking. This will help ensure that economic instability due to job displacement will not become uncontrollable. This approach will also give policy makers and industry leaders enough time to make prudent decisions for their industry and communities so as not to have a detrimental effect on the national supply chain, and will allow a gradual maturation of public acceptance to a completely new technology.

Finally, trucking firms should offer transitional training programs to employees at risk for job loss to move into roles that are likely to survive after the transition to automation (dispatchers, logistical planners, etc).

Still, questions remain. What should be done to address trucking-adjacent jobs that also face obsolescence along America’s arteries such as rest stops, motels, and restaurants? More broadly, how should society prepare for further technologically-bred job displacement beyond transportation? Should a universal basic income play a role in future stability?

(Word Count: 800)

 

 

Endnotes

1 M. McFarland, “A self-driving truck just hauled 51,744 cans of Budweiser on a Colorado highway,” October 25, 2016, accessed at:

http://money.cnn.com/2016/10/25/technology/otto-budweiser-self-driving-truck/index.html – on November 13, 2017.

2 L. Hook, “Out of road: driverless vehicles and the end of the trucker,” Financial Times, accessed at:

https://www.ft.com/content/2d70469c-140a-11e7-b0c1-37e417ee6c76 – on November 13, 2017.

3 “Autonomous Cars: Self-Driving the New Auto Industry Paradigm,” as published by Morgan Stanley, November 6, 2013, accessed at:

http://orfe.princeton.edu/~alaink/SmartDrivingCars/PDFs/Nov2013MORGAN-STANLEY-BLUE-PAPER-AUTONOMOUS-CARS%EF%BC%9A-SELF-DRIVING-THE-NEW-AUTO-INDUSTRY-PARADIGM.pdf – on November 13, 2017.

4 Reports, Trends, & Statistics – as reported by the American Trucking Associations at:

http://www.trucking.org/News_and_Information_Reports_Industry_Data.aspx – accessed November 13, 2017.

5 “Managing the Transition to Driverless Road Freight Transport,” as published by the International Transport Forum, May 31, 2017, accessed at:

https://www.itf-oecd.org/sites/default/files/docs/managing-transition-driverless-road-freight-transport.pdf – on November 13, 2017.

6 “Automated Truck Policy,” as approved and released by the Board of the American Trucking Associations, October 24, 2017, accessed at:

http://www.trucking.org/ATA%20Docs/News%20and%20Information/docs/Proposed%20Automated%20Truck%20Policy_24OCT2017_final.pdf – on November 13, 2017.

*Cover image taken from:

https://www.google.com/search?q=highway&source=lnms&tbm=isch&sa=X&ved=0ahUKEwiMy-7Z_77XAhUmsVQKHXWGDukQ_AUICygC&biw=1440&bih=803#imgrc=m0REimIPPdqBGM:

 

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7 thoughts on “On Trucking Automation: How the Technological Road Forward Could Leave Millions Behind

  1. One way to ease the pain would be to allow people to retire ‘naturally’ i.e. no new trucking jobs, but current ones aren’t cut either at least until the trucker retires. Therefore would-be truckers have time to figure out what they’d do instead and current ones aren’t kicked to the curb.

    In regards to the UBI question, I’m personally a big proponent but I think it needs to be coupled with a large overhaul of the education system to retool kids for the 21st century economy. It’s just much harder and more painful to retrain someone that’s completed half a career in the same role.

  2. I’d add that the actual count of trucks on the highway will drastically go down, as automated trucks will not require sleeping breaks, which currently add huge cost and delay to the overall shipping process. Truck crashes due to lack of sleep were a huge issue for the industry, so there are now regulations in place to force sleep at regular intervals. Being able to drive for nearly 24 hours a day will make shipping via land for 2 day/ express delivery much more viable in situations that would have previously used air freight.

    While there will be huge losses in trucker jobs, I believe this will be more than offset by the increased demand for labor in industries that support the change to autonomous trucking. First of all, it is not feasible to add automation to existing trucks, so a huge number of automated trucks must be built over the coming years to replace the aging fleet. Second of all, additional labor will need to be in place to support autonomous truck refueling for both gas and electric trucks (they will likely not fuel on their own). Thirdly, the infrastructure needed to support electric truck refueling along all major highways will be colossal, and I believe that the creation of this new infrastructure will create a large number of jobs.

  3. Great summary of an interesting topic. I am pleasantly surprised by how proactive the American Trucking Association seems to have been in addressing some of the potential risk factors associated with the automation of trucking. Given the overall disruption that automation is likely to cause across the economy as a whole, I’d like to see the ATA collaborate with other industries to also push proactive policies to shape adoption of the new technology.
    I find the level of concern over job loss to be interesting as well. Every time there has been a major technological innovation, there has been significant societal concern about what that might do to overall employment, yet humanity consistently finds innovative ways to create new jobs. I still think there needs to be a dedicated retraining program (as you alluded to) in order to ease the transition, but I don’t think we need to look at a universal basic income yet.

  4. This is a great piece, thanks Graham. One thing we haven’t necessarily addressed here is the impact of job displacement via digitalization on employees who actually REMAIN with the company. There is a huge risk that, if not handled properly, these trucking and logistics companies could do irreparable damage to their cultures. When employees are laid off through no fault of their own, I believe employers are responsible for doing what they can to ensure those people find a new home. Several software and services solutions exist for the process of “offboarding” that help find new jobs through interview preparation, resume help, job postings, etc. If employers don’t make helping these employees a priority, they could send an extraordinarily negative message to those who remain.

  5. Fascinating read, thanks Graham! While I agree with Eerik and E-nonymous that automation will likely result in a net positive for the economy as new industries are created, this is no consolation for the individuals losing their jobs. In practice, those who lose their trucking jobs will generally not be able to take advantage of new industries because those jobs are in a different location or they don’t have the required skills, particularly if no programs are put in place to help them manage the transition. We should remember the lesson we’ve learned in class, which is that people generally want to do the jobs they have been hired to do. It is very difficult for someone mid-career or later to suddenly do a completely different job out of necessity. I do believe society will be better off in the long run, I also believe we as a society have a responsibility to mitigate the pain that these economic transitions will inevitably cause.

    I also wonder if the ATA is the right organization to address the challenges of job displacement. I would think that if trucking jobs disappear, then the ATA will as well. I’m inclined to think that it is instead the job of policymakers and employers to develop programs that mitigate the pain of job displacement from technology.

  6. This was a very interesting read, so thank you for sharing. At first glance, it does seem concerning that an entire, critical industry could seemingly lose its dependence on human employees quite quickly. But, I dug further into one of your resources (the International Transport Forum report) and realized that there are potential scenarios where this transition plays out without too significant of an impact on truckers.

    AGE
    The report indicates that heavy truck driving is typically done by middle-aged men. While 2.5% of all employed, US males between 45 and 65 years old drive trucks, less than 1% of those aged 21 to 30 do. In the last decade, the age disparity has only widened, with the 45-65 year-old age bracket being the only segment to increase as a percentage of truck drivers. The average age of a US trucker is 47.5. All of this support’s Peter’s recommendation that the trucking industry allow people to retire naturally, while not hiring new truck drivers to take their place. Depending on how rapidly autonomous truck driving becomes prevalent, the natural reduction in the supply of truck drivers may just coincide with the decrease in demand.

    URBAN TRUCKING
    The report also reminds us that a trucker fulfills many responsibilities, beyond driving on the highway. An urban trucker, or someone completing the last mile of a long-haul delivery, is also accountable for choosing the driving route, theft prevention, interactions with the shippers and the customers, and loading and unloading goods. Overall, autonomous truck driving will bring greater efficiency and lower costs, increasing the demand on trucking as a whole. This would lead to more deliveries and more last mile activity. The increased job opportunities in urban trucking can serve as jobs for truckers to transition into if they are not ready to retire when autonomous trucking really takes over for long haul routes.

  7. Very interesting read. One initial thought that I had was whether the timing and impact of this paradigm shift will be influenced at all when incorporating the technological capabilities of autonomous vehicles to execute the first- and last-mile portions of trips. For example, the first example cited in this memo only addresses the portion of the drive that the truck spends on the highway. Evidence to the current date suggests that self-driving technology has been significantly more successful at achieving progress on highways versus more smaller and more heavily populated streets, where all trips must invariably begin and conclude.

    Another consideration is whether regulatory bodies, the trucking companies, and the customers will all be comfortable with the notion of goods being transported by autonomous vehicles, particularly for higher value goods that carry more risk of transportation mishaps. One alternative middle ground could be “partially” self-driving trucks, where a driver manually conducts first and last mile (ie. does all the non-highway driving), and the ADS only takes over on the highway (where I would assume accidents are more common during long hauls).

    Finally, another consideration here to consider is that the general assumption seems to be that autonomous vehicles will naturally be better suited for electronic vehicles for a number of technological and logistical reasons. While Telsa has unveiled their plans for an electric-powered truck, this would beg the question of whether the necessary charging ecosystem existed for trucks to use, and again what complications that might engender if it requires the truck to exit the highway.

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