Increased corporate awareness of climate change in recent years, alongside fluctuations in oil prices, has imposed the necessity for many corporations to lower dependence on fossil fuels in critical areas of their operations, such as the transportation of goods. New regulation for the automotive industry in the EU and US has trended towards stressing the need to reduce emissions to address climate change; forcing manufacturers to find innovative ways to make operations fuel efficient. Daimler AG, a German automotive manufacturer, and one of the largest truck manufacturers in the world, is investing heavily in autonomous driving to try and address some of these challenges. On a larger scale over time, this transformation will lower the carbon footprint of the organization on the environment, and at the same time lower the transportation costs of goods, vis-à-vis lower fuel consumption, as fuel accounts for a significant portion of the operational costs of heavy duty vehicles (HDV).
In May 2015, Daimler introduced its first fully licensed self-driving semi-truck onto US highways. As Daimler integrates these autonomous vehicles on an initial smaller scale, making an impact in the shorter-term is being address through the techniques and methods applied. A recent study found that a driving method known as platooning, where a fleet of vehicles drives a few feet apart from each other reduces air drag, saves up to 7% in fuel. In September 2017, Daimler announced that it had begun testing the technique of platooning in Oregon after receiving permissions from the Oregon Department of Transportation to begin to integrate more autonomous vehicles into operations in the medium term. According to Roger Nielsen, CEO of Daimler Trucks North America, “[platooning] stands for more efficiency and safety.” These efforts have been enabled by advances in technology that allow faster communication between vehicles, essentially lowering the response time to less than that of a human, thereby allowing vehicles to drive very close to one another.
Daimler’s testing of this technology at this stage will provide it an advantage in the marketplace going forward. Daimler’s prioritizing of innovation places the corporation in the forefront of technological evolution as well as in a position to shape related policy in the US and Europe. These changes have the potential to help grow Daimler’s market share, as well as set a new standard for the truck industry to adopt platooning, and reduce costs and consumption of fuel. In the longer-term autonomous truck driving will also decrease the number of road accidents through eliminating to element of human error in operational necessity.
While Daimler is putting many resources into autonomous driving, there are other ways the organization could invest in increasing its fuel savings costs following the lead of competitors like Tesla or Nikola Motor Company. For example, Tesla is working to develop electrical trucks, while Nikola is developing hydrogen-powered electrical autonomous-driving trucks to lower fuel costs. Both companies are coupling the technology of electric vehicles with platooning to further address environmentally problematic aspects, and reduce the carbon foot print. As such, Daimler should do more to explore incorporating alternative energy sources, such as biofuels and electricity, into operations, to decrease the dependence on fossil fuels, and further increase fuel cost savings.
To be successful, Daimler needs to work closely with governments worldwide to create a regulatory framework that will allow the adoption of platooning technology. Daimler will also need to ensure customers that autonomous trucks in general, and platooning specifically, will provide significant benefits to the industry and market at-large. Furthermore, Daimler will need to demonstrate that the benefits derived from these operational changes are worth further investment in these technologies and worth the battle this kind of industry shift will bring with traditional stakeholders like drivers and unions over issues of job elimination through automation.
Looking forward, a main question that remains will surround the cost savings of platooning at scale with multiple autonomous vehicles. Today most businesses transport goods using only one truck at a time – how will businesses and manufacturing need to transform to realize these potential gains? At cost, which players will be able to afford the fleet-scale needed to create the opportunity to benefit from this model?
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