The world has gone digital and so has logistics. E-commerce is thriving and expected to reach over 95% by 2040. This ascending trend has been accelerated by the coronavirus (COVID-19) with demand being skyrocketed for everyday items such as groceries, clothing, and tech items.
The article “Distraction or Disruption”: Autonomous Trucks gain ground in US Logistics by McKinsey indicates that this sustained upward trend in e-commerce is making a profound impact on the logistics sector, including its structure, operations, and profits. McKinsey states that autonomous trucks (ATs) will change the cost structure and utilisation of trucking, which goes hand in hand with the cost of consumer goods.
McKinsey also highlights that 65% of the nation’s consumable goods are trucked to market. This implies that full autonomy would reduce the operating costs by 45%. This is indicative that self-driving vehicles have the potential to turn around logistics. A large deployment of ATs is closer due to the promising results offered.
Lower costs are critical benefits that ATs bring to the trucking industry, together with other benefits including improved safety, greater control, and higher efficiencies.
In its research, McKinsey estimates a 45% Total Cost of Ownership (TCO) reduction. This percentage is very similar to that stated by the DHL study referenced by Triskele Logistics. DHL’s findings indicate that autonomous driving could lower the cost of freight by 40% per kilometre. This is also aligned with PwC research, which pinpoints a 47% lower trucking logistics cost by 2030.
According to a DHL article, up to 90% of road traffic accidents are due to the driver’s performance. A factor that plays a key role in such a high percentage is the extensive use of smartphones. Due to the distractions caused, the number of accidents is increasing.
ATs would respond to changes in traffic and weather, minimising human errors. Nonetheless, confidence in ATs’ technology has been impacted by the fatal accidents in which a Tesla car driving on activated autopilot and an autonomous Uber vehicle were involved, as stated by All Things Supply Chain.
This publication indicates that the number of incidents would decrease with ATs, but, to gain or regain trust, ATs will need to be significantly better than humans.
Drivers become passengers, and with it, driving turns into a relaxing and more inclusive experience. The elderly, underage, and people with physical disabilities would have a solution for their transportation needs.
As ATs allow for better working conditions and increased safety for the drivers, a truck driver career also becomes more attractive.
PwC study suggests that self-driving trucks will drive an average of 78% of the time, in comparison to an average of 29% today. Consider that there is no need for driver rest breaks. Indeed, ATs will be able to plan their routes to avoid peak hours. This will facilitate daily traffic and result in less congested roads, as there will be more urban miles driven at night and less in rush hours.
Research also suggests that ATs will drive more efficiently than humans and thus will bring benefits to the environment. Not exceeding the speed limit when driving averages 17% higher efficiency at 55 mph vs. 70 mph. There are other added benefits including less wear-and-tear on the roads, which in turn, is reflected in less maintenance. Such “liberated” funds can be applied for other uses.
Last Mile Delivery Improvements
ATs also impact last mile delivery. In its report, DHL indicates that autonomous driving will transform last mile delivery through technologies, including parcel station loading, shared-cars, and self-driving parcels.
Currently, couriers drive delivery vans, make attempts to find a spot close to the delivery address, and get the package or parcel to the customer’s doorsteps. This implies getting in and out of the van several times a day.
ATs would transform this process. This blog post suggests two scenarios:
- After delivering a package, the courier would hold onto a handle, similar to that on a garbage truck. With this, time and process efficiencies would take effect.
- Another option would be to have the next package ready after each delivery.
Road Transport Advantages
When it comes to road transport advantages, ATs offer many including the following:
- Solution to drivers’ shortage
- Potential to increase speed and flexibility of freight flows
- Trucks can operate at all times – no driving bans, no need for rest stops, or in general, no restrict operations
- Speed of transport would rise, as ATs can drive more safely and economically
Better Warehousing Operations
Research by DHL highlights that shipping companies will probably be the early adopters, as moving cargo in non-public areas such as warehouses and storage facilities allows them to test ATs with less risk to human life.
The study by McKinsey indicates that ATs will have a significant impact on warehouses and distribution centres, as well as on fulfilment centres. Such a study explains that AVs will simplify and reduce the cost of 24/7 operations. In addition to this, e-commerce will move faster, as picking and shipping can be performed at any time. Furthermore, the per-unit cost of warehousing will be lower due to the ability to turn inventory more quickly.
The high percentage of savings that could cut logistics costs in half refers to full autonomy or wave four, per McKinsey paper. The first two waves require a technique named “platooning”. This implies connecting a convoy of trucks to a lead truck wirelessly. As a result, trucks can operate closely in a safe manner and obtain fuel efficiencies.
In Wave 1 a truck driver is required; while in Wave 2 there will be a driver in the lead truck and unmanned trucks following it. Wave 3 implies unmanned trucks on interstate highways without platooning. Wave 4 – full autonomy – is defined by the deployment at scale of ATs without drivers, from loading to delivery.
Below are the key points by wave.
- Wave 1 – two drivers platoon, two trucks on interstate highway. Driver drives individually on non-interstate highways.
- Wave 2 – platooning only on interstate highways between dedicated truck stops with two trucks, with a single driver in the leading vehicle. Drivers drive individually on non-interstate highways.
- Wave 3 – autonomous truck ride on interstate highway without drivers (platooning two or more trucks when possible). Drivers drop off trucks at dedicated truck stops.
- Wave 4 – autonomous trucks ride individually on all highways and in platoons of two or more trucks. The driver involvement is eliminated throughout the journey.
WHERE WE ARE AND WHERE WE ARE HEADING
A recent blog post, dated June 2020, from All Things Supply Chain indicates that autonomous driving is an evolutionary process starting with Chrysler Cruise Control in 1958, throughout the state of technology today with the semi-automated vehicles going to automated trucks, highly automated driving; up to fully automated or autonomy, where the car itself makes decisions.
Some companies have hit the pedals on the way to full autonomy. An article from June 2020 entitled “Walmart’s self-driving partner is changing e-commerce economics” tells the progress made by Gatik, a self-driving vehicle start-up with a focus on the middle-mile.
The article states that “For three years now, Gatik has been strapping sensors all over vans and small trucks and moving groceries from large distribution centres to small warehouses, albeit with a human back-up driver aboard.” During last summer, Walmart became one of its first customers.
The pandemic has added fuel to this transformation in logistics and most companies are rethinking and retooling their supply chains. Will self-driving trucks become the new norm? Will this be for you?
Yojee is a cloud-based SaaS logistics platform that seamlessly and uniquely manages, tracks, and optimises freight movement along the entire supply chain. With cutting edge technology, Yojee can help you to assess your best next move to improve visibility, accountability, and control of your supply chain. If you want to connect with a Yojee team member, and hear about how we are helping some of the largest Global Logistics companies in the world solve their most complex problems, click here.