While doing my regular reading last weekend, I came across few articles from Forbes (link below for those interested) pertaining to truck driver shortage in US.
Now carrier capacity crunch and driver shortages in a good economy are nothing new for US economy. There are several mitigation strategies from a pure supply chain and procurement strategy aspect. However,one thing that went through my mind was-with all the investment (in terms of money and brains) going into self driving vehicles, will self driving trucks alleviate these issues in the future?
First of all-Are self driving trucks practically feasible?
Autonomous, self driving trucks are no longer a concept. For those of you who missed the recent developments, below are some links (I like the one that pertains to beer delivery-my kind of beer game!).
However, let us focus back from Beer to Self driving trucks. Common sense dictates-driver less trucks = no constraint of driver shortages. And that should happen, once we get to a point where we can develop vehicles advanced enough to match the skills and flexibility of human truck drivers.
Have you ever seen a truck driver navigate the streets of Manhattan, NY? It is amazing how they actually manage to haul that 53 foot trailer through narrow streets, busy intersections and crazy left turns. Honestly, I don’t think that we will be able to develop self driving trucks that can navigate these aspects in the near future (but maybe in the long term).
Now the enthusiasts will say that we already have self driving cars that can navigate such busy traffic. However, the physics of a large vehicle like a tractor-trailer combination works in a much different way than a compact car (which are most often used in testing self driving technologies). Human elements are more at play here-specifically in busy urban areas. We can obviously have self driving trucks in different sizes but then your investment in the number of assets increases significantly.
Also, last mile deliveries are much more than physical deliveries. For many companies, it is also about customer interaction/service and also can be a good mean of gathering competitive intelligence.
So how can we leverage self driving trucks in the near future?
The point that I was trying to make in the previous section was that self driving truck may not be the magical solution to your truck transportation woes across all the legs of your Supply Chain.
At a high level, we have three “miles”, or legs in Transportation. The “First mile” typically is the leg from the source of product to the closest DC or hub. The “Middle mile” is the leg from the first hub to the hub/DC closest to the customer and the “last mile” is the final leg from that DC to the customer/final destination.
If you think about these legs, the first mile and last mile typically require more human interaction/involvement. Also, the entities interacting may be different i.e the pickup truck and the loading DCs are entities from different companies. Similarly, the delivering driver is representing a company to the end customer.
And on top of that is the human element of driving in urban areas that has already been discussed. Considering these aspects, the best candidate to incorporate self driving trucks in the near future, as per my perspective, is the “Middle Mile”.
Numerous advantages delivered to Transportation
- No constraint on driver hours means longer routes with lower costs (eliminates need for team drivers)
- 24 X 7 asset utilization (with some downtown for maintenance)
- Reduction in labor costs (includes OSHA compliance costs)
- Safety concerns are mitigated (Bots don’t get tired and can follow precise driving techniques throughout the trip)
Impact on the jobs for truck drivers
My thinking in this domain actually differs a bit from other thinkers who believe that like warehouse automation, self driving trucks will eliminate/take jobs of truck drivers.
Automated robots moving within confined spaces in warehouses can not be compared with a self driving truck. As I mentioned earlier, it will be extremely challenging to develop a self driving truck technology that can successfully navigate the first and last mile.
The structure of truck routing operations may look something like this:
As you can see, you still need drivers for the first and last mile. The number of drivers required will not decrease significantly (if it decreases at all). I believe it may actually increase, since you now need people who can “train” these self driving trucks.
So the gist, from a labor perspective is that it may not lead to elimination of truck drivers. With long hauls managed exclusively by self driving trucks, trucking will be less arduous and more family friendly and so we may end up attracting young workers into this domain.
Integrating with a Digital Control Tower-Creation of new job roles
Those of you who are well versed with Truck transportation know that companies equip their trucks with dashboards,tracking devices and sensors these days. Through some driver interaction with the monitors in these trucks, they collect data feeds as the trucks move. Now tracking the trucks real time is something that best in class companies have been doing for some time now. However, capturing data being relayed by trucks in real time and leveraging that to make real time decisions is something that organizations don’t do yet.
Seamlessly integrating self driving trucks with Control towers can be immensely useful for the companies, not only in terms of the having visibility but also in terms of the valuable data that they can collect.
As indicated earlier in the post, there is a substantial human or “tribal knowledge” element in truck driving industry. Things that expert drivers know about their routes is amazing and converting or capturing this into deep learning and/or neural network algorithms will be challenging.
How will this impact the design of supply chains?
Self driving trucks will provide flexibility to the company in designing their Supply chains.
Companies generally decide on location and number of warehouses based on their service levels. This service level is generally defined in terms of the driving distance between warehouse and customer location. So as an example, if all the customers need to be serviced within a day, with the current DOT restrictions on driver hours, that means DCs should be within 600 miles of customer location.
With a self driving truck, the number of hours that a truck can be on the road will increase significantly, the “same day” distance therefore increases significantly and hence companies can leverage fewer warehouses, while still satisfying the service level criteria.
Alternatively, with substantial reduction in transportation cost, some companies may decide to invest in more warehouses, getting closer to the customer to implement strategies like 2 hr delivery windows.
Conclusion? We may not be there yet
My take is that it may take at least 5-10 more years to get to a point where self driving trucks can be integrated seamlessly with current transportation networks. However, this is definitely something that can give organizations a competitive edge hence they should start working on incorporating this in their future state strategy sooner.