Not an autonomous truck, but an autonomous transport solution that offers a new business model.
What is interesting is that this assignment is the first of many, where established truck manufacturers will offer their transport solutions directly to transport buyers, such as Brønnøy Kalk.
So, who are “transport operators” of the future?
Take a typical transport for a large shipper, say IKEA, P&G or Lufthansa. Today there are a number of transport companies bidding to cover transports between their hubs, terminals, and warehouses. This is typically a more predictable transport environment, with many fixed routes, known well in advance, with a lot of motorway driving.
By 2030 these and other shippers could have many “transport solution providers” bidding for the same transport contract. Who could they be?
- Multiple transport operators (as is the case today).
- Well established truck manufacturers offering automated transport solutions
- New truck manufacturers/transport solution providers, such as Tesla and Einride
- Startups, developing self-driving technologies to retrofit trucks, such as Embark and FluxAuto, who could enter the field of providing transport services
- Large logistics players, who have perfected their own logistics chains and might expand their service-offering to transport. Amazon for example.
- Entirely new market entrants that we cannot even foresee today.
Finally, and most likely, there may be consortia consisting of some of these and other stakeholders.
Trucking is dead! Long live trucking
Should transport companies be afraid?
Afraid – no. Aware – yes.
The trucking business is one of the most competitive industries. The vast majority of truck fleets are small. Taking USA as an example, 91% of fleets have six trucks or less. Competition has always been fierce in trucking and stakeholder roles will continue to evolve even in the future. Competition for performing different assignments/tasks/jobs is highly welcome, as long as all stakeholders follow the same rules and regulations. Constant evolution is a key to securing your place in business.
A great example of how companies can not only survive but can thrive by being adaptable is CTS Group in Netherlands. They started as freight forwarders, bought trucks and became a transport company. Through their cooperation with some 500 stakeholders across Europe, they became part of a distribution network and ultimately evolved into a distribution centre thanks to their highly automated warehouse. Each of these steps required a new business model. They transformed their role and multiplied their value-offering to their customers by four over the course of 23 years!
For some of the most repetitive trucking assignments such as driving in a mine or between two terminals it will be increasingly difficult to attract young drivers to perform these jobs. In these cases, automation will be most welcome to complement the transport needs.
Still, this work today is performed by transport operators who will need to look into the future and think about their value proposition to supply chains.
Just hiring drivers who can drive from A to B and back again will not be a recipe for long term survival, you will need to provide additional value to the supply chain.
The complexity of the majority of transport operations in the real world, as I was recently reminded by young transport operators and professionals from different regions, goes well beyond just steering, accelerating and stopping the truck. In transports of live animals, dangerous goods or oversized transports, for example, autonomous trucks will not be viable solution for the foreseeable future.
So what about the jobs?
Did this week’s automation kill six truck driver jobs in Brønnøy Kalk?
Not really! In these days of driver shortage, when the industry has huge difficulty attracting new talent, we should not mourn a few “lost” truck driver jobs in a mine as these jobs have been some of the most monotonous you can find in the industry. Truck drivers that were transporting limestone until yesterday will be able to find more interesting trucking jobs elsewhere.
Volvo’s self-driving trucks in a mine environment is a welcome complement to the transport industry, releasing six highly skilled drivers for more complex trucking assignments.
Transport demand is forecasted to grow by 230% for freight transport from 2015 to 2050 (primarily in non-OECD countries), and the gradual introduction of automation will, in my personal view, not be able to compensate for that growth alongside the forecasted increase of driver shortages. Thus, truck drivers should not fear being without jobs in any foreseeable future.
Still, to look into different possible scenarios of vehicle automation introduction and their potential impact on truck driver jobs, I would recommend reading the ITF report on the topic.
In addition, as with other industries, automation does not necessarily replace humans, but rather complement the human element by taking care of the simple tasks that require consistency and accuracy, while allowing the human jobs to evolve into more complex tasks, that require emotional intelligence or imagination.
So how can transport operators survive and thrive in the future?
From a recently published IRU survey, we see that over three quarters (76%) of transport companies expect autonomous trucks to become a viable option within the next decade. But those same companies may be less able to predict how this will change their businesses and what they need to do now to prepare.
If you are a transport operator, you should focus today on digitalising processes and operations. Removing paper, removing manual planning, paper-based proof of delivery and other similar tasks from the logistics chain will enable businesses to optimise operations in the meantime and to be more competitive. And this is happening. As IRU data indicates, 65% of transport operators are planning to invest in new digital services in the near future and a recently published IRU digitalisation position outlines IRU’s work to make this happen.
Finally, transport operators need to stay ahead of the curve and follow the latest trends while debating the changes with front runners, both other forward looking transport companies but also vehicle manufacturers and service providers.
One opportunity will be at the IRU Logistics & Innovation event, which will take place later in 2019. This is especially important for the younger generation of transport professionals and leaders, who need to make sure that their companies can thrive in 10, 20 or even 30 years from now.
While nobody can predict the future exactly, we can be sure it will not be kind to those who do not adapt.
