Autonomous transport: Where to from here?
The digitisation of the commercial vehicle space has progressed rapidly since Germany’s Daimler corporation unleashed the Freightliner Inspiration Truck on the industry two years ago. But has the game truly changed?
In the spring of 2015, Freightliner made headlines with the presentation of the first road-registered autonomous heavy vehicle in the history of commercial road transport. The company’s ‘Inspiration Truck’ had received official clearance to operate on a public highway in the US state of Nevada and, for a glimpse of a moment, made the whole world pause and marvel at the ingenuity of modern truck manufacturing.
Since then, however, it has become quiet around Daimler Trucks North America’s (DTNA) landmark project, which had swallowed some $4.3 billion in research and development investment over the ten-year period leading up to the launch, according to DTNA.
On the surface, the reason for the rapid reversal could be clerical in nature: Despite Freightliner being able to demonstrate the technical viability of the Inspiration Truck concept, going public with it instantly kicked off a debate on the political and socio-economic impact of autonomous driving that voided much of the project’s initial magic and has still not been resolved.
But politics are only part of the equation, seeing that Freightliner’s European cousin, Mercedes-Benz, went on to operate the world’s first autonomous production truck on a public highway less than half year after the US launch, and that a range of incumbent businesses in the US and Japan also continued to explore the idea.
So what happened? Three months into 2017, it is becoming increasingly apparent that Daimler et al. had to take a step back following Freightliner’s history-making reveal in a move to assess an unexpected new threat – Silicon Valley. While the establishment got back to work on making autonomous trucking commercially and politically viable, a new breed of small, highly responsive start-ups sniffed a chance to disrupt the heavy vehicle space in the same way Tesla shook up the automotive one.
San Francisco company Otto, for example, entered the scene in January 2016 with the idea of developing an autonomous aftermarket kit for heavy vehicles. Founded by former Google staff, it was acquired by Uber in August and completed the world’s first autonomous shipment – a load of 51,744 cans of beer – in October 2016. Only a year on, fellow Californian company, Embark, broke out of the slipstream with a similarly compelling concept – a form of Artificial Intelligence known as Deep Neural Nets (DNNs) that can be retrofitted to any existing truck. According to CEO and co-founder, Alex Rodrigues, DNNs “allow the truck to learn from its own experience – much like humans learn from practice”.
Taking a page from the social media industry to outperform incumbent brands in the critical transition phase between R&D and the ascent phase, Otto, Embark and the latest autonomous truck start-up to come to the fore, Starsky Robotics, effectively created a new market dynamic where the establishment doesn’t have the exclusive right of setting the industry’s innovation agenda anymore.
“There’s agreement that the competition to stake a claim to be first with a technology that promises to revolutionise commerce is intensifying,” says US journalist Chris O’Brien, who has been observing the market ever since the momentous Inspiration Truck launch and now serves as the European correspondent for trucks.com. Even though autonomous vehicles are unlikely to go on sale any time before 2020, he says the mere prospect of progress has already had a lasting effect on the industry’s way of thinking – with Silicon Valley’s involvement creating a sense of urgency that has “changed the game” for good.
“The stakes for getting there first in the truck market are enormous,” he explains. “While much of the public is captivated by stories about driverless cars, analysts and economists believe the development and adoption of autonomous vehicles will be much swifter in the heavy-trucking market.”
Chris explains the economics for the trucking industry – both with view to cost savings and enabling new services – are more compelling than in the consumer space. Quoting John Larkin, an analyst at Stifel Financial Corp, he says drivers account for about 33 per cent of trucking operating costs – a potential saving that has many a transport company pushing for a quick solution. “Eventually, self-driving trucks will just be a set of wheels, a frame, an engine and a computer,” he explains. “It will allow manufacturers to scale down the size and weight of the truck, allowing carriers to haul heavier loads and higher rates per trip.”
Chris and John agree it is crucial to acknowledge that the course for autonomous trucking is being set right now – even though the marketing frenzy around the topic may seem over the top. “In the US alone, analysts estimate that annual sales of autonomous heavy-duty trucks could reach 600,000 units annually by 2035, beginning with several thousand deployed in 2020,” Chris says – re-emphasising that now is the time for industry and governments alike to put a coherent strategy into place.
David Jochinke, President of the Victorian Farmers Federation, reinforced the message during the Australian Logistics Council’s (ALC) 2017 Forum held in Melbourne in March. “We need to start thinking about what we want our future to look like and how global trends like autonomous trucking will affect us,” he said. “We can’t ignore what’s going on, we need to think about it today. We already use autonomous or semi-autonomous technology in agricultural machinery, aviation and mining, so why not on trucks? Freight has not quite caught up with technology, but that’s no excuse to not talk about it.”
Mike Mrdak, Secretary of the Department of Infrastructure and Regional Development, was equally adamant about the seriousness of the situation: “We need to make sure we do not get in the way of new efficiencies,” he said in Melbourne – pointing out that “whole new markets” are emerging right under the industry’s collective nose. “Automation must be part of sound future planning, even if we don’t see it coming any time soon.”
Responding to Mike, Michel Masson, Chief Executive of Infrastructure Victoria, elegantly summarised the local industry’s stance on the topic in the face of growing market pressure: “It’d be foolish to assume we can predict the future, but at least we know which parameters we need to monitor,” he said. “We need to set the right trigger points and make sure that as an industry, we don’t take action today that would keep us from making the right decision tomorrow.”
Even though Freightliner’s Inspiration Truck may not have had much of an impact on the way we move freight – at least to date – it did change the way we think about the future, Chris concludes, regardless of geography. “It’s a global conversation everyone is part of. European truck manufacturers Volvo, Daimler Trucks and Volkswagen have pushed relentlessly to develop autonomous trucking [and] analysts are predicting that Tesla will reveal more details of its plan for an autonomous semi soon.
“Of course, there are still several other variables to solve – trucking companies would like blazing-fast 5G wireless networks to be in place, something that is largely out of their hands. And in some cases, new road infrastructure will be needed, either to accommodate trucks as they exit a road or special parking areas where they can get inspected and refuelled.”
Still, he says the benefits that come from autonomous driving are so tremendous that “even if there are big questions and hurdles to come, I think they will be solved.”