Follow the Money

Industry often circles its wagons around its pet projects, political causes and interests to remind itself, as much as anyone, of its relevance.

This is how we know, in the short term, what it wants us to think about. In the longer term it serves as preparation for what it wants us to accept.

To find out where the real activity is, regardless of the noise, follow the money.

The road freight industry is headed to driverless commercial vehicles, and it’s headed there – to judge by the seed capital and investments being made – fast.

Autonomous truck startups since 2019 have been the recipient of $USD11 billion.

Self-driving tech firm Aurora is already integrating its Aurora Driver for an accelerated development program with PACCAR engineers on the Kenworth T680 and Peterbilt 579 platforms.

More recently it announced a collaboration with FedEx on a linehaul program in Texas in which freight is moved on an 800km round trip between Dallas and Houston.

These developments are ahead of Aurora going public later in the year through a merger with a blank-cheque firm at a pro-forma market capitalisation of $13 billion, that it hopes will raise another $2 billion in funding. Self-driving truck startup, TuSimple, on the back of a public offering in April raised $USD1.35 billion.

The company, which has operations in Tucson, Arizona and Shanghai and Beijing in China, is determined to achieve SAE Level 4 automated driving across its operations.

Along with the pilots it is running with UPS, TuSimple has signed a MOU with IVECO and is reportedly working on a custom-built vehicle with Navistar.

Fleet management company Ryder has already announced its plans to help driverless tech enterprise, Embark, launch a nationwide network of up to 100 transfer points that will be owned and operated by the autonomous commercial vehicle developer.

Chinese-owned Plus, which has Amazon as a stakeholder, is another to have joined the public markets. Waymo, a Google owned venture, and human guidance autonomous convoy company Locomation are both playing catch up.

That’s before we no doubt hear more from Einride, Uber, Gatik and Kodiak Robotics. Trucking revenue in the United States in 2019 was USD$791.7 billion.

The commuter rideshare market, once considered the ideal test bed for driverless vehicles, pales in comparison.

In Australia road freight transport generates $47 billion yearly even before adding in the logistics component.

Labour turnover for fleets each year accounts, on average, for more than $600,000, almost a third of total expenses.

The unfavourable conditions facing commercial vehicle operators including mandatory vaccinations is expected to see another 18 per cent of drivers quit or be forced out.

That leaves a hole in a work force already forsaken skilled operators whose vulnerabilities wrought by successive union-management enterprise agreements, have hastened in the current model of casual and contract labour at the expense of permanent full-time jobs. Autonomous vehicle technology naturally makes its own business case in this real-world environment.

Even though the commercialisation of driverless trucks won’t likely be undertaken until 2024, the current situation of supply chain disruptions and therapeutic global governance, all but ensures there will be demand at the ready. Driverless truck technology involves vehicle operation autonomously without human input or intervention given the right conditions — namely somewhere warm and sunny.

Because of this it subsumes manpower rather than replaces it.

Connected devices drive data for machine learning while course corrections, no matter how uncomfortable for traditional industry, are promised by artificial intelligence.

The question, at least for now, isn’t so much what will be appointed under the immensity of networked inventory but what won’t.

At what point do humans get counted as part of the Internet of Things?