In October, a self-driving truck from San Francisco startup company Otto, a subsidiary of Uber, drove a trailer loaded with 2,000 cases of Budweiser more than 120 miles across Colorado, without a driver at the wheel. With this foray into cargo transportation, Uber announced the launch of Uber Freight, a platform to connect shippers and trucks.
“A lot of people thought it was going to happen with cars first,” said Michael Macauley, the chief executive officer of Quadrant Information Services, “but the application of this technology is much more practical for the trucking industry.” Mr. Macauley noted that the primary motive for the impending widespread adoption of self-drive trucking is economic. Anheuser-Busch, on whose behalf the maiden Uber/Otto beer delivery was made, has estimated that using fuel-efficient, self-driving trucks could lower the company's diesel consumption by 20 percent to 35 percent, for an annual savings of $40 to $50 million.
One group not likely to benefit from autonomous trucking, noted Mr. Macauley, was truck drivers. He observed that, according to the American Trucking Association, there are more than three million truck drivers in the United States, and that almost 10 million people – one of every 15 workers in the country – is employed in the trucking business on some level. He added that there is growing concern that if commercial trucking becomes completely or even largely automated, it will be economically devastating for small towns in America that thrive by way of supporting the long-haul trucking industry.
Nevertheless, Quadrant observed, if the technology lives up to its current promise, a large-scale disruption of the trucking industry seems not only inevitable, but already under way. Mining giant Rio Tinto, for example, is now using a fleet of 240-ton driverless trucks to move iron ore in two of its Australian mines, stating that it was cheaper and safer than using human drivers. Morgan Stanley has estimated that the freight industry could save as much as $168 billion annually by harnessing autonomous technology. The projected savings would come from lower labor costs ($70 billion), better fuel efficiency ($35 billion), increased productivity ($27 billion), and fewer accidents ($36 billion).
A wide-open question, said Mr. Macauley, was what the resulting industry might look like. The development of self-driving vehicles in recent years has been primarily a competition between technology companies and automakers working independently of each other; that dynamic changed markedly earlier this year, however, when Google announced it would expand its testing of autonomous vehicles by installing its technology in a fleet of minivans made by Fiat Chrysler. The deal was a major departure for Google, which had previously chosen to work mostly on its own in creating and testing self-driving vehicles. For Fiat Chrysler, the arrangement allowed the company to gain access to Google's expertise in driverless cars rather than develop its own technology, Quadrant noted.
“One thing that seems certain is that the self-drive transportation industry – both trucking and non-trucking – will go through a lot of change and development before it reaches any sort of stability. Along the way, insurance carriers will need to provide coverage appropriate to the risk levels that exist at each stage, at rates that allow them to be both competitive and profitable,” said Mr. Macauley. He admitted that for the industry, this will represent a steep – and continuous – learning curve.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].