The trucking industry – the leading means of transporting goods in Western economies – must prepare for any disruption. Vehicle automation, electrification and digitization will revolutionize the trucking industry over the coming decades, according to a new analysis. While disruption will undoubtedly pose significant threats to existing businesses, the industry as a whole can accelerate the pace of business, cutting up to 40% of operating costs.
In countries such as Germany, France, Spain and the Netherlands, trucking is the most widely used means of transporting goods. According to estimates by national statistics bodies, about 70% of the total freight tonnage transported in Europe is transported by truck, a similar proportion to the United States (70%) and higher in China (75%).
According to researchers from Roland Berger, a German-origin strategic and management consulting firm, says three technology trends – automation, electrification and digitalization – are set to revolutionize the trucking industry. The authors doubt that the first fruits of these technological developments are already visible today. When it comes to digitization, the emergence of new digital platforms such as Convoy, Uber, JB Hunt 360, CHR Freightview and XPO Connect is changing the mechanics of freight booking. Within companies and across ecosystems, digital technology plays an essential role in driving innovation and collaboration, a development that is part of a broader trend In the broader logistics industry.
In the field of electricity, multiple examples of innovation demonstrate the potential of electric trucks. For example, startup Nikola announced a hydrogen fuel cell truck for long-haul applications, while green car company Tesla is working on a battery-electric semi truck focused on short- and medium-range applications, with ranges of 300 miles (480 km) and 500 miles. (800 km) Range options. Meanwhile, the move towards autonomous driving – according to Strategy&, Self-driving vehicles will account for half of the kilometers traveled in the EU By 2030 – it is also foraying into the truck industry. All over the world, experiments with this technology have been conducted.
TuSimple, a China-based self-driving truck technology startup, is testing a fleet of self-driving trucks at a deep-water port in a northern Chinese city. In the United States, startup Embark has been operating automated trucks on the I-10 freeway between El Paso, Texas, and Palm Springs, California, since the end of 2017. And in the Netherlands, which is considered the world’s best location for self-driving. Driving vehicles Against the backdrop of its modern infrastructure, a strip of highway on the A58 between Helmond and Tilburg has been freed up for testing self-driving cars and trucks.
Greener trucks
Successfully transitioning to electric vehicles has a range of benefits, across increasingly broad groups of stakeholders. Increased fuel efficiency and lower CO2 emissions contribute to sustainability goals, while a more organized traffic network would enhance the urban landscape and reduce the number of injuries on the road. These factors also apply to the trucking industry, although Roland Berger consultants point out that many of these benefits depend on context. In the United States, the primary driver of truck electrification is the total cost of ownership (TCO) benefits derived from fuel cost savings. The fuel cost per mile for a diesel truck is about $0.34 at today’s fuel efficiency level and diesel price. An electric truck can run for about $0.2 per mile at the current electricity price – 30% less than a diesel truck. The authors predict that “this cost could grow by 40% in the near future.”
In Europe, the main aspects driving developments are the total cost of ownership and planned intra-city restrictions on diesel vehicles, while in China, progress will be mainly driven by the need to solve the local air pollution problem, and the government is therefore keen to remove pollutants. Trucks off the roads.
The study indicates that electric trucks with a range of about 400 kilometers, the vast majority of which are in many regions, will be cost-effective during the first five years of the new acquisition. However, given current battery technology, electric trucks will likely remain impractical for long-distance trucking over distances greater than 1,200 km, largely due to battery size and long payback period.
Automated trucks
Automation maturity in the trucking industry is scheduled to progress along five stages, from no automation to full automation. The timeline for the development of full automation remains in major doubt, however, and critics place full automation — the fifth phase — at some point after 2025. High automation, which only requires input from the driver in difficult terrain, is scheduled to be ready by 2025., while lower-tech, partial and conditional forms of automation are touted as being deliverable for new trucks by 2020 and 2022 respectively.
While the technology is set to develop relatively quickly through the early to fourth stages – the relative payoff for trucking companies – no need for a driver – is unlikely to arrive until the technology matures and more complex situations can be modeled.
The shift to driverless technology is set to require significant investment from both manufacturers and OEM players, with more than $1 billion invested in research and development to create the technology for Level 4 automation, as well as on the module side – with about $15,000 more to come. For each truck unit sold initially obtain Level 4 autonomous trucks with hardware contributing the most to the cost, followed by development costs. Overall, the price is expected to decline rapidly as the technology matures and scales up, with producer margins expected to decline.
Another example of the benefits of automation is “truck platooning.” Using automation, trucks can drive a smaller distance from each other, usually 10 to 20 metres. This reduces vibration at the rear of the lead truck as well as the high-pressure area in front of the following truck. Reduced air intake reduces fuel consumption, typically by 4% to 5% for the first truck and 10% for the second truck, meaning an overall average savings per truck of 7.5%. This approach is supported by a vehicle-to-vehicle wireless link between the trucks, enabling connected braking and driving.
Smart trucking
The benefits of digitalization will fuel many areas of trucking operations. At the logistics end of the value chain, digital technology can be combined with data analytics and AI algorithms, automating the largely manual, phone-based freight capacity and order matching process. “We expect to see shipping booking and optimization platforms emerge and disrupt the industry in the same way that booking platforms disrupted the travel industry,” the authors said. This development will initially apply mainly to standard shipping, which represents about 25% to 30% of shipping volume today. Better booking will boost capacity in the industry – about 20% of trucks in the West currently travel empty.
AI can also revamp the way dispatching is done in industry. “Artificial intelligence is the key to solving the ‘dispatcher problem’, predict Roland Berger’s consultants. This task at hand is very complex, involves many uncertainties and requires coordination of a large number of moving elements. Intelligent machines provide the computing power to instantly decide on optimal planning and routing with enhanced Customer experience through a more informed process.
New business model
“Change of Speed,” which combines the three technology-led trends, “has the potential to reshape the trucking industry’s business model,” the authors state in the report. As a result, a number of developments will occur. The truck fleet and its composition will change, and companies will have to invest significantly in adopting technology within their core processes and operations. Increased competition, including new technology players entering the market, such as Amazon’s entry into healthcare or the technological revolution in banking, will mean that shipping rates will come under pressure. It is expected that more regulation will be deployed to reduce the risks of self-driving. Overall, consolidation in the industry is inevitable as scale becomes a differentiator to stay in the driving seat.
New opportunities will also arise. In the scenario the authors describe as a “transport hub,” which blends traditional and autonomous trucking through an interchange hub, total operating cost savings can exceed 20%, and even reach 40%. These centers can also better accommodate the diverse needs of the sectors: in long-distance transportation, the focus will be on reducing operating costs, while in urban logistics, the focus will be on better customer expectations in terms of delivery speed, information and flexibility. .
“Market shifts will have far-reaching impacts on fleet operators, changing operating practices and rewriting fundamental economics. To stay ahead of the curve, trucking companies need to be proactive and start preparing now for the road ahead.
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