One of the largest vocational fleet segments between the late 1940s and early 1960s was milk home-delivery fleets. On a daily basis, tens of thousands of trucks around the country delivered fresh bottled whole milk to an ice box on the doorsteps of millions of homes around the country. These were the last-mile-delivery fleets of the era, primarily micro-vocational fleets operated by dairies to bring their products direct to consumers.
Typically, milk trucks were purpose-built vehicles with the most popular model being Divco, an acronym for Detroit Industrial Vehicle Co. It was manufactured with almost no changes up to the end of production in 1986, making it the second longest produced vehicle after the VW Beetle. Divco built approximately 50,000 units during its 60-plus-year existence. In addition, chassis from Chevrolet, Ford, Dodge, and Studebaker were also upfitted with milk truck bodies.
In this era, dairy delivery fleets had a reputation of employing cutting edge technology. The first truck refrigeration system was installed in ice cream truck fleets and later a refrigeration van production option was first offered in the milk industry by Divco in 1954.
The first hybrid model was the 1936 Thorne C-1 milk truck, which used a gas-electric propulsion system. EV milk trucks were popular in the U.S., such as the Walker Electric Truck. By 1967, England had the largest electric vehicle fleet in the world, with the lion share of the segment comprised of EV milk delivery vehicles.
But, ultimately, the milk delivery fleet segment atrophied. In 1963, nearly 30% of U.S. consumers received home-delivered milk, but by 1975, this declined to less than 7%. With the boom of the sprawling suburbs of the 1950s, the geography of milkmen’s routes dramatically increased. The consequence was that milkmen experienced increased operating costs as they drove their trucks longer distances.
Bottled milk is a heavy payload creating dismal fuel economy. Even in an era of 30-cents-per-gallon gasoline, the increased fuel consumption took a big bite out of profit margins. As the milkmen’s total cost of ownership increased, they were forced to raise prices on their products. Concurrently, consumer shopping paradigms started to change with the emergence of supermarkets, widespread home refrigeration, and the increase in personal vehicle ownership. These factors made it more convenient for consumers to buy milk at a supermarket during their larger grocery purchases.
Consequently, milk distribution pivoted away from home delivery to direct to supermarkets. Today, a driver picks up milk from dairies and trucks it to a processing facility, where it is pasteurized, homogenized, and packaged. Once packaged, it is loaded onto distribution trucks that transport the milk to grocery stores.
Emerging Tech Disruption of Last-Mile Fleets
It took 15 years for the milk home-delivery fleet segment to cycle from its peak to its near demise, primarily due to technological disruption (home refrigeration) and new business paradigms (emergence of supermarkets). In the next 15 years – circa 2035 – will today’s final-mile-delivery fleets likewise be technologically disrupted and follow the precedent of milk-to-home delivery fleets? I say yes and the technological disruption will be three dimensional printing, known shorthand as 3D printing, which is an additive manufacturing technology that creates products by laying down layer upon layer of a substance in three dimensions.
The design of a 3D-manufactured product is digitized in a software format that is communicated to the 3D printer on how the layers are to be applied. I saw my first 3D printer in action five years ago during a visit to Geotab, which used it to replace factory shipped parts damaged in transit. Today, 3D printing is a rapidly evolving technology used to “manufacture” specialized parts in a variety of applications in manufacturing, the medical field, the computer industry, and by the military aboard ships at sea to replace malfunctioning or damaged one-off parts.
Currently, 3D printers are extremely slow and expensive, but this will change dramatically in the coming years, just as it did for numerous other high-tech products. As costs fall, additive manufacturing will migrate to more widespread, less expensive consumer products. I can imagine a time where future consumers will purchase a one-time license to 3D print products right in their home or business, eliminating the need for them to be physically delivered.
Once 3D printing becomes more commonplace, its impact on local delivery companies and over-the-road fleets that transport products from factories to distribution centers will be substantial. I predict additive manufacturing will be a game changer in how products are made and distributed, especially as online retailers reach the limit as to how much further they can compress the purchase-to-delivery process.
Remote Diagnostics to Displace On-Site Service
Are there different technological risks to other vocational segments? I think so. I postulate that the Internet of Things will disrupt vocational service fleets employing techs to service and maintain on-site products ranging from copiers to telecommunications equipment to vending machines to name a few.
The Internet of Things is the network of physical devices embedded with electronics, software, sensors, actuators, and connectivity, which enables these “things” to connect and exchange data. The number of IoT devices has grown dramatically from 8.4 billion in 2017 to 30 billion connected devices in 2020.
I believe that the pervasive digitization of business and consumer products will increase the ability for remote diagnostics and the capability to download corrective software, minimizing the need for a technician to travel in a service van to a customer’s premises. In fact, I predict that all diagnostics will be initially done remotely eliminating the need for many routine in-person tech visits. This doesn’t mean that this service business will atrophy, but rather that we may need fewer service vans tomorrow than what we have today.
As a thought game, who will be the “milk delivery fleets” of the future?
Let me know what you think.
Originally posted on Automotive Fleet
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