Eight years. That’s how long McKinsey & Company, a global logistics think tank based in the United States and Europe, predicts it will be before autonomous trucks with no humans on board could be routinely running routes in North America.
That stunning revelation is the opening salvo in the first of a five-part report on near-term technological disruption in global logistics. The initial report focuses on the advent of autonomous trucks and the remaining parts will look at the effect emerging technologies such as analytics, e-Commerce, automation in the workplace (not including autonomous vehicles), asset sharing and data and analytics.
The report’s look at autonomous truck trend lines opens by noting that trucking moves about two-thirds of all goods shipped in the U.S. and that truck driving is currently the most common occupation in more than half of all U.S. states. Furthermore, the report warns, trucking remains a “deeply traditional” industry that has experienced “few major or structural changes in the preceding decades.”
Autonomous trucks are about to change all of that forever, the report says, noting that companies have already used fully autonomous trucks to make beer deliveries and business agreements between fleets to jointly operate and profit from autonomous truck operations have already been inked and signed. Basic autonomous operating systems today range in price from $30,000 to $100,000, the report’s authors note.
Initial autonomous truck operations are already in their embryonic stages and the report predicts that the overall adoption curve will take place in four major stages, beginning in 2018 and extending out to 2027 and beyond.
In the first wave, two-truck platoons with drivers operating each vehicle with Level 3 automation will take to the roads between now and 2020, taking advantage of aerodynamics and subsequent fuel savings. Connected convoys will develop and operational algorithms and vehicle communications networks will mature and expand, leading to the second wave of autonomous truck development in or around 2023.
In the second phase, the authors predict, driverless platooning on interstate highways will become operational, with a driver in the lead truck of the platoon and unmanned trucks following close behind. When the platoon leaves the highway, the authors say, drivers will once again resume control of each individual truck. According to the report, autonomous operations at this stage of the development curve could deliver fuel and labor savings that will cut total operating costs for each truck in a fleet by approximately 10%.
The report projects that by 2026 unmanned autonomous trucks operating on all segments of the Interstate highway system and on geofenced areas (subject to weather and visibility conditions) will be normal. In this phase of autonomous technology development drivers will meet trucks at the interstate exits and other areas to drive them in more dynamic traffic conditions to their ultimate destinations. This “constrained autonomy” technology, as the report’s authors call it, is projected to produce total savings of about 20%.
And finally, more than a decade from now, McKinsey and Company expects to see the industry’s first Level 5, fully autonomous trucks hit the road, working across their entire operational scale without any human interaction at all. Once this stage of autonomous vehicle technology is attained, the report says fleets will see a stunning 45% reduction in total operating costs for an individual truck compared to today – although the report’s authors point out that even by this stage, it will still be many years before autonomous fleets completely replace fleets operating with human drivers.
The disruption autonomous trucks have on the industry will spread out like ripples across a pond, the report notes, with drivers and other parties experiencing professional upheaval. Other industry segments that could see significant disruption include railroads, warehouses, as well as distribution and fulfillment centers (which will likely bear the brunt of the first wave of disruption caused by this technology), brokers, port operators and shippers.
The trucking industry is expected to experience most of the pain caused by the disruptive nature of autonomous trucks, the report concludes, in four main ways. First, autonomous trucks will cut operating costs for fleets, although capital expenditures will rise. Second, the rise of autonomous trucks could spur consolidation of the national fleets, which are highly fragmented today. Third, autonomous trucks could alleviate the industry’s capacity crunch. And finally, autonomous trucks could create an opportunity for truck OEMs to move downstream and enter transport markets themselves.