Electric trucks, autonomous trucks, ELDs, logistics connectivity … the trucking industry is experiencing technological innovation and disruption at an incredible rate. How we adapt to this brave new world matters.
My last few IdeaXchange blogs deal with trends, challenges and opportunities that the trucking industry faces. The challenges include government regulations and driver/ technician shortages. But the biggest trend, which promise both challenges and opportunities, revolves around the constant development of new technology.
Innovation often starts small
Large companies, especially those that are successful or those that have been around for a long time, are often very invested in maintaining the status quo. Their challenge is to achieve growth by making incremental, not large, innovative change. Why? Because there is always a risk when trying something totally new.
When we look at the biggest names in technology, people like Steve Jobs, Bill Gates, Jeff Bezos, and Elon Musk, we see people who are risk-takers. They are willing and able to absorb failures and losses as startups. Ultimately, they have created immensely successful companies that have been major disruptors.
We see this occurring in our own industry as well. Back in May of this year, Transport Topics ran an article that detailed how investors are viewing these new technologies. That article noted that $2B had been invested in trucking tech firms in the first five months of 2019 alone. That $2B was a result of 27 deals, according to Hyeri Kim from CB Insights, the company that conducted the research.
These investments were in small tech companies and startups that focused on a variety of areas, including logistics and supply chain technology. The research firm found that “funding activity for trucking tech startups jumped from 34 deals resulting in $114 million in 2014 to 78 deals resulting in $.6 billion in 2018.”
What is driving this push for new technology? It is the understanding that clear, real-time, accurate data is absolutely essential in a global economy that is moving exponentially faster every year. That globalization has increased complexity throughout the entire supply chain and, with the ongoing push to do more with less, assessing and analyzing data has become essential.
The road ahead for trucks
Even though technology to improve logistics and supply chain performance is advancing and drawing investments, what the industry is keeping a close eye on is the capital equipment that is their most costly expenditure – the truck. Here also, startups play a valuable role. Just last month, Transport Topics published an article, “Tech Startups Cite Progress on Path to Self-Driving Trucks.” This article states that “Companies such as Embark, Ike, Kodiak Robotics, Starskly Robotics and TuSimple evaluated their progress with computer simulations and runs on test tracks and along stretches of public roads. Some even hauled freight.” I highly recommend reading this article as it details the different ways each company is addressing the many issues this new technology faces.
While we keep saying that each new development is somewhere in the future, it seems that the future is already here for some advances. Electric Class 8 trucks were thought to be far in the future when first developed by companies like Tesla and Nikola. Yet in August of this year, a Transport Topics article notes, “The first two production-model Freightliner eCascadia battery-electric tractors are in the hands of their new owners and about to begin an evaluation process intended to help pave the way for the integration of electric trucks in large-scale fleet operations.” Volvo and other OEMs are following suit.
We now hear the same thing about autonomous trucks; how it will be quite a while before these trucks are seen on major highways. But if the past is prologue, we know that likely won’t be the case. Although there are many more issues to deal with than electric trucks, we also know that once a new technology takes hold of the imagination – and once companies understand the benefits that will accrue – the future looks much closer.