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Autonomous Driving: A Must if Logistics Providers Are to Survive and Thrive?

Global parcel volumes are rising fast. That’s a welcome trend for the logistics sector. But a serious shortage of drivers is likely to cause major headaches when it comes to getting these vast numbers of items for delivery to their destinations quickly and efficiently. Autonomous vehicles (AVs) offer an ideal solution to this challenge – without putting workers’ livelihoods or road-users’ safety on the line.

According to a recent study, the volume of parcels transported globally grew 17% year-on-year from 2016 to 2017, accounting for revenue of USD 279b. And the number of parcels in transit is expected to top 100 billion by 2020. This meteoric growth is great news for logistics providers. But it also poses some thorny challenges.

More Parcels, Fewer Drivers Parcel volumes may be skyrocketing, but the number of truck drivers is in sharp decline. In the USA, for example, there was a shortage of nearly 300,000 driversin 2017. One reason for the increasing shortfall is demographics: These days, the average age of American truckers is 55. Other factors include the long working hours and relatively low wages associated with the job. While these shortages have been partially offset by an influx of workers from low-wage countries, the problem is certain to increase as the majority of today’s truckers retire in the coming 10 to 20 years.

In light of these developments, transporting ever-rising volumes of parcels from A to B quickly and efficiently will pose ever greater challenges going forward. This is where autonomous vehicles (AVs) come in – offering a cost-effective solution that can smoothly transport vast numbers of parcels to their destinations with next to no human intervention.

No Fear of Redundancy The very mention of automation makes many people, not unreasonably, wary of the potential threat to their jobs. But in an already critically understaffed segment like trucking, that threat is likely to be negligible. The key issue with automation in this logistics segment isn’t so much the livelihoods of human workers as the relatively immaturity of the technology.

Despite their obvious attractions for logistics players, AVs are still not sufficiently robust for widespread deployment. But that’s set to change as new, longer-range vehicle communication technologies, such as 5G, come online. What’s more advances in sensor tech, bandwidth and processing software will make for higher levels of automation – and, most importantly, safety.

Is It Safe? For many, the safety of autonomous vehicles is a major concern, particularly in view of widely reported accidents involving driverless technology. However, AVs such as autonomous forklifts and inventory robots have been safely deployed in factories for a number of years now.

Of course, driving on the open road is very different from navigating a comparatively small and carefully controlled plant environment, but these solutions point the way forward. It’s worth remembering that more than 90% of road traffic accidents are caused by drivers. By removing the driver from the equation, AVs could considerably reduce this figure. In fact, management consultants McKinsey see autonomous driving technology as having the potential to reduce such accidents by up to 90%.

Business Benefits of AV Tech for Logistics Players As well as increasing safety on the road, AVs could also help shipping, trucking, and logistics companies reduce their operating costsand boost efficiency. A survey conducted by PwC and the Manufacturing Institute predicts that manufacturers could save almost 30% of their total transportation costs if autonomous long-distance trucks become a reality.

Small wonder, then, that a number of big-name automotive players are already active in this space:

  • Last year, Volvo Trucks signed an agreement to provide Norwegian mining company Brønnøy Kalk AS with an autonomous solution for transporting limestone from a mine to a port five kilometers away. Volvo provides the transportation as a service, with no need for the customer to purchase autonomous trucks.

  • Also in 2018, traditional rivals Volkswagen Truck and Bus and Toyota’s truck-making affiliate Hino Motorsannounced they were joining forces to develop autonomous driving technologies.

  • Comparative newcomer Teslaand automotive giant Mercedes-Benzhave each developed autonomous trucking solutions geared to the logistics challenges of tomorrow.

The Future of Logistics Is Just Around the Corner While AVs are still not quite ready for large-scale deployment on public highways, the autonomous trucks from Tesla and Daimler strongly suggest that the future of logistics may not quite as far away as we might think: Daimler has stated that it is planning to put a range of different automated commercial vehicles on the market within the next decade.

What’s Next? Of course, AVs won’t replace human drivers overnight. The shift to integrating these vehicles into logistics processes will be gradual and is likely to take some five to 10 years. Plus, every business will take its own approach to adopting driverless trucks, with some players being quick to embrace the technology and others being more cautious.

No matter what your preferred approach to the tech, it’s imperative to start weighing up the pros and cons now and to decide whether making the change is right for you. Once AV technology has achieved sufficient maturity, and the logistics industry feels comfortable with it, the business possibilities will be virtually endless.

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