In last week’s blog, I outlined the market forces driving the launch of autonomous trucks; this blog will focus on the emerging technologies and companies that are shaping this big change in trucking. They include:

• Retrofit Kits for Existing Fleets

• Autonomous Trucks

• Automated Last Mile Delivery Services

There are approximately 3.5 million professional truck drivers in the United States, according to the American Trucking Association; there are an estimated 250,000 professional truck drivers in Canada (source: Toronto Globe & Mail). This places the position of truck driver among the most common professions, at least for men, in North America. The cost of these drivers represents one of the largest expense items for most trucking firms.

There are a host of initiatives taking place in North America and Europe to partially or fully replace truck drivers with a set of technologies that have come to be known as autonomous vehicles. In addition to cost, this new set of technologies offers a range of benefits.

“Automated vehicles have the potential to save thousands of lives, driving the single biggest leap in road safety that our country has ever taken,” stated former U.S. Transportation Secretary Anthony Foxx. Approximately 35,000 people died in roadway collisions in 2015 and 94 percent of the crashes “can be tied to a human choice or error,” according to the Department of Transportation.

The projected shortage of truck drivers, that is expected to reach hundreds of thousands of positions in 2025, provides further incentives to get robots in the driver’s seat. There’s a huge advantage in getting automated drivers, who can work 24 hours a day, involved in those deliveries, and improving logistics for companies.

Over the past couple of weeks, I have had the privilege of sitting in on a discussion and reading some papers on the Future of Freight Transportation. I specifically would like to acknowledge the work of Steve Sashihara at Princeton Consultants and a recent Supply Chain Digest report that helped shape my ideas for this blog. While I previously had some sense of what was going on (i.e. ecommerce, Amazon) in this sector, I was surprised by the range and profound nature of the changes that are taking place. I would like to share some of the major changes with you.

Manufacturing in the Future

The big drivers of change are automation, digital technology, and robotics. Manufacturing is increasingly being performed by robots; automated systems are sorting the products and then loading them on trucks. Sensors are becoming ubiquitous and are now on products, pallets, SKUs, drivers, facilities, tractors and trailers. Conveyor systems move the right product to the right piece of trucking equipment at the right time. Loading software tells you how and where to load the product on the truck or trailer to maximize cube utilization and avoid load imbalances.

With the advent of 3D printing and artificial intelligence, companies can manufacture their products in the locations closest to their customers and/or distribution facilities. What this tells you is that the jobs of assemblers, sorters, fork lift drivers and loaders will increasingly be replaced by machines. While some manufacturing may come back to the United States or Canada, many of the traditional jobs will not.

The previous blog looked at the potential Trump Effect (http://www.dantranscon.com/index.php/blog?view=entry&id=258 ) on Freight Transportation in 2017. This blog will focus on some of the other variables that are likely to shape the freight world in the coming year.

Upswing in Economic Growth

While 2016 was a soft year economically and in terms of freight and freight rate pricing, shippers, carriers, and economists are somewhat more optimistic about the New Year. Interest rates are likely to remain low (although there will likely be some increases in 2017). Household balance sheets are expected to remain in good shape. Employment levels in the U.S. are projected to remain strong. Investment in energy development is likely to increase. Inventory levels are predicted to decrease, driving an increase in manufacturing. Donald Trump has committed to increase the number of jobs in the United States in the coming year. The improving U.S. economy will likely help boost the Canadian economy as well.

Increase in Cost of Diesel Fuel