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The Inventory Mentor

Jul 5, 2019


How will driverless trucks affect supply chains?

Driverless trucks and supply chains

The trucking industry estimates that it needs to hire nearly 900,000 new truck drivers over the next decade to meet the ever-increasing need to deliver goods. The trucking industry is the largest industry in the USA, delivering on average 150 pounds per American per day equating to over 800 million USD revenue per annum. The job of getting goods from point A to point B with fewer costs and less downtime is the name of the game for this industry. Driverless trucks or semi-autonomous trucks are set to revolutionize the trucking industry. Besides the cost savings on fuel, it is estimated that you will be able to travel 2.5 times as far per day – think how that equates to savings on your bottom line AND improved customer service. You will be able to provide customers with delivery time accuracy close to 100%.

The main aim of driverless truck technology is not to eliminate the human truck driver necessarily, but rather to find ways to merge them with AI to get more miles at lower costs. Currently, it is not possible for automated trucks to do everything that a human driver can do as defined in level 5 automation. Therefore, it is essential for companies to examine this in detail to see how they can use autonomous technology to reduce costs through greater fuel efficiency, improve safety, save lives and reduce the workload for human operators.

Amazon is one such company that is leading in this field and has embarked on self-driving trucks to carry their cargo. The human driver is responsible for getting the load to the highway, and then AI takes over to do the long-haul – the tiresome part of the journey which is usually where most fatalities occur due to driver fatigue.

One primary concern after Tesla’s self-driving car was involved in its first fatal accident in 2016 is the safety element of this technology. While on autopilot, the vehicle crashed into a trailer as the camera was unable to distinguish the white vehicle against the bright sky and failed to apply brakes. It’s important to note that this was Tesla’s first fatality in its 130 million miles using the autopilot feature. It’s easy to look at the data of human controlled trucks as this data exists over many years, but driverless truck data is virtually non-existent. Data for human controlled vehicles reflects that, in the US alone, 4,000 people die in truck-related accidents every year – of which 90% are due to human error.  It will take time to build up data insights for autonomous vehicles, but since these trucks drive primarily on highways, which are clear from pedestrians and sharp turns, there is limited risk.

If you are in supply chain, the benefits you can expect from adopting this technology include:

Increased efficiency

Your trucks can now roll 24 hours a day as opposed to the 11-hour shift limit. 

Fuel cost savings

Fuel costs will reduce as you will program the truck to drive at speeds that optimize fuel efficiency.

Reduction in labor costs

While new jobs will be created to manage driverless fleets and operations, the push towards automation ultimately means less labor will be required overall and that means lower labor costs.

Saving lives

Reduction in truck accidents caused by human error.

Inventory optimization

Your lead times from your suppliers will be close to perfect, enabling you to reduce the amount of buffer stock needed thereby reducing your investment in working capital for the same or even higher customer service levels.

In conclusion, driverless trucks or automated vehicles cannot get tired, drunk, or distracted, and they will arrive on time with unprecedented consistency. This technology may well be your future friend and worth including in your digital transformation strategy.