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The rise of the transportation internet: Future of Transportation P4

David Tal, Publisher, Futurist
@DavidTalWrites
LinkedIn

Mon, 09/14/2020 - 08:37

By law, the duty of every corporation is to make as much money as possible for its shareholders, even if to the detriment of its employees.

That’s why, while self-driving vehicle technology may see a slow adoption among the public—due to its high starting price tag and to cultural fears against it—when it comes to big business, this tech is primed to explode.

Corporate greed spurs growth of driverless tech

As hinted in the last installment of our Future of Transportation series, vehicles of all forms will soon see their need for drivers, captains, and pilots fall by the wayside. But the speed of this transition won’t be uniform across the board. For most forms of transportation (ships and planes especially), the public will continue to demand a human behind the wheel, even if their presence becomes more ornamental than necessary.

But when it comes to the world’s biggest industries, profits are won and lost on the margins. Finding ways to cut costs to improve profits or undercut competitors is a constant focus of every multinational company. And what’s one of the top operating costs any company manages? Human labor.

For the past three decades, this drive to reduce the costs of wages, of benefits, of unions, has led to the massive rise of outsourcing jobs overseas. Country to country to country, every opportunity to find cheaper labor has been sought and seized. And while this drive has contributed to pushing a billion people worldwide out of poverty, it may also lead to pushing that same billion back into poverty. The reason? Robots taking human jobs—a growing trend that includes self-driving tech.

Meanwhile, another top operating cost companies manage is their logistics: moving things from point A to B. Whether it's a butcher shipping fresh meat from the farm, a retailer shipping products across the country to its big-box aisles, or a steel manufacturing plant importing raw materials from mines across the world for its smelting vats, businesses large and small need to move goods to survive. That’s why the private sector invests billions every year into almost every innovation that comes outs to improve the flow of goods, even by only a few percentage points.

Considering these two points, it shouldn’t be difficult to see why big business has big plans for autonomous vehicles (AVs): it has the potential to cut both its labor and its logistics costs in one fell swoop. All other benefits are secondary.

Big machines get a driverless makeover

Outside of the average experience of most members of society lies a vast network of monster machines that connect the world’s economies and ensures our local superstores and supermarkets are constantly stocked with fresh products for us to buy. These engines of world trade come in a variety of shapes and sizes and by the late 2020s, all will be touched by the revolutions you’ve read about thus far.

Cargo ships. They carry 90 percent of world trade and are a part of a $375 billion dollar shipping industry. When it comes to moving mountains of goods between continents, nothing beats cargo/container ships. With such a dominant position in a massive industry, it shouldn’t come as a surprise that companies (like Rolls-Royce Holdings Plc) are exploring innovative ways to cut costs and seize an ever-larger piece of the global shipping pie.

And it makes perfect sense on paper: The crew of an average cargo ship costs about $3,300 a day, representing roughly 44 percent of its operating expenses, and are the lead cause of maritime accidents. By replacing that crew with an automated drone ship, ship owners could see a wealth of benefits open up. According to Rolls-Royce vice-president Oskar Levander, these benefits could include:

Replacing the bridge and crew quarters with additional, profit-generating cargo space
Reducing ship weight by 5 percent and fuel use by 15 percent
Reducing insurance premiums due to a reduced risk of pirate attacks (e.g. drone ships have no one to hold hostage);
The ability to control multiple cargo ships remotely from a central command center (similar to military drones)

Trains and planes. We’ve already covered trains and planes to a fair degree in the third part of our Future of Transportation series, so we won’t spend a lot of time discussing it here. The main points in the context of this discussion are that the shipping industry will continue to invest heavily in freight trains and planes by having them run more efficiently on less fuel, expanding the number of locations they reach (especially rail), and increasing their use of driverless tech (especially air freight).

Freight trucks. On land, freight trucks are the second most heavily used means of moving freight, only a hair behind rail. But since they service more stops and reach more destinations than rail, their versatility is also what makes them such an attractive mode of shipping.

Yet, even with their essential position within the shipping industry, freight trucking has some serious issues. In 2012, US freight truck drivers were involved with, and largely at fault for, over 330,000 crashes that killed nearly 4,000 people. With statistics like these, it’s no wonder that the most visible form of shipping terrifies highway motorists the world over. These morbid statistics are prompting a range of new, strict safety regulations on drivers, including provisions such as enforced drug and alcohol tests as part of the hiring process, speed limiters hardwired into truck engines, and even electronic monitoring of driving time so drivers don’t operate the truck longer than the regulated time.

While these measures will definitely make our highways safer, they will also make getting a commercial driver’s license much harder. Add a predicted US driver shortage of 240,000 drivers by 2020 to the mix and we’re driving ourselves into a future shipping capacity crisis, according to the American Transportation Research Institute. Similar labor shortfalls are also expected in most industrialized countries with large consumer populations.

Because of this labor crunch, coupled with a forecasted increase in freight trucking demand, a variety of companies are experimenting with driverless trucking—even getting clearance for road tests in US states like Nevada. In fact, freight trucks’ big brother, those 400-tonne, Tonka truck giants of the mining industry, are already being equipped with driverless tech and are already in operation on the roads of the northern Alberta (Canada) oilsands—much to the chagrin of their $200,000 per year operators.

Rise of the Transportation Internet

So what exactly will the automation of these disparate shipping vehicles lead to? What’s the end game for all of these big industries? Simply put: A transportation internet (a ‘transportation cloud’ if you want to be jargon hip).

This concept builds off the ownerless, transportation-on-demand world described in part one of this series, where individuals in the future will no longer need to own a car. Instead, they’ll just micro-rent a driverless car or taxi to drive them on their daily commute. Soon, small-to-medium sized companies will enjoy that same convenience. They will place a shipping order online to a delivery service, schedule a driverless truck to park itself in their loading bay at a quarter past three, fill it up with their product, and then watch as the truck drives itself to its pre-authorized delivery destination.

For larger multinational organizations, this Uber-style delivery network will span across continents and across vehicle types—from cargo ships, to rail, to truck, to the final drop-off warehouse. While it’s valid to say that on some level this already exists, the integration of driverless tech substantially changes the equation of the world’s logistics system.

In a driverless world, corporations will never again be constrained by labor shortages. They will build out fleets of trucks and planes to meet operating demands. In a driverless world, businesses can expect faster delivery times through continuous vehicle operation—e.g. trucks stopping only to refuel or reload/unload cargo. In a driverless world, businesses will enjoy better shipment tracking and dynamic, to-the-minute delivery forecasts. And in a driverless world, the deadly and financial costs of human error will be noticeably diminished, if not permanently removed.

Finally, since shipping trucks are largely corporate owned, their adoption won’t be slowed by the same pressures consumer-oriented AVs might experience. Added costs, fear of use, limited knowledge or experience, emotional attachment to traditional vehicles—these factors just won’t be shared by profit-hungry corporations. For that reason, we may see driverless trucks become the norm on highways far earlier than we see driverless cars cruising around urban streets.

The social costs of a driverless world

If you’ve read this far, then you’ve probably noticed how we’ve mostly avoided the topic of job losses due to driverless tech. While this innovation will have a great many upsides, the potential economic impact of millions of drivers put out of work may be devastating (and potentially dangerous). In the final installment of our Future of Transportation series, we look at the timelines, benefits, and social impacts these new technologies will have on our shared future.