Considering the pace of investments, consolidation of efforts through acquisitions and deep partnerships, the dream of the autonomous vehicle might be closer than we think.
While the global pandemic gripped the world, confidence in the future of the autonomous vehicle continued to grow stronger. In 2020 alone, several high-profile partnerships between original equipment manufactures (OEMs) and platform startups were announced, and the number of real-world pilots increased—bolstering the case that these autonomous vehicles will be sharing our roads and highways sooner than we think.
According to Gartner, the number of autonomous vehicles on our roads, being tested in real world settings, will grow from around 1,400 units in 2019 to upwards of 700,000 fully autonomous vehicles by 2023—with the majority focused on passenger vehicles for consumers and the rest for commercial applications. That growth, according to Allied Market Research, will achieve a market value of more than $550 billion by 2026.
Platforms, infrastructure and updated regulatory guidance are the biggest road hazards in the way—keeping us from realizing the promise of autonomous commercial vehicles sooner rather than later.
New rules and regulations need to be developed, and in parallel, major infrastructure upgrades to support and power the network will need to be planned out. This requires a serious public-private partnership to ensure the rules of the road are not what keep us from reaping the benefits of this technology.
Investors who are staking their hopes into the various technologies being developed are not the only ones who stand to reap the value of autonomous vehicles. We know that shifting to a truly intelligent supply chain that’s focused on the customer at its core will become a growth engine—moving the supply chain from being cost focused to driving new value propositions.
And while many companies are recognizing the importance of having a customer-centric supply chain, research from Accenture indicates that only 10% have them in place today. Further, the additional value that autonomous vehicles will bring to the mix can’t be understated—and will result in a truly intelligent supply chain. Supply chain leaders should be paying close attention and begin to strategize on how to reimagine their business with this game-changing capability in place.
One of the most significant considerations for companies, however, is how to re-envision their operating models for a world of autonomous fleets. Strategy execution is driven by successful alignment of business and operating models, but, according to our research, only 22% of executives say theirs are aligned to growth initiatives. And the business environment grows increasingly complex. Eighty-one percent of executives expect to manage multiple operating models in parallel in the future. Incumbents will increasingly need to become more like disruptors in their approaches.
Opportunities to improve the trucking industry through autonomous vehicles are significant. Value will come from reduced operational and administrative costs as well as the value from the growth that these technologies will bring as a new industrial revolution is realized with the application of this technology.
Reduced CO2, improved safety, reduced overall road congestion, increased speed of deliveries, and the gift of time are all intrinsic values that will come with the rollout of autonomous vehicles.
The following are just some of the ways autonomous trucking will enable companies to reinvent their operating models.
Addressing the people shortage. Automation in this case isn’t about replacing people, but augmenting fleet capacity because of the severe shortage of long-haul drivers. For the near term, semi-automated vehicles will be paired with drivers.
Improving overall safety on the road. According to NHTSA, more than 94% of serious crashes on our roads are due to human errors. Self-driving vehicles have the potential to drastically reduce these types of crashers, ushering in a new era of safe driving.
A non-stop supply chain. This is an important goal of autonomous assets in the commercial trucking space: operating 24x7, moving goods and services effectively and efficiently at paces never dreamt of before, thereby radically transforming the way all industries serve customers.
From asset coordinators to asset orchestrators. Daily operations in the trucking industry will materially change—shifting from an asset and driver coordinator to an asset orchestrator. Transportation activities will become centralized around control towers, much like how aircraft movements are monitored today with managers “orchestrating” the massive number of assets moving in the same, shared spaces safely and securely.
Where the robots meet the road: Planning for the future
How can companies take action in a market where the technologies are exciting, yet still being proven with some fairly large challenges?
Here are several things to consider immediately.
The future of driverless commercial vehicles is becoming clearer by the day. Autonomous fleets will help to reduce overall supply chain risk, decrease carbon emissions, increase service levels and improve public safety. Assets will no longer be constrained based on availability of human operators and regulatory restrictions on hours that people can work.
Coupled with fully automated warehousing, companies will be able to move goods and services at speeds never seen before—with higher reliability and at lower long-term cost. Across industries, companies should be positioning themselves as leaders in mastering this new application of technology and creating new value for themselves, customers and shareholders.
Those who wait will have to follow, whereas those who act now will be in the driver’s seat—with vehicles that don’t have drivers.