Autonomous Trucks Are Coming But Face A Bumpy Road8 min read
The days of friendly truck drivers blowing their air horns for kids along the highway are numbered. Someday soon, that 18-wheeler you pass might have no one behind the wheel. So buckle up for the coming age of autonomous trucks, because it’s a good bet trucking companies will get them rolling long before driverless passenger cars.
Amid a severe shortage of drivers, trucking companies are looking to self-driving rigs to fill the gap. Proponents say the technology is there to create autonomous truck fleets within a few years. Meanwhile, development of driverless cars continues to struggle.
Two dozen states already allow commercial deployment of intrastate autonomous trucks, and they’re now on the road in some spots. Further, most states allow testing of self-driving trucks that have human backup on board. For interstate travel, however, autonomous trucks still need clearance from the federal government.
“This is the present, not the future. It’s happening now,” said Richard Steiner, head of policy and communications for self-driving truck firm Gatik. “Over the next few years, you’re definitely going to see autonomous trucks become increasingly commonplace across multiple markets.”
Rest assured, speed bumps may lie ahead. Trepidation remains over the safety of unmanned vehicles — especially those weighing 20 times that of the average passenger car. Cautious trucking companies and regulators have been tapping the brakes, making sure the technology is ready.
At the core of those concerns are high-profile accidents such as those involving Tesla‘s (TSLA) Autopilot feature in its electric cars. But Tesla Autopilots are not full self-driving cars. Instead they are advanced driver-assistance systems where the human driver is responsible. Also, Tesla cars lack the robust sensor systems, such as lidar, used by autonomous trucks.
Simply put, development of self-driving truck technology is leaving driverless cars in the dust.
What Trucks Have Autonomous Driving?
A convoy of tech companies hoping to cash in on autonomous trucks went public during the SPAC boom of 2020-21. But their shares have underperformed as the companies remain in development mode. Analysts have criticized special purchase acquisition companies for taking startups public too early in their development.
Those firms include makers of self-driving truck technology such as Aurora Innovation (AUR), Embark Technology (EMBK) and TuSimple (TSP). They compete with privately held firms like Gatik, Plus and Torc Robotics.
Another privately held firm is Mountain View, Calif.-based Kodiak Robotics. It touts that it is “building the world’s safest driver” with its autonomous long-haul trucks. Its driving system uses short- and long-range lidar, cameras and radar sensors that combine for a vision range of 1,000 meters.
But Wall Street has yet to be convinced about which companies or business approaches have staying power.
“The markets are skeptical of pre-revenue companies,” Jefferies analyst Stephen Volkmann said.
Other tech firms play in this space, though. Companies looking to profit from the trend include makers of computer vision systems needed for autonomous trucks to see the road, traffic signals, other vehicles and obstructions.
Companies in that camp include camera vision firm Mobileye (MBLY), along with lidar sensor makers Aeva Technologies (AEVA), Innoviz Technologies (INVZ), Luminar Technologies (LAZR) and Ouster (OUST), to name a few.
Also, graphics-processor maker Nvidia (NVDA) is in the game as a key partner for numerous autonomous trucking firms with its Drive computing system. It also makes technology geared for driverless cars.
Are There Fully Autonomous Trucks On The Road?
Meanwhile, Mountain View, Calif.-based Gatik has already commercialized self-driving trucks. Unlike firms focused on long-haul trucking, Gatik specializes in shorter routes, including metropolitan areas.
“We live in the middle mile — the movement of goods between micro-fulfillment centers, smaller distribution centers and drop-off locations such as retail storefronts and other convenient local pickup points where consumers can access their goods,” Gatik’s Steiner said. “Many of our routes at the moment are in the 50- to 75-mile range.”
Gatik now operates fully driverless trucks for Walmart (WMT) in Arkansas and Canadian food and pharmacy retailer Loblaw in Ontario.
The company operates about 45 light- and medium-duty box trucks for customers in North America. It expects to have more than 100 by the end of this year, Steiner says. Some of those trucks feature human safety drivers on board and companies plan to transition to fully autonomous driving as they perfect the routes.
By removing the human driver, trucking companies can save 30% on their trucking costs, Steiner says. Estimates on cost savings vary among others in the industry.
“The economics are significant to say the least,” he said.
For Walmart, the transition to begin using fully driverless trucks took 24 months. Loblaw came next and it took 19 months to make the switch.
“The time to fully driverless is shrinking,” Steiner said.
Will Autonomous Trucks Replace Drivers?
It’s too early to predict winners in the tech space around autonomous trucks, Jeffries’ analyst Volkmann says. Widespread adoption of the technology is three to five years away, he says.
Yet operators of large fleets will be huge beneficiaries of autonomous truck technology, Volkmann adds. The reason is that the economics behind self-driving tractor trailers are so compelling.
Since driver wages and benefits account for about 45% of costs, autonomous trucks can slash operating expenses, Volkmann said. Trucking companies will cut at least 20% of their variable costs when all factors are considered, Volkmann believes.
Also, autonomous trucks don’t need to take breaks for meals, rest stops and sleep, shortening delivery times. Federal law limits trucker drive time to 11 hours before taking a 10-hour break. Autonomous trucks aren’t subject to the same limitations and can operate 24/7. They only need to stop to refuel and get their sensors wiped clean.
One-day mileage for long-haul trucks can increase about 125% using autonomous technology, Volkmann says. As a result, trucking firms likely will take market share from rail and air freight, he predicts.
“This will be a game-changer in logistics,” Volkmann said.
Driver Shortage Fuels Need For Autonomous Trucks
Truck fleet operators pursuing autonomous driving technology include Knight-Swift Transportation (KNX), J.B. Hunt Transport Services (JBHT), and Schneider National (SNDR).
Delivery services such as DHL, FedEx (FDX) and UPS (UPS) also are working with autonomous trucking firms.
One hurdle for autonomous trucks is likely to come from labor unions concerned about job losses to technology. In California, the Teamsters union is pushing for a law that would require human truck drivers in the cab of self-driving vehicles as a safety measure.
But supporters of autonomous trucks say robots could be better truck drivers than humans. Data from the National Highway Traffic Safety Administration shows that 94% of all motor vehicle accidents involve driver-related factors like impaired driving, distraction or illegal maneuvers.
Also fueling demand is the fact that truck fleet operators are having a hard time hiring truck drivers. This year, experts estimate the shortage of U.S. truck drivers at 105,000. The American Trucking Associations trade group predicts the shortage will grow to 160,000 by 2030.
Commercial “driver-out” operations for autonomous trucks are likely to start on select highway routes beginning in 2024, Volkmann says.
“It’s not about eliminating jobs per se, because frankly the long haul from one highway exit to another is a long, boring job and it’s hard to recruit people to do that,” Volkmann said.
Self-Driving Trucks Need Regulatory Approval
Autonomous trucks are likely to happen before driverless cars because of the reduced complexity of highway driving, Volkmann says.
Backers also say autonomous trucks will be safer and more fuel efficient than those with human drivers. Plus, once companies prove the safety aspect, insurance rates should come down, industry officials say.
Many self-driving trucking companies will offer their technology as a service on a per-mile cost basis. Others will sell their technology through truck builders.
Before autonomous trucks can take over the highways, however, they’ll need to get full regulatory approval. The U.S. Department of Transportation set the framework for the regulatory environment for driverless cars and trucks with its AV 4.0 plan in 2019.
Autonomous Trucks In Snowstorms?
Final technical hurdles for the rollout of autonomous trucks include proving that robot truck drivers can operate in all weather conditions, day and night.
Lidar, short for light detection and ranging, is a key component for this hurdle. With laser-based lidar systems, autonomous vehicles can see in the dark and blinding sunlight and through fog, rain and snow, proponents say. Radar systems are another possible solution for seeing in bad weather conditions.
“On a nice sunny day in Arizona, these things work fine all day long,” Volkmann said. “But what happens when it’s rainy and foggy, or there’s a snowstorm, or there’s an accident or construction that wasn’t expected?”
That’s why long-haul autonomous big rigs are likely to hit the road first in the southern United States, he says.
“Most of these companies are talking about doing it on long, repeatable routes — call it L.A. to Las Vegas,” Volkmann said.
Another aspect of autonomous trucking that needs to be worked out is fueling. Truck stops and other gas stations will need to service robot trucks on long routes.
Some Firms Taking Evolutionary Approach
Meanwhile, some autonomous trucking companies are looking to commercialize their technology on an incremental basis.
Cupertino, Calif.-based Plus prefers to enter the market first with systems that help human truck drivers. It has its eye on full autonomy down the road, but its first product acts as a highly intelligent driving assistant. It allows drivers to engage the system to automatically drive on the highway, keep the vehicle centered in its lane and handle merging traffic.
With the Plus driving assistant technology, human truck drivers are more like airline pilots, Plus Chief Executive David Liu says.
“While other companies are focused on showcasing potentials, we’re focused on commercial products for the market today,” Liu said “That’s a key differentiation. We take an evolutionary approach.”
He added, “It’s a progression and over time we’ll produce full autonomy. Most of the other companies are focused on going directly to full autonomy.”
Liu sees a shakeout for autonomous trucking companies.
“The industry is going through a shakeout,” he said. “If companies didn’t focus on the right thing, people will question their viability.”
Plus has hundreds of systems operating in trucks today in the U.S. and China, Liu says.
“We’re just getting started,” he said.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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