The Cautious, Yet Deliberate, Approach to Making Self-Driving Vehicles a Reality
Autonomous driving technology was the talk of town way back in 2010. How much longer until it's commercialized?
A hearty welcome to the 75th edition of The Logistics Rundown, a weekly digest that aims to put some perspective on what’s brewing within the logistics industry. This is a space where we religiously dissect market trends, chat with industry thought leaders, highlight supply chain innovation, celebrate startups, and share news nuggets.
For anyone invested in the fortunes of the autonomous driving segment, the last decade would have been a definite rollercoaster. While the technology itself has been in the making over decades (considering the different autonomy levels to it), the idea of fully-autonomous vehicles taking to the roads was fairly recent. If we were to pinpoint it on the self-driving timeline, it would probably be Google's announcement in '10 of successfully navigating over 1,000 miles of public roads on a self-driving car via its Waymo unit.
Fair to say, this created a storm. And understandably so. Self-driving technology wasn't just 'another' transportation innovation — it was something artists and writers envisioned and prophesied for ages. To be chauffeured around without ever taking the wheel is as revolutionary as the transition from horse-drawn carriages to gasoline-powered automobiles in the early 1900s.
To be chauffeured around without ever taking the wheel is as revolutionary as the transition from horse-drawn carriages to gasoline-powered automobiles in the early 1900s.
Lessons could be learned by observing how societies in the early 1900s adapted to automobiles after using horse-drawn carriages for centuries. While the technology powering self-driving vehicles is light years more complicated than the technology that brought us our first automobiles, the transitioning process could be eerily similar. For one, even when automobiles were much more sophisticated than horse-drawn carriages, the transition took several decades. All those decades, not because the technology wasn't there, but because of social, cultural, and economic factors that slowed adoption.
More than a century later, the conditions haven’t changed much. In a future where Level 5 automation is perfected, the transition to self-driving will still encounter challenges similar to those faced by the earliest automobiles.
That said, we are still some distance away from having commercial self-driving vehicles taking the road. Over the years, companies have been wildly off the mark with their forecasts, jumping the gun — not just with the roadmap of when Level 5 would be perfected, but also on the scale and speed of commercialization.
Elon Musk predicted in '15 that there'd be fully autonomous Teslas on the road by '18. Uber's founder Travis Kalanick said in '16 that Uber planned to run robo-taxis by '20 (Uber has closed its self-driving unit since then). Ford planned to have its autonomous vehicles on the road by '21. While such statements can sound mildly funny in retrospect, they show how complicated autonomous driving tech development can actually get.
While such statements can sound mildly funny in retrospect, they show how complicated autonomous driving tech development can actually get.
Regardless, there's no doubting the significant progress the technology has seen over the years. This has all come at a steep cost, as companies burnt through tens of millions of dollars in development and testing. To date, shoring up finances to run operations is one of the major challenges facing autonomous driving companies.
The current venture capital environment is not conducive either. VC money is drying up, especially for late-stage startups. Capital is now directed toward up-and-coming verticals, as investors scrutinize harder where their money ends up (we did an entire story on this a month ago).
A recent casualty of the capital crunch has been autonomous driving company Embark, a once-promising startup now staring at liquidation if it can't find a buyer in time. Embark went public in 2021 via the SPAC route, fearing the constant hardship in raising capital. But as is often the story with SPAC mergers, the company’s shares tanked in the public market, slashing the capital Embark had to continue its development.
Then again, the blunder wasn't so much about Embark going the SPAC route than its failure to team up with an OEM partner. While it did work with Knight-Swift, the company is not an OEM — thus depriving Embark of an opportunity to see its solution go to scale.
Torc Robotics is one of the companies that has smartly navigated these rather choppy waters. Born out of a DARPA-sponsored self-driving challenge by a bunch of Virginia Tech students in 2005, Torc grew over the years by deploying its technology in tough environments like mines and risky construction terrain.
“Fast-forward to 2016-17, Torc decided that with the advancements in sensor and compute technology, and the algorithms to oversee self-driving, it’s possible to envision a larger-scale commercial product,” said Nick Elder, the director of strategy at Torc Robotics. “The amount of computing power that can be incorporated into a vehicle came at a justifiable cost for us to offer a cost-effective self-driving solution.”
The business case is encouraging for automating long-haul trucking, contended Elder. “The age demographic of long haul drivers is in their late 40s; not many people take this as a career today. Also, a Class 8 truck is a relatively expensive asset that isn’t utilized as heavily as desired due to hours of service limits and other logistical constraints. These factors make it an attractive opportunity,” he said.
The business case is encouraging for automating long-haul trucking.
Torc partnered with Daimler in ’19 to develop and test autonomous trucks on public roads in Virginia, with Torc’s self-driving software on Daimler’s Freightliner Cascadia trucks. By ’20, Daimler Trucks had acquired a majority stake in Torc, helping the company run stable operations without the constant headache of pursuing investment.
Elder pointed out that even within the long-haul space, the precise segment of focus for Torc was the mid-mile, considering it predominantly dealt with interstate and highway driving — where conditions are more standardized, narrowing the scope of the self-driving problem. “It’s still a complicated problem as we can’t overlook the dangers that come with higher speeds. But, that being said, highway driving has more standardized lane widths, lane geometries, and road geometries. The rules of the road are structured and straightforward, unlike in urban driving settings.”
Recently, Torc established an advisory council that includes major truckload and LTL carriers, and TMS providers to pool insights for product development. For the commercialization and adoption of self-driving technology, it’s essential to have both OEMs and trucking carriers on board.
For the commercialization and adoption of self-driving technology, it’s essential to have both OEMs and trucking carriers on board.
“Our discussions with carriers showed their priorities were about creating a safe solution that reduces crashes and fatalities. While they cared about their bottom line, ensuring safety remained at the foundation of their business. This aligns well with our core vision as a company, and we’ve found many synergies with potential customers who we hope will be early adopters of our self-driving trucks,” said Elder. With technology showing promise and a clear case of commercial viability, the future looks promising for Torc.
The final hurdle to the widespread commercialization of autonomous driving technology might be legislation. City and state administrators would need to deliberate on the safety standards of fully-autonomous vehicles, social acceptance, and their impact on the job market.
“Our former CEO, Michael Fleming, used to emphasize that autonomy is a marathon and not a sprint. This sentiment still holds true,” said Elder. “I don’t believe self-driving technology will replace every human driver, not even close. But looking ten years ahead, I strongly believe self-driving technology will have a significant impact, particularly in the mid-mile long-haul trucking segment. It will alleviate the challenge long-haul will have with driver shortage and help provide existing drivers a better quality of life.”
The Weekly Roundup
Knight-Swift is about to get a serious bump in the size and scale of their business. The trucking giant has recently received full approval to acquire U.S. Xpress at a sale price of $800 million. U.S. Xpress currently fields approximately 25,000 tractors and 93,000 trailers with 30 drop yards throughout the US.
Hopes for a recovery in freight demand are beginning to dwindle. Many in the logistics industry expected ‘23 to be a comeback year as the world finally shakes off the last of the pandemic. Unfortunately, many retailers are still sitting on excess inventory and hesitant to place large orders due to faltering consumer demand.
The European Union is signing new laws to crack down on cyberattacks on logistics and transportation companies. The laws are designed to protect against cyber attacks on critical infrastructure, such as ports and airports, which could cause widespread disruption. Under the new laws, transportation companies will be required to assemble a computer incident response team with “adequate resources and technical capabilities”. Additionally, all cybersecurity incidents are required to be reported.
A dispute over lunch breaks has rekindled fears of delays and disruption at US West Coast ports. With contract negotiations still ongoing, a dispute between a union worker and an employer almost resulted in disaster. The International Longshore and Warehouse Union (ILWU) Local 13 has accused terminal operators of failing to provide adequate lunch breaks and is demanding an investigation into the matter.
…said who?
“We’ve seen all of the big retailers that do e-commerce talk about slowing demand and pulling back on really the massive investments they’ve made in terms of warehousing and distribution capacity. That’s really a big part of what’s driving the courier, messenger and warehousing decline.”
- Aaron Terrazas, chief economist at Glassdoor, while commenting on the slowdown in e-commerce retail in the first quarter of ‘23.
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