The autonomous truck, only a few years ago a mere myth, is no doubt on-ramping into reality. The highest estimates show that there are as many as 3.5 million truckers in the United States. Most suggest it’s more like 3.1 million. Like a lot of stats, it depends on who’s counting and for what purposes. Nevertheless, about 1.7 million of these drivers are “over the road,” or long-haulers. Of those, only about half (850,000) are “for-hire,” meaning they do not work a private fleet.
In spite of constant outcries of driver shortages and 90% turnover rates, many fear for the short and long term future of an industry that still pays especially well without requiring a college degree. Truck driving is also the primary employer in 29 U.S. states. While it’s clear that truck driving will change—with long-haulers seemingly on the front lines of the technology’s easiest implementation—no one knows what effect automation will really have on the industry, or when, or to what extent, it’s going to happen.
We live in fascinating times, and there are reasons almost too numerous to itemize that we might take issue with regarding the Trumpian presidency. But bringing Trump into every economic and cultural topic gets tiresome. Rolling Stone’s article by Tim Dickinson is a wide-ranging and an overall outstanding synthesis of the past year’s trucking issues. It also pursues a similar prophetic, death-of-the-trucker trend like the recent article from The Guardian, “End of the Road: Will automation put an end to the American Trucker?”
Dickinson writes: “A report by the International Transport Forum projects a scenario in which roughly 1 million heavy-truck drivers lose their jobs by 2025. McKinsey Global Institute offers an even more dramatic possibility: 85 percent automation, or nearly 1.5 million jobs lost, by 2027. At that pace, the Trump administration and Republicans in Congress need to begin backing aggressive policies to support displaced truckers. But in its first year, the Trump administration has sided with the automators: Trump’s short-lived business advisory council was stocked with CEOs pushing the envelope of robotic trucking, including Uber and Tesla. Trump’s tax plan offers big breaks for investment in automation. And Transportation Secretary Elaine Chao has vowed the administration will be ‘a catalyst’ for a driverless future. It is a revealing betrayal, exposing rot at the core of Trump’s promises to ‘make America great again.’ Far from putting the country’s forgotten workers in the driver’s seat, Trump’s administration threatens to make them economic roadkill.”
At best, this is low-hanging fruit. For one, there are actually even more obvious hypocrisies among Trump’s constituencies. What about the LGBTQ representation, and then his immediate Tweet-pivot about clearing them out of the military? Or what about his support among evangelicals in spite of his clearly secular, bullying, never-apologize bravado?
Yes, the tax reform bill, the Republican’s only legislation accomplished in 2017, will likely give a modest boost to average Americans but seems clearly intended to help corporations. And, for that matter, may not even help all that much in the long term, as many of these corporations already had so many tax loopholes that a difference from 35% to 21% isn’t going to mean much in many industries. On the other hand, the tax breaks will also help every single owner-operator that owns an LLC, big or small.
But let’s stick to the point. Shifting economic trends and technological progress hasn’t been something America has been good at preparing for, well, ever. Would we propose that Trump is on the wrong track in investing in these industries? Or just that it’s ironic?
Clearly, it’s good for the whole of the U.S. to adopt and adapt to marketplace differentiators. We want our presidents looking out for the greater good, and not only their voting blocs. So, when he appears to finally trend in such a direction, he’s going to be criticized again?
Consider another quote from the article: “A software engineer working for Daimler tells Rolling Stone that employment for truck drivers in a world of platooning will soon get Darwinian: ‘It’s adapt or die.’”
We don’t know who this engineer is, and while generally speaking this is going to be true of all industries in the 21st century, another Daimler engineer has recently gone on the record with a different slant.
Daimler’s top self-driving engineer Derek Rotz told Financial Times last year that he doesn’t expect fully autonomous trucks — the kind with no driver at all — within his lifetime. “That’s quite frankly something that we are not looking at,” he says. What he does see is an on-boarding progression. Rotz happens to be the engineer who helped develop the first self-driving truck to receive a testing license in the U.S. in 2015. Rotz expects systems like predictive cruise control, the use of maps and elevation data.
This might be one of the biggest issues we need to get clear on. Life in the 21st century is ushering in a time of technical prowess, and a higher level of data professionalization and assimilation. Whether it’s specifically a college education, or otherwise, employed people will have to actually know how to work with technology, and that’s where the jobs will ultimately go.
The Brookings Institution recently debunked the theory that autonomous trucks will lead to job losses, pointing out that positions with a higher degree of automation are more likely to experience job losses due to automation. This includes office clerks, cashiers and receptionists. Only on the surface does trucking fit into this national narrative of losing their jobs to bots.
Dickinson also writes: “But none of these obstacles are likely to keep truckers from becoming the new coal miners. The gut punch of job loss will be heightened by a decline in next-job wages. Truckers ‘currently enjoy a wage premium over others in the labor market with the same level of educational attainment,’ the 2016 White House report says, and are unlikely to ‘regain this wage premium if displaced.’”
This feels more like the canary in the coal mine. As FreightWave’s Brian Straight reported months ago in an interview with economist Steven Banks:
“How rapidly the autonomous truck becomes a common sight on local roads and interstate highways – both in the U.S. and abroad – depends on numerous factors: the speed with which the requisite technology is developed; the rate of autonomous truck technology diffusion; the relative price sensitivity of the particular trucking sector adopting the autonomous truck (i.e., the per cost of adopting the technology for a single owner-operator will be substantially higher than the per truck cost for a major fleet operator, which can spread the cost over a much larger number of units); the regulatory environment which will either encourage or discourage the industry (e.g., safety concerns, emissions standards, etc.); the social and labor ramifications; and the economics (e.g., pricing, costs, return on investment, etc.) associated with autonomous trucks, among many others,” Banks sums up. “However, there is little doubt that the autonomous truck, once portrayed as nothing more than a myth, is rapidly becoming a reality.”
Dickinson says: “A report by Goldman Sachs found that when autonomous vehicles reach peak deployment, 25,000 drivers a month will be out of work. And that flood of unemployed drivers’, says Bennett, the Duke economist, would also ‘push down the wages of other low-wage jobs.’”
Except on the other hand, many others are forecasting a much slower transition—in large part due to the factors enumerated above. And what about the so-called driver shortage in all this discussion? If trucking were such a great gig then why does the ATA’s 2017 report observe a problem of driver turnover in the industry of nearly 90%?
The fact is, driving is solitary, physically inert, and psychologically exhausting. And long-haulers can be on the road, away from family and friends, for months at a time. So people leave.
Only now, in a surprising twist, and what is the actual real news of the day, is that technology is actually helping the truckers. It is virtually guaranteed that drivers will see significantly higher increases in pay in 2018. As recently reported by FreightWaves, Covenant Transport has announced a $40,000 total bonus to team drivers, payable in increments based on miles driven. Team operations contain two drivers, and they enable a truck—ELD mandate notwithstanding—to move nearly around the clock.
The advantages to team driving are numerous and enormous, but with fewer married drivers taking advantage of this approach, as Ed Kern of Covenant tells FreightWaves, “It’s easier said than done to find these drivers. For instance, you can’t pair a smoker with a non-smoker. You have to find drivers who get along with each other really well when they spend so much time together.”
But even if the progression of autonomous trucks is a LOT slower than the media hype currently provides for, what about this whole driver shortage thing?
“Meanwhile, Trump’s budget outline aims to slash the Labor Department by more than 20 percent, including deep cuts to job-training grants that might help drivers laid off for robots.”
In “The Relentless Pace of Automation” Joel Mokyr spoke with David Rotman for MIT Review. Mokyr is a leading economic historian at Northwestern University, who has spent his career studying how people and societies have experienced the radical transitions spurred by advances in technology, such as the Industrial Revolution that began in the late 18th century.
“Mokyr describes himself as ‘less pessimistic’ than others about whether AI will create plenty of jobs and opportunities to make up for the ones that are lost,” writes Rotman. “And even if it does not, the alternative—technological stagnation—is far worse. But that still leaves a troubling quandary: how to help the workers left behind.” “ He adds, “I don’t see an easy way of solving it. It’s an inevitable consequence of technological progress.”
The problem is that the United States has been particularly bad over the last few decades at helping people who’ve lost out during periods of technological change. Their social, educational, and financial problems have been largely ignored, at least by the federal government. According to the Obama Administration’s White House report, during his last months in office, the U.S. spends around 0.1 percent of its GDP on programs designed to help people deal with changes in the workplace—far less than other developed economies. And this funding has declined over the last 30 years, not just in the past year, as bad as it does appear in today’s context.
Maybe instead of dystopian headlines fomenting the beehive, we might consider the relatively good news in the U.S., and more precisely how we will all need to adapt “or die.” In this past November’s McKinsey report, Making it in America: Revitalizing U.S. Manufacturing, they report that the “erosion of U.S. manufacturing isn’t a foregone conclusion. The decade ahead—with increased demand, new technology, and value chain optimization—will give the sector a chance to turn around.”
They predict technology will unlock “productivity gains,” and companies will find growth in new parts of the value chain—“all of which creates an opening for U.S. manufacturing to turn things around.” These technologies touch on every aspect of manufacturing. Among other things they note, “Collaborative robots can handle dangerous tasks and eliminate safety risks, while 3-D printing can now produce intricate, multimaterial components and final goods. Beyond the factory floor, new applications for coordinating distributed supplier networks improve the flow and tracking of raw materials and manufactured parts.”
The “digital thread” promises to lead to new sources of productivity and revenue. They conclude, “Manufacturing needs supportive government programs and policies with long-term certainty and funding. It also needs regional coalitions with everyone at the table: large and small manufacturers, workers, technology experts, educators, public officials, and investors.”
Perhaps we could say the same for the assimilation of truckers who are ready, willing and able to adapt. Of course, it would help to actually know when exactly the dramatic adaptation is supposed to take place, one mile at a time.
Stay up-to-date with the latest commentary and insights on FreightTech and the impact to the markets by subscribing.