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Why self-driving trucks are good for truckers, and why that’s good for everyone

Trucking will become more attractive because of the increased efficiencies of automation. (Photo: Shutterstock)

Last year the two biggest fears in the trucking industry were the ELD mandate finally coming to roost, and the driver shortage issue. Driver shortage, and the related aging trucker demographic have been long-standing issues, but on top of these stresses, 2018 has emerged out of the 2017 shadows with a strong economy, coupled with the rapid growth of e-commerce.

A perfect storm surge

Surging transportation demand is spurring trucking companies to charge as much as 30% more for long-distance routes compared with prices a year ago, and they’re hard pressed to add capacity because of a long-standing shortage of drivers, according to Bloomberg. The labor scarcity is getting worse because of new federal rules to prevent big-rig operators from exceeding limits on their hours behind the wheel.

“With the combination of driver shortages and regulation changes, it’s something I think that everybody’s facing,” Kellogg CEO Fareed Khan said on a conference call with analysts on Feb. 8. “So it’s something that we need to manage.”

The higher freight costs add to concerns that inflation is heating up, which could raise interest rates. Wages are also climbing, with average hourly earnings increasing 2.9% in January from a year earlier, the most since June 2009. U.S. unemployment held near a 17-year low of 4.1%. It’s created a perfect storm.

Tom Hayes, CEO of Tyson, said the largest U.S. meat producer is getting pinched by higher expenses for both cargo and labor. “These additional costs are included in our outlook,” he told investors and analysts on Feb. 8. “However, we’re assuming we’ll recover the majority through” higher prices for consumers.

The tightness in the trucking market probably won’t ease anytime soon. Employers can’t find enough drivers — at least at the wages companies want to pay — as low unemployment spurs competition from other industries.

The emerging story of automation and the so-called ‘death of the trucker’

For a brief time at the top of the year debates about the freight market and the tightening labor market for truckers (especially the long-haul variety) led to experts and analysts up and down the supply chain to define their terms: Is it really a driver shortage? Is it a labor issue or an economic one? Will skyrocketing spot rates trickle down to contracted lanes?

Caught up in the chaos was the emerging story of automation. At first the story was supposed to be good news for everyone but truckers. “Driver shortage? No problem. Bring in the bots. Sorry, truckers. You didn’t really like your job anyway, right?”

But between the emerging realities of how research and development is actually going for car and truck manufacturers, as well as general on-the-ground infrastructure realities, a new story is emerging. The reality is that the fully autonomous, dock-to-dock trucks is, well, more like fantasy. It’s a long way off. It’s more like, “We may see it in our lifetime,” than, “just around the corner of the forthcoming decade.”

This is not the story that’s won the headlines in the last couple of years. Goldman Sachs predicted trucker job losses of 25,000 per month as self-driving trucks roll out. McKinsey Global Institute put out a report with the possibility of 1.5 million jobs lost in trucking over the next 10 years. The International Transport Forum proposed that 2 million American and European truckers could be directly displaced by 2030.

No doubt, there are real socioeconomic reasons behind the data, it wasn’t all just fake news for the sake of a headline, no fear-mongering. For example, the industry is evolving rapidly, and there are two problematic trends for trucking. The average age of a truck driver today is 49, compared to 42 for the average US worker. 55% of truckers are over the age of 45 while less than 25% are younger than 35 years old. The American Transportation Research Institute (ATRI) found that the average age has been steadily increasing for decades.

Driving a truck is nearly as hard as being a rock star. The hours are long and grueling. In some cases, trucking can keep drivers away from home for up to 200 nights a year. That’s just not worth it unless you are a rock star enjoying the rewards of onstage glory and reaping the benefits of the adulation of fans and groupies. Or, to put it more modestly, making at least as much as construction-related jobs, which are as prevalent as ever in the strong economy — and where you get to enjoy a little more consistent home life.

The new story: automation will help everyone

Uber Freight recently released a report that compiles months of research. In their baseline projections without self-driving trucks, the number of trucking jobs nationwide increased 766,000 over the next ten years. When you add self-driving trucks into the scenario above, truck-driving jobs increase even more, with many long haul jobs shifting to local haul to support growing freight volume moving in and out of transfer hubs. They write:

“The biggest technical hurdles for self-driving trucks are driving on tight and crowded city streets, backing into complex loading docks and navigating through busy facilities. . . . These maneuvers require skills that will be hard for self-driving trucks to match for a long time.”

This is something truckers will probably say didn’t need studying. They’ve been saying it for a long time. Uber does present an interesting analysis, however. They argue that the trucking industry will split into two parts. Long-haul transportation over major highways will be performed increasingly by driverless tractor-trailers that will deliver freight to “transfer hubs” on the edges of major cities. There, local workers and drivers will reload the cargoes and make delivery to final customers.

What is the bottom-line impact?

Self-driving trucks will improve efficiency on long haul routes, lowering the overall cost of trucking, and thereby reducing the total cost of goods being shipped. When goods are cheaper, consumers buy more. When consumers buy more, more new goods need to be shipped, which drives truck freight volume up. In this scenario, when 1 million self-driving trucks are operating on highways, you would expect to see close to 1 million jobs shift from long haul to local haul, plus about 400,000 new truck driving jobs will be needed to keep up with the higher demand.

According to this line of reasoning, trucking will become more attractive because of the increased efficiencies.

Trucking is a symbol for the rest of the country

Losing trucking jobs to automation sure gets a lot of the media attention on the subject, but they’re hardly the only industry that could see people losing their jobs. In a Pew Research Center poll last October, nearly three-quarters of respondents say they worry that “computers and robots could do most of the work currently done by humans.” And yet the job market seems to be sending the opposite message: With a low unemployment rate of 4.1 percent, many companies can’t find good workers.

Whatever the historical precedent on the subject of technology, lately the trend is a positive thing in terms of the job-creation connection. The McKinsey Global Institute recently noted in a report that “new technologies have spurred the creation of many more jobs than they destroyed, and some of the new jobs are in occupations that cannot be envisioned at the outset; one study found that 0.56 percent of new jobs in the United States each year are in new occupations. Most jobs created by technology are outside the technology-producing sector itself.”

No one knows exactly how fast self-driving trucks will become part of the industry, or how much impact they will have in the coming years, but signs are pointing to a new reality: they will help the industry. And the people who keep it running will continue to show us why they’re such an important part of the supply chain.

Will they ever be treated like rock stars? A guy can dream.

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  1. Joe

    Company make money . Local driver will make a lot less then long distance. To make a short story. Their are gone be a lot of new trucking jobs because no one is going to work for pennies. ?

  2. Brad schmidt

    The one thing u don’t talk about is how wages for the otr driver r not increasing,robots work cheaper, at 1 time u could make 6 figure income,now that’s cut in half,with all the regulations,actual drivers will take another hit on the wages we earn,large companies make the money,but aren’t will to spread the wealth to the people who actually do the work

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