- Title: Autonomous trucks hit U.S roads in an uncertain market
- Date: 4th April 2022
- Summary: German Chancellor Olaf Scholz said on Sunday (April 3) that Western allies would agree on further sanctions on Russia in the coming days over its invasion of Ukraine and the "atrocities" committed by Russian troops in a town near Kyiv. BERLIN, GERMANY (APRIL 3, 2022) (REUTERS) (SOUNDBITE) (German) GERMAN CHANCELLOR, OLAF SCHOLZ, SAYING: "The murder of civilians is a war cr
- Embargoed: 18th April 2022 11:01
- Keywords: DHL TuSimple autonomous autonomous technology autonomous trucks self-driving trucks
- Location: TUCSON, ARIZONA, UNITED STATES
- City: TUCSON, ARIZONA, UNITED STATES
- Country: USA
- Topics: Economic Events,United States
- Reuters ID: LVA003856730032022RP1
- Aspect Ratio: 16:9
- Story Text:U.S. self-driving truck companies have a golden opportunity in the form of a nationwide driver shortage, but their robot drivers still are not ready and neither are their biggest potential customers.
Autonomous trucking developments come at a critical time for the U.S. industry, which faces a record shortage of 80,000 drivers at a time when demand for online shopping and rapid delivery times is straining supply chains.
The success of self-driving trucks is also crucial to private investors, who have so far poured nearly $9 billion into U.S. AV trucking companies, according to data from Pitchbook. These include TuSimple Holdings In.c, Aurora Innovation Inc., Embark Technology Inc., and Alphabet Inc.'s Waymo.
But large logistics companies making up the tech startups' coveted future customers are in no rush to sign big contracts and continue testing the technology of multiple providers in limited partnerships.
"Everybody is at a point where they're hedging their bets," said Eric Fuller, the Chief Executive of US Xpress Enterprises Inc, a carrier and trucking brokerage that manages 6,000 of its own tractors.
The company has announced partnerships with TuSimple and Aurora. Fuller, who also sits on TuSimple's advisory board, said US Xpress was working with all the other AV companies but had yet to announce more partnerships.
The companies say they have developed technology that can safely pilot a 33,000 pound (15,000 kg) truck down a busy highway and are pushing towards commercial launches.
They provide the sensors and software, and some have partnered with truck manufacturers to incorporate their technology at the assembly line, but all rely on large logistics companies to pay for their offering.
Among the technology on TuSimple's autonomous trucks are long- and wide-range cameras, radar, and lidar. Lidars use laser pulses to measure distances and render precise images of the environment around the car.
The U.S. Southwest, primarily Texas and Arizona, where weather and regulations are favorable, has emerged as the testing ground for heavy-duty autonomous vehicle (AV) companies.
Large logistics groups such as DHL, United Parcel Service Inc, and Ryder System Inc have launched pilot programs with several autonomous trucking companies, but also say they are still in the early stages of exploring the technology.
While much attention has been focused on self-driving taxis, industry experts increasingly bet on driverless trucks to be the first autonomous vehicles to generate meaningful revenue due to the less complex driving environment in which they operate.
Making a meaningful dent in the U.S. market of 2.3 million trucks will take time, however, and industry experts project no more than a few hundred-thousand autonomous trucks over the next decade.
Logistics companies hope robo-trucks will one day take over monotonous long-haul tours, but not replace existing jobs.
Human drivers will rather spend more time on shorter, complex routes near their homes, which are still too difficult for self-driving technology.
Pitchbook analysts expect the global AV trucking market to balloon from around $530 million in 2023 to $167 billion in 2035.
"There's still opportunity for more players. We're not at a point where we're shaking things out," Jim Monkmeyer, president of transportation and lead logistics provider at DHL Supply Chain, said during a February visit to TuSimple's testing facility in Tucson, Arizona.
DHL Supply Chain, which operates some 1,500 trucks and manages around $3 billion of annual North American freight spend, has so far partnered with TuSimple and Embark and put in reservations for future trucks with both companies. Those orders are slated to be fulfilled in 2024.
Monkmeyer said DHL had contracted with multiple providers to reduce its risks, but added that placing truck reservations early was crucial in order to be among the first to explore the new technology.
Monkmeyer and his logistics colleagues say self-driving trucks offer the potential to increase freight capacity and reduce cost, with robots, unlike humans, not subject to a mandatory 11-hour daily driving limit.
"We see a huge opportunity with autonomous trucks because of the large costs associated with trucking today and the challenges with capacity," Monkmeyer said. "The capacity challenges are largely driven by the shortage of drivers. And so we see an opportunity over time, over several years here, to have an additional opportunity to provide capacity through vehicles that eventually will be unmanned.â€
'LOWER COSTS'
But the economics only pan out once the driver is out of the cabin.
So far, only TuSimple has removed its safety drivers in a handful of night-time trial runs along an 80-mile (130 km) stretch of highway between Tucson and Phoenix, Arizona. The company refers to these trips as "driver-out runs".
During a Reuters visit, the company did a daytime demonstration with a safety driver inside along with a black Astro-van following closely behind. TuSimple refers to that vehicle as to the "driver-out support vehicle," which is equipped with emergency control powers, antennas, and screens to see inside the truck cabin as well as the lidar and camera views of the truck.
Once the truck left the lot, the safety driver pushed a button to hand over the controls. A computer-generated voice then said, "Autonomous driving started."
On the ride it demonstrated an incredibly tight turn while leaving the highway, turning onto an access road from the exit ramp.
As it returned to the TuSimple garage, referred to as the Tucson Terminal, the safety driver resumed controls and took the wheel as the same voice from earlier said, "Autonomous driving off."
The company is planning to present per-mile cost calculations in the next few months, Cheng Lu, TuSimple's former CEO, said in late February, just days before the company replaced him in a surprise move.
The calculations are one part of the path to commercialization, said Lu, who now serves as an adviser to the new CEO.
"Today we believe we're very far along and there's a clear path to commercialization and that's been demonstrated by our driver-out runs. So in December 2021, we did 80-mile, first 80-mile ever driver-out run for trucking. That's something no other competitor has done in the industry. We've since done over 500 more miles of driver-out runs. And that's on one lane. But that's a huge milestone. It really means that from here on, we can scale the driver operations to more lanes, daytime, nighttime and more trucks. And therefore you have a very clear approach to how far along in terms of complete commercialization."
"Ultimately everybody in this industry, the key stakeholders, want to see autonomy happen because of the value proposition. So enabling freight capacity, everyone needs it today. Supply chain is in trouble. There is a severe driver shortage, increasing costs, environmental and safety. So I think everyone is very welcoming of having those discussions. First, the question is: who do you partner with? And that comes down to technology. You know, who has the best technology and who has the clearest path to commercialization?"
Drivers account for more than 40% of per-mile costs, according to data by the American Transportation Research Institute.
Autonomous driving could halve driver costs, with the companies planning to charge between 35 and 45 cents in per-mile subscription fees, according to two industry experts.
But the companies, three of them publicly listed, are far from generating meaningful revenue, let alone profits. Embark recorded a 2021 net loss of $124 million, TuSimple of $411 million, and Aurora of $755 million.
For the logistics partners, access to sufficient capital is crucial when determining whom to partner with, DHL's Monkmeyer and US Xpress' Fuller said.
TuSimple said it ended 2021 with some $1.3 billion left in cash, Aurora with $1.6 billion.
But the companies also confront other real-world hurdles as they try to release their technology on a larger scale.
Ryder, which operates nearly 240,000 trucks and around 800 U.S. maintenance locations, has partnered with TuSimple, Waymo, and Embark to explore how self-driving trucks would fit into its network.
The logistics company wants to understand how to service the host of lidar, radar, and camera sensors and whether trucks operating around the clock require different maintenance schedules.
In the long run, the tech companies also had to tackle more challenging driving conditions, such as snow, said Ryder's head of new product development, Karen Jones.
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