Talking Tech with Truckers in 2019

Friday, January 18, 2019

On January 15, Steve Sashihara returned to Road Dog Trucking Radio to discuss disruption in freight transportation and the results of Princeton Consultants' recent survey. Following are excerpts of his conversation with host Mark Willis and callers.

Mark Willis: Drivers, when you think about the future of trucking, you might think, OK, autonomous vehicles, more technology in the cab, the Uberization of freight. Are we going to see more apps coming to the forefront to help your job out there, to make it easier for you? Yes, to all of the above? That’s certainly going to be the motion that we’re going to be riding as technology drives what's going on in the industry. Great to have on board Steve Sashihara, the co-founder and CEO of Princeton Consultants, an organization that blends advanced analytics and data science with management consulting. They help companies in transportation and other industries achieve transformational improvement, service, and efficiency. Steve, thank you for doing this and thanks for chatting with the drivers, the front line if you will.

Steve Sashihara: Thanks, Mark. It’s a real honor to be talking to your listeners.

Mark Willis: What are you hearing from folks that are making the managerial decisions about technologies like driverless trucks? Are they firmly behind this whole concept?

Steve Sashihara: Good question. Nobody knows what the future's going to bring, so everyone has an opinion. We run a survey every year. We’ve run it for the last four years—about 750 executives have taken it. About half are running carriers, medium‑size and large. The other half are at industrial buyers of transportation, suppliers and other organizations. One question we ask is “Where do you see the impact of self‑driving trucks?” Most of our audience says over the next seven years, “low impact.” As you said in your intro, self-driving trucks are out there, but a lot of our clients see them as fairly niche and fairly limited. We have some thoughts of where and when we’ll see them, but I think a lot of people, particularly your audience, want to know, “Should I just find another job? Are the self‑driving trucks going to put me out of work next year, in a couple of years?” We think not and our survey audience thinks not as well.

Mark Willis: Let’s go to the phone lines. Big Deal is going to be first up in the state of Indiana. Welcome to the program. How do you feel about self-driving trucks? They’re here. Do you think it’s around the corner, or do you think it’s a long way off?

Big Deal: I honestly don't know if it’s around the corner, but I can tell you one thing—cell phones came out in the ‘90s when I was growing up. I’m not saying automation is that far off, either. I don’t necessarily disagree with the technology, and I don't necessarily agree with the technology. I like something to help me do my job better, but I’ll be honest—I don’t like all this automation taking me out of the job. I like to work. I don’t know about anybody else. I kind of feel like it's putting me in the seat and making me a steering wheel holder more than a truck driver at this point.

Mark Willis: Being a truck driver, you’ve got the skills. You know what to expect. You’ve got that sixth sense, if you will. You’re saying that technology is going to take all that away from you?

Big Deal: I just think we should improve the education and the driver training, I guess, for the new guys coming in the industry. We need to figure out some way to make the industry exciting for the driver again, not unexciting.

Mark Willis: Big Deal, I appreciate it. Steve, what do you think? From his standpoint, he thinks technology is really going to take a lot more of the decision-making skills away from the young drivers.

Steve Sashihara: Some people think that’s the case. Our professional view is that it’s going to actually up the grade of the driver. It’s going to take some portions of the ride, which can be done by machines, but it doesn't replace people. One way of thinking about it is autopilot on a commercial air flight. The pilot is in charge of the difficult parts—the takeoff, the landing. When the plane is in autopilot, the pilot is still ready to flip it off and interrupt, but now the pilot can do other jobs while flying, not just having hands on the yoke the whole time.

Mark Willis: Next up, let's go to Big Rigger in the state of Maine. Welcome to the program, sir.

Big Rigger: How you doing, guys? I'm just trying to grasp this. You’re talking five, six, seven years when you’re going to start seeing this. I think it’s going to be a lot further off, due to the fact—where is the cost effectiveness in this? You’ve got a truck that essentially can drive by itself. I imagine the cost of that truck is going to be way more than a standard truck. Not only that, you have to put a driver in there. You have to put in somebody that knows what he’s doing. They say the driver is going to be sitting there. He’s going to be assisting the truck. What are you going to pay this guy? Are you going to pay him minimum wage or are you going to pay him, say, what truck drivers are getting paid now? Truck drivers are getting paid 60, 70, 80 thousand—some guys more. I don’t see the cost-effectiveness in this program right now. Maybe 15, 20 years from now, sure, it might be cost-effective. But I can't see it in the next 5 to 10 years. The other part is, too, what if that truck gets into an accident? Who’s liable when that truck’s driving on its own? Is it going to be the software maker? Is it going to be the trucking company? The driver? There's a lot of stuff they got to work out before they get this online.

Mark Willis: Big Rigger, thank you for that. What do you think, Steve?

Steve Sashihara: Thanks, Big Rigger. A lot of what you’re saying I think is right on the money. At the end of the day, it’s going to be a dollar decision. As he said, if we basically have a full driver in a vehicle, you’re double-paying. You’re paying for the labor and you’re also paying for a fancy truck. That’s what we think, and we’re quite in agreement. If you can make part of the trip, say the long-haul thousand-mile portion on an easy-to-drive interstate, where you could use robotics, some of the savings would be no hours of service. You’d get team-like performance if they drive in pelotons. Maybe better gas efficiency. Then, for the beginning and end of the trip, a human being, not a robot, is picking up and delivering the freight. The liability question, a lot of people are asking that, as well. A lot of people that I have talked to say if the product is a self-driving truck, hardware and software, then it becomes product liability. Whoever sells the truck is liable.

Mark Willis: Let's go to Baby Maker, who's next up in North Carolina. What do you think? You're on with Steve.

Baby Maker: I’ve got two questions and they basically go together. When they put a driver in one of these automatic trucks, are you telling me they're going to want us driving these trucks for less money or are they going to keep paying us what they’re paying us now? If it’s going to be a 20‑, 30‑, 40‑thousand‑dollar job, I’m not going to drive a truck. I don’t care whether I’m steering it or not. My other question is, I don’t understand how they’re going to get this to work anyway. They can’t even make this late-model truck I got stay on the road with the technology now—and you’re going to add more technology? They're telling me on the Internet that these trucks are going to cost $250,000, $300,000. When this truck goes down with all this technology, who’s going to pay me for sitting while they spend a week or two figuring out what's wrong with it?

Mark Willis: Thank you for that. What do you think, Steve?

Steve Sashihara: Great questions. To the first one, we believe that drivers will make more. As you said, they can’t make less—that’s one of the reasons we have a driver shortage. It’s not just increasing the hourly pay, daily pay, weekly pay, which has got to be there, but also improving the lifestyle. Being able to get drivers home more, being able to give you more visibility to road conditions and stop conditions. You’re also right to be wary of this technology. That’s why we think it’s going to come a little slower than many people think. We're going to have to put it in piece by piece. I think that lane departure and collision avoidance is solid technology that has been proven. Ten years ago, it was science fiction, now it’s reality in a lot of people's vehicles. I think it’s step by step as we put more and more of these features in, but it's going to be a long time before we can take a driver out of the vehicle. One last thing I want to say is, imagine you could make money while you sleep. You’re in your birth and a single op. Overnight, it’s driving. If it has problems, it'll alert you and wake you up, but right now, you only get paid when you’re moving, burning hours of service. If you could be sleeping, working on your laptop, talking to the dispatcher and autopilot is burning hours of service, that would be more money for you.

Mark Willis: You mention the price tag of about $250,000 for the self‑driving vehicles. I would have to think, Steve, from that standpoint, who’s going to be profiting the most from this self‑driving technology? Is it the aftermarket? Is it going to be the original equipment manufacturers? That's an enormous amount of money. Is it about the technology and improving the efficiency, or is it about profitability, in your estimation?

Steve Sashihara: Let me tell you a quick answer. If you think of the three hottest companies that everyone’s talking about right now, they are Uber, Lyft and Tesla. All three of those companies are tech and transportation. Our little corner of the world, suddenly, is hot. It’s transportation and tech. If you also look at those companies, you'll also see, "Hey, they lose money!" I know it's weird, but the current world is, you lose money. The shareholders invest in you and private equity invests. You lose money, but you gain market share. It’s very likely that the true costs of these self‑driving cars will not be borne by the carriers, the shippers—certainly not the drivers. It’ll be done by stockholders, everyone trying to be the next Ford or GM of trucking, the next generation of trucking. I don't think the trucks will enter the market at their true cost. I think they’ll be sold at a price that is competitive with existing diesel trucks now.

Mark Willis: I want to bring up the Uberization of freight. A lot of talk about that, about the gig economy and what is going to be driving the trucking industry. A lot of it driven by technology and the apps that are out there. where you can pick your freight and just go. How big of an impact is the Uberization in the trucking world?

Steve Sashihara: We’re specialized in the heavy‑duty side of things. It’s possible that non‑CDL drivers will be running little first-mile, last-mile things. We're focused, in our survey and our clientele on class seven, class eight, CL class B, traditional, regional, long‑haul driving. We think that the different channels of the traditional carriers—3PLs, brokers in the middle, and traditional load boards like DAT and—are all rushing to try to reduce driver wait times and make loads attractive. I think everyone’s trying to skin it the same way—we’re trying to put more automation into dispatch so that the drivers can check out their options and make more money.

Mark Willis: Absolutely. Again, the technology is going to be right there in the palm of their hand, which is really going to make it very convenient for them. Is that going to be one of the names of the game, going forward here—the ease of availability, finding that freight? If you can do it from the palm of your hand, it’s going to make the process a whole lot easier, isn't it?

Steve Sashihara: One thing that we were thinking about is Airbnb. Airbnb took over the hotel business. One thing it did, it said both sides can review each other. If you’re a tenant, the landlord can look at you and vice versa. As you look at Uber, you can score your Uber driver. Your Uber driver can score you as a passenger. It’d be nice as a driver to be able to say, “I see the origin-destination, but tell me about the endpoints. Are these guys pains in the ass? Are they going to make me sit for an hour to unload? Are they going to battle me over the accessorial? Are they a five-star pickup and delivery? I might go for that."

Mark Willis: All right, I've got just about a minute and a half left. Of course, the majority of the freight is moved by the owner‑operators out there. They move something like 60% of the freight out there. It’s an enormous amount of dollars involved. Is that the area the self‑driving trucks are going to have to convince that they need to invest in? How critical is that owner‑operator market to self‑driving vehicles?

Steve Sashihara: As you’re saying, you can’t automate trucking unless you address the owner‑op model. Like I said, our view is a little complicated. We think the owner‑op, the live driver in traditional technology, will be doing more local regional moves, and maybe relaying it if it’s a long, over 550‑mile load that will be using very high, dense lanes. Instead of point to point, most of the loads will end up being relayed.

Mark Willis: It’s shuttled, in other words. All right, very good. Thank you, sir. What a great hour.