Companies are connecting like-minded people and giving them a reason to care about their healthRead more...
Do technology advances threaten trucker driver jobs or make them better?
Name the most common job in your state. Cashier? Secretary? If you’re in Silicon Valley, “software developer” may come to mind. Turns out, however, one of the more common jobs across many states, including California, is a truck driver.
One might argue this finding is false as it flies in the face of an America fueled by a high-tech knowledge economy in which workers are engineers, UI designers, quants, and marketers. But in reality, driven by our insatiable desire for stuff, we continue to produce an abundance of goods of which 71 percent are transported on trucks. Until teleporters are a real, without the trucking industry, the economy would collapse.
It’s no wonder demand for trucking driving jobs are expected to rise 6 percent over the next decade vs secretarial jobs, which are estimated to decline 5 percent, according to the Bureau of Labor Statistics. Today, there are an estimated 3.9 million trucking jobs, roughly the same number as secretaries and slightly higher than cashiers. It’s a pretty big figure.
But despite this huge demand, there is actually a shortage of available drivers today, up to 50,000 fewer drivers than available jobs, according to the American Trucking Association. And this gap is only projected to widen. Today’s cohort of drivers are aging into retirement and fewer of the younger generation are stepping in to take their place. And no wonder: it is a hard job with long hours, weeks away from home and relatively low pay. The ATA warns that at current pace the industry will be short 174,000 jobs by 2028.
Autonomous trucks may solve for this gap, since robots can drive all night long, and at least for now, have no family to go home to. But we’re not there yet and between now and then, the counter narrative is that technology will help make the driver’s job far more efficient, not only making the job more enticing to attract a whole new generation of drivers to the profession, but even creating entirely new categories of workers.
Autonomous reality still 5-10 years out
When it comes to new technologies that could bring trucking into the future, autonomous vehicles will inevitably produce the splashiest headlines, and for good reason. What could be more futuristic than an image of a 40-ton truck barreling down the highway with no driver?
As cool as that may be, there’s still plenty standing in the way of an autonomous reality, not least of which is the recent headline about the pedestrian killed by a self-driving Uber car. That will very likely put the brakes (pun intended) on self-driving technology, at least for the time being.
Given the high cost of failure in autonomous trucking, it’s no wonder adoption so far is low. Almost none of the 128 large and mid-sized US manufacturers and transportation companies surveyed by PricewaterhouseCoopers and the Manufacturing Institute (MI) have adopted autonomous vehicles. Only 9 percent have implemented some kind of autonomous and semi-autonomous technology today, but two-thirds said self-driving trucks would become mainstream within 10 years.
That’s why Mike Volpi, General Partner at Index Ventures, an investor in KeepTruckin’, a provider of fleet management solutions and electronic logging devices, believes that autonomous technology won’t impact the driver shortage as much as other advancements, at least not in the short term.
“We definitely think autonomous driving is a super interesting technology that will have a big impact on the world but the reality is that it’s still a fair ways out,” said Volpi. “People in the industry indicate that it’s at least four or five years out, if not longer, even in good driving conditions, such as dedicated lanes and good weather; it’s much further out in adverse conditions, such as snow and rain.”
In the time being: still more to improve
Just because autonomy isn’t a reality today doesn’t mean the trucking industry can’t improve and transform its current ecosystem, which is plagued with waste, such as empty trucks driven for miles, also known as “deadhead miles.”
The average for the top five carriers was roughly 10 percent of their total mileage, according to a 2010 calculation by Supply Demand Chain Executive. That’s not only wasted time, it’s wasted fuel and wasted dollars.
“My understanding is that there are enough truck miles driven empty every year to send a truck to Mars and back 29 times,” said Ben Narasin, Venture Partner at NEA, an investor in digital freight marketplace Transfix. “It’s a stunning amount of waste, and carbon in the air and just bad lifestyle issues for these guys and gals. Nobody wants to be out there driving their empty truck. They want to be making a living.
“There are things that can be done today with technology to make the ecosystem better and that’s what a lot of marketplace software can do: it can make routing more efficient, make the transfer point from one job to another more efficient, leading to reduced deadhead miles.”
These technologies act as a “stepping stone into autonomy,” said Index’s Volpi.
“They can be the logging technologies that KeepTruckin provides, but also safety-oriented technology that prevents accidents, that helps drivers in adverse conditions, and so forth. These advancements are very likely to make the job more desirable, and hopefully income and salaries go up due to the driver shortage.”
We won’t have to wait long for these solutions to emerge, in part thanks to the ELD mandate, a piece of legislation that requires all trucks to be outfitted with devices that track, manage, and share records of drivers’ on-duty hours. It has been controversial in the trucking industry, but the mandate, which went into effect late last year, will help bring the industry into the modern technological world.
The benefits of the ELD are just starting to be felt, but they’re also just the gateway for other technologies that will create more efficiency, and allow drivers to take on more roles, said Eric Carlborg, Partner at August Capital, an investor in predictive supply chain platform FourKites.
“When we initially looked at FourKites and the space broadly, we thought technology would lead to more efficient routing, more efficient labor and logistics at the end points, better ability to deal with changes and ultimately, better optimization and capacity utilization,” he said.
“There’s everything from the paperwork, to the completion and transfer of the load, to the problem solving. As you think about a particular shipment going from manufacturer to retailer, you could be in a situation where something is selling more than they thought,” he said, explaining, “If you have drivers on the road that have time to think about that, and understand where there’s other capacity, they can help organically improve the efficiency, shifting capacity where it makes sense. Right now, all that’s controlled by the shipper and then the receiver, but the driver in the middle is not able to help.”
Not yet anyway. New technologies will enable the driver to be part of the decision-making, thereby empowering the drivers and decentralizing control.
Technology can lead to more pay
With greater responsibility, comes greater compensation. As much as drivers enjoy efficiency, they need that incentive, Index’s Volpi said. Drivers will embrace technologies like ELDs if they see economic value in them.
“The technology has to make them money. At the end of the day, the real concern is an economic one. If this technology allows the drivers to make more money with their time, they will adopt it,” Volpi said. “Certainly the hope of KeepTruckin as a company is that their prospects are not tied to taking advantage of a regulation and forcing drivers’ hands through regulatory issues. It really is about what things we can do to make them more efficient so they can find better value in the labor they deliver.”
Right now, the pay for truckers isn’t very high, with the median salary hovering around $40,0000 but August Capital’s Carlborg believes that increased efficiency will equal larger margins, which should result in the driver being paid more.
“If you think about a truck being loaded, a truck on the road, and a truck being unloaded, gaining efficiency is about shortening the time required by ensuring that everyone is active as opposed to waiting for somebody else to complete their task,” he said. “That’s improved productivity and that means that the shipper and the customer have better economics which can get redeployed into the transportation system. Ultimately, you can pay drivers more because you’re getting more productivity.”
In the long run technology creates new jobs
If today’s improvements will make truck driving jobs more attractive, what happens in 10 years when automated trucks are a reality? Do VCs think truck drivers and other jobs in the ecosystem will go the way of gas station attendant?
Assuming that automation will kill jobs actually doesn’t tell the whole story, NEA’s Narasin said. He believes that tech always creates new jobs - while automation will eliminate some jobs, it also ends up creating others that we can’t anticipate yet.
To give an example, Narasin brought up what happened when automated gas pumps were first introduced.
“First, somebody had to build those robotic pumps; second, those pumps were more expensive; it’s a much more complex piece of equipment so more people are involved in managing and maintaining them; third, you have more part suppliers; lastly, money for labor is freed up to pay for…. convenience stores,” said Narasin. “I don’t think anybody would have predicted that this innovation would create an entire new category of retail, but there are now 190,000 convenience stores in the United States, and 82 percent of them have gas in front of them.”
While the unknown can wind up being a good thing for workers, these same unknowns actually make it hard to prepare drivers for coming automation since it’s so hard to guess what’s going to happen.
“I’m 50/50 about how to prepare drivers for autonomous trucking,” Narasin said. “We should have theoretical constructs, but also realize that it’s impossible to prepare somebody for an unknown. I can’t go to drivers and say, ‘I would love if you all went out and got strong mechanics degrees to be able to fix your own trucks just so you can be on that side of the ecosystem.’ That could be something that people think through but I think a lot of unexpected things will happen.”
What might this look like for trucking and truck drivers? First and foremost, we are starting from a driver shortage, so any displacement by robo-drivers will start by filling in for this gap. And there are many areas in trucking where drivers will be needed for a long time to come. Take oversized freight such as what we book at FR8Star.com – given the risk and complexity of these loads it will be a long time if ever before these drivers need worry about Google driving their rigs.
Short-term, the most likely impact is going to be in driver aids that make the job safer and more efficient. Autonomous technology will make driving safer by taking over control in the event that a driver falls asleep, or by warning drivers of unsafe conditions that they might not be able to see with the naked eye. And having full visibility to the location of every truck on the road and matching that capacity to demand through freight marketplaces will keep trucks loaded and give drivers more paying miles.
Even partial autonomy will have big impacts. Take platooning technology such as Peloton that allows two trucks to follow one another closely to reduce air drag and fuel consumption.
This technology already saves fuel cost and emissions. As regulation progresses, it is easy to imagine the driver in the rear truck taking their mandatory rest period while the computer follows the lead truck (with a driver at the wheel).
With all trucks connected and some of the capacity autonomous, new routing and business models will be possible. Using drivers to manage pickup, loading and local driving to hand-off to an autonomous rig at the start of designated interstate “autonomous lanes” can create new demand for local drivers that get home every night. Developing such a hub-and-spoke system may attract a new class of drivers that would never have considered the long-haul driver lifestyle.
A bright future
Trucking is mostly seen as a legacy industry. The young people who get into it now are those that come from trucking families, who already know the world. This is not a sustainable way to keep grow a labor market.
Fortunately for the industry, we are in a time of rapid technological change that can make the job easier, better paying, and ultimately make the job an exciting prospect for people entering the workforce. And while it’s impossible to know exactly what the future holds, the sheer size and importance of trucking for our economy means that there will continue to be many jobs for years to come.
(Image source: cdn.vehicleservicepros.com)
Support VatorNews by Donating
Read more from our "Thought Leadership" series
Technology scales this underutilized practice via 24/7 connections and dataRead more...
Virtual and in-person offerings define the future of fitness centersRead more...
Related Companies, Investors, and Entrepreneurs
Joined Vator onFounded in 1995, August Capital is a leading venture capital firm actively investing in entrepreneurial teams throughout the information technology market spectrum.
Joined Vator on
Many venture firms would be best described as a collection of free agents who pursue their own deals and share offices and overhead with their partners. They are more mercenary than missionary and will tell you to focus more on the individual partners and less on the partnership. We hope to have the opportunity to show you how we are different.
We are true partners who have built our own firm together, brick by brick; the same way you are building your company. When we commit to supporting your company, each and every partner in our firm commits to contributing his or her network, creativity and resources towards achieving your success. We are big believers in the power of teams.
We believe you will want an investor with whom you can build a close, supportive relationship over a number of years, yet who will be bold enough to challenge your thinking and your expectations. If Index looks like a good fit, we encourage you to learn about us through the stories and news articles on this website. We invite you to read about the companies we have invested in, and to speak to the entrepreneurs we have partnered with. Their experience is our best reference.
Joined Vator on
Book and Dispatch Heavy-Haul Freight
FR8Star.com is a booking and dispatch platform for carriers and shippers moving heavy haul and open deck loads.We have streamlined the entire booking and dispatch process from end-to-end.
We offer our shippers a free patent-pending heavy haul rate calculator so they can instantly estimate their likely freight cost. This calculator includes state-by-state permit fees, escort cars, fuel and more. This calculator helps shippers quickly determine whether or not they're receiving fair quotes from carriers. Shippers have the option of posting their load details in our platform so our network of carriers can directly submit their quotes.
We provide our network of carriers with booking and dispatch tools to help them operate more efficiently and ultimately offer shippers better customer service. We automatically suggest loads to our network of carriers based on a variety of factors including the type and location of their trucks.
Joined Vator onMatt is CEO of FR8Star.com, the digital marketplace for flatbed and oversized truck freight. Bringing together 10 years starting Internet 1.0 companies and 10 years consulting for truck manufacturers to build a killer team to transform trucking.