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Autonomous trucking provides lucrative opportunities

Christoph Domke, Director - Mobility 2030, Global Strategy Group at KPMG looks at the role of autonomous drive technology in commercial trucking

The trucking sector is currently undergoing significant changes. We are likely to see more developments and disruptions in the industry over the next ten years than in the last 50 years combined. New business models like digital freight brokerage, last mile delivery, fleet management systems, concepts such as vans and drones, combined with real time data, sensorisation and 3D printing will continue to transform the sector.

One of the biggest disruptions in the market is autonomous truck and platooning technology. In terms of forecast revenue, it is currently in second place, lagging behind connectivity and telematics. While autonomous trucks have operated successfully for years in off-highway vehicle environments like corn fields in Iowa and mines in Australia, we now expect to also see the technology applied to on-highway vehicles.

Trends driving the future of autonomous trucks are manifold. The growth of populations in urban areas is stoking demand for hub-and spoke logistics, autonomous driving technologies, and greater connectivity. Moreover, high fuel expenditures and volatile fuel prices are forcing fleet operators to optimise total cost of ownership and operational efficiency. Furthermore, the convergence of connectivity networks and the leveraging of Big Data are resulting in the development of smart and connected cities, road networks and vehicles. In addition, as the average truck driver age (e.g. 49 in the US) continues to increase, driver shortage remains a significant issue for the trucking market. Thus, OEMs have shifted their focus towards automated mobility as a solution to help older drivers and attract young drivers.

Autonomous driving technologies and vehicles will usher new value chain partners into the trucking landscape, and could include IT companies, cyber security companies, and algorithm-based developers

The benefits of autonomous drive technology are clear. It can improve safety and lead to better fuel consumption, heighten driver comfort and reduce stress levels as well as enhance fleet productivity and management. In the distant future, fully autonomous trucks (Level 4) could help operators save on drivers’ salaries, thus completely transforming cost structures. While fully autonomous trucks are not expected to be seen in the market before 2030, truck platooning will become a more common long-haul trucking application from 2023 onwards.

From a technology standpoint, problems such as adverse weather conditions or interactions with cars while exiting highways still pose challenges. Reliability on wireless communication, software, maps, and sensors must also be clearly addressed. Furthermore, in the years ahead, fleets will need to be able to use multi-brand platooning, rather than only being able to link trucks of a single brand.

The convergence and integration of sensors, connectivity, driveline technologies, and algorithm components will be necessary for a fully functional, Level 3 (limited self-driving automation) autonomous truck. Sensors improve spatial awareness and obstacle detection up to 360°, enabling ADAS technology and active safety functions and reducing risk of accident. Connectivity will facilitate communication between the truck, the driver, and the environment, ensuring that all are informed and functioning. Driveline will be relied upon to handle the operation of the truck in autonomous mode, enabling technology such as ACC that can control speed. Algorithms and the operating system (OS) will be the brain centre of the truck when driven in autonomous mode, requiring no driver input.

Driveline is expected to experience the largest decrease in cost over the forecast period due to its current maturity in the market. Amid its high level of complexity, the demand and cost for algorithms is projected to be the highest by 2025. Consolidation and partnership potential in the sensor, connectivity, driveline and algorithm market is high as many OEMs and Tier I suppliers venture into new technological areas, especially for algorithms that will require a new type of expertise.

The business case for autonomous driving is still under development. OEMs and suppliers need to persuade fleet managers to invest technology and still pay wages for drivers of vehicles in operation

With technology available today, the capability exists to produce a functional Level 3 autonomous truck. However, the industry is currently at a stage where technology has outpaced regulations, societal acceptance and business case considerations. The development of legislative guidelines in key regions like Europe and the US in areas such as safety and liability is crucial to the testing and potential of autonomous trucks. Society needs to be convinced as scepticism of autonomous driving on public roads remains high, even though the technology is available and has proven capable in on-road demonstrations. The business case for autonomous driving is still under development. OEMs and suppliers will need to persuade fleet managers to invest significantly in this technology and still pay wages for drivers of vehicles in operation. This is certainly not an easy undertaking, with autonomous vehicle technology units (Level 3) costing between US$30,000 and US$50,000 (retail).

In addition, mismanagement, interpretation and storage of vehicle-generated data can lead to cyber security issues, including hacking and/or identity theft. With autonomous driving technology development receiving widespread OEM focus, the future of the market is also highly dependent upon the support of government policies – such as market incentives such as toll and tax reductions – and early consumer adoption.

The role of the driver in the autonomous truck of the future has also been under discussion in recent months, particularly amid significant driver shortages in countries such as the US and Japan. There is some way to go until we see fully autonomous trucks on our roads, so truck platooning still requires drivers to be present in the cab, even though not actively driving. Given that they still need paying, their responsibilities could involve office management duties or looking for freight via mobile apps.

In a future with fully autonomous long-haul truck-trailer combinations operating in certain highway corridors, the question arises as to whether trucks are needed at all. For instance, trailers could be fitted with engines or motors. This would make it possible to lengthen the trailers under current legislative restrictions in Europe and increase the revenue potential for fleet managers and individual drivers.

Level 3 autonomous trucks will become more widespread by the middle of the next decade, enabled by the convergence of advanced technologies including sensors, radar, connectivity systems, cameras, and safety systems. Key technology growth has impacted the following areas in particular:

  • LiDAR: The market is showing signs of moving towards solid-state LiDAR, but the first generation of commercialised LiDAR is likely to be fixed-beam laser scanners with two or three suppliers dominating the space.
  • Sensor fusion: Stereo cameras and LiDAR are likely to emerge as strong enabling technologies backed by multiple layers of data stitching to create optimal mode transition.
  • 48V power net: With a growing demand for power and the need to find a commercially viable power network able to complement autonomous driving, 48V architecture is likely to emerge as a go-to philosophy.
  • Deep learning through algorithms: Complex driving scenarios posed for highly automated driving would require high-precision, map-based data combined with a vehicle’s sensory vision technology to ensure safety in all conditions.
  • HD mapping for algorithms and connectivity: More complex driving scenarios thrown at high automation would require a new layer of data validation and redundancy that can be provided by HD maps capable of offering static data with high precision.
  • V2X communication for connectivity: V2X will allow for a smart, connected, and safer world through communication between vehicles, devices, roads, and cities. Without improved communication between vehicles, traffic could worsen.
  • Driver information displays: Driver information displays that prioritise alerts and smart displays of vital information will be a future trend; the market will move towards digitisation of information about the truck and driver health.

The advent of autonomous driving technologies and vehicles will continue to usher new value chain partners into the trucking landscape, and could include IT companies such as Google and Facebook, cyber security companies, and algorithm-based developers. Various leading non-traditional players have already made significant investments in the area in recent years or made announcements to do so in the future. These include Uber (via the acquisition of Otto), Google’s Waymo and China’s Baidu.

Given that the number of autonomous start-up companies working in the autonomous trucking sector is still very small compared to those in the car industry that offer such vehicle technology (over 100), the segment is expected to see further growth and competition over the coming years. While shifting from pure hardware to service providers, most OEMs will further develop in-house autonomous solutions while also looking towards potential synergistic partnerships or acquisitions of algorithm developers and Tier I and Tier II suppliers to assist in new technology expertise.

This article appeared in the Q3 2017 issue of Automotive Megatrends Magazine.