The Future of Same Day Delivery

 

A study commissioned by Intel has given us a glimpse into the economic impact of automated vehicles in the future. The report estimates that by 2050, automated vehicles and the self-driving market will add 7 trillion dollars annually, to the global economy.

By 2050, automated vehicles and the self-driving market will add 7 trillion dollars annually

“With interest from both seasoned and startup automakers, the autonomous vehicle (AV) market is expected to grow exponentially in the coming decades. A new study conducted by research firm Strategy Analytics and commissioned by Intel predicts that driverless vehicles will constitute a $7 trillion economic value by 2050, with $4 trillion from consumer use and another $3 trillion from business use,” says a recent article from Futurism.

The growth of automated vehicles will take place gradually

Futurism goes on to say that such a massive change won’t just happen overnight. The growth of automated vehicles will take place gradually, reaching upwards of $800 billion by 2035.

Trucking Takes the Lion’s Share

While the possibilities for self-driving vehicles are nearly endless, it will be the trucking industry that will see the highest rate of utilization. It’s estimated that the driver shortage rate will continue to climb in both the U.K. as well as the U.S. to a combined total of 300,000 drivers. Many trucking companies will be looking to automated vehicles as a possible solution to the industry-wide talent shortage.

The driver shortage rate will continue to climb in both the U.K. as well as the U.S.

“Transportation companies in many major international markets report that they expect significant shortages over the next several decades for long-haul drivers due to an aging workforce and the lack of qualified new applicants.” In the U.K., the Road Haulage Association estimates that it was short 60,000 lorry drivers in 2016 and that will grow to 100,000 in 2017.

In the U.S., the ATA projects that by 2025, the trucking industry will face an acute shortage of over 200,000 qualified drivers.

Trucking associations in Australia, Canada, Germany, and the United Kingdom all project that aging workforces and lack of new qualified applicants will intensify driver shortages in these countries in the next 10 to 15 years.

Japan Automobile Manufacturers Association projects that driver shortages will intensify over the next five to 10 years. Driver shortages are intensifying in Brazil and South Africa.  In India, 10 percent of the national truck fleet is currently unused because of a lack of drivers. The [cumulative] shortfall will lead to the need for 17 million more drivers over the next decade,” according to the study conducted by Strategy Analytics.

Driver shortages will intensify over the next five to 10 years.

Additionally, there’s also the consideration that brick and mortar stores are falling to the wayside. As more consumers turn to the internet for their shopping needs, the need for a more adaptive logistics is also on the rise. Retailers gone e-tailers will have to find more efficient means to deliver goods directly to customers making automated vehicles less of luxury and more of necessity.

The Realization of Same Day Delivery

Amazon continues to push the envelope for delivery speeds with the ultimate goal of achieving same day deliveries. Driverless vehicles, specially customized for LTL and parcel carrier services, will operate out of a fixed distribution center allowing them to carry high-volume, high-frequency items that are regularly ordered by consumers. Working within the fixed range of a DC has the possibility to shorten the average delivery time to just a few minutes.

Carry high-volume, high-frequency items that are regularly ordered by consumers

If we combine this localized supply chain with other venues such as drone delivery, same day delivery for a wider array of parcels, packages, and general consumer goods become a reality. Factor in that automated vehicles and drones won’t be subjected to the same HoS regulations as a human driver, shipping companies can see a higher level of efficiency through extended service hours at a much lower cost.

Shipping companies can see a higher level of efficiency through extended service hours at a much lower cost.

Of course, as the demand for automated vehicles continues to rise, there will also be a rise in the concern over displaced drivers. However, while it might seem like drivers would be phased out entirely with automated vehicles, there will still be a need for human involvement. This is what Strategy Analytics has to say about driver displacement:

“Drivers in these industries are likely to be displaced in significant numbers. However, it will also create opportunities for transportation companies to utilize the “freed” time of drivers to evolve and enhance their role and impact to the organization.

Drivers will become customer service professionals who can sell and market services and related goods and offerings

“In high-touch and high-turnover routes, drivers will become customer service professionals who can sell and market services and related goods and offerings. Drivers will also transition to become supply chain experts by extending inventory management and order processing. What is clear is that proactive transportation companies should explore these opportunities and plan for the re-training and balancing of their workforces.”

 

 

 

 

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