The logistics industry does the necessary and quiet work; it creates, collects, and distributes goods. Typically, we think of sea, air, and land freight when we think of delivery. However, whether you cross oceans or skies, the ultimate stretch is on land, utilizing heavy-duty trucks. Unsurprisingly, we’ve seen increasing digitization and automation in the supply chain disrupting the logistics ecosystem. Today we explore the activity in the Truck Technology industry, looking at a few factors that drive its demand and growth, as well as a brief glimpse into the latest news among the players in our coverage.

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Broadly, what’s happening in the logistics industry? 

The recent pandemic disrupted the global supply chain. According to the IFC 2020 report, the spread of Covid-19 which resulted in lockdowns and constrained movement created “bottlenecks for freight.” Though the logistics industry as a whole is expected to take a hit, and even with the recovery of fractured manufacturing supply chains, ecommerce is set to rise, simultaneously increasing the need for deliveries.

While the macro report is plausible, some argue that logistics was booming during and after the pandemic, also stemming from the ecommerce growth spurt. In 2020,  the Deutsche post-DHL claimed earnings rose to an all-time high of EUR 4.8 billion, challenging the notion that all logistics carriers have suffered losses.

Since 70% of America’s freight tonnage is moved by trucks, we take a look at this segment closely.

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What does truck technology entail?

The Truck Tech industry refers to processes such as route planning apps, freight management apps, driving assistance platforms, autonomous trucks, and electric and fuel cell truck technologies. Further segmentation of our coverage includes driving and safety assistance tools; route planning platforms; online freight platforms. We also note that route planning, online freight matching platforms, and Society of Automotive Engineers (SAE) Level 1 autonomous technology are in the commercial stage, whereas autonomous trucks (SAE level 4 and 5) and electric and fuel cell trucks are still at the pre-commercial stages.

Today, we focus on autonomous vehicles and truck technologies related to energy and fuel usage.

See our industry overview for a comprehensive picture of the industry and players within each segment.

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What are some of the issues the truck industry faces?

There are many factors that ‘drive’ the truck technology industry’s growth, but we explore two of the main ones in this post.

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1. Shortage of Truck Drivers

The labor shortage has been one of the biggest reasons to expedite truck technology. The American Trucking Association (ATA), estimated that in 2021, the total number of driver shortages would be a record high of 80,000. If the trend continues, it expects the shortage to exceed 160,000 in 2030, based on population and demographic changes, as well as expected growth for freight needs. The driver shortage is complex as it is a combination of average driver age being high, nearing retirement; disqualified owing to substance abuse issues, as well as pandemic exacerbated ones like less training for drivers and some moving out due to work shortages at the time. Basically, the solution needs to be multifaceted—it’s not a one-size-fits-all.

What this means is that the demand for truck delivery will only exceed but there are too few qualified drivers behind the wheels. One solution is Autonomous (driverless) Trucks. Autonomous Trucks, though not fully commercialized, are prepping to meet these issues. Just within the past week, we saw:

•  Einride aims to bring fully autonomous pods to Dallas-Fort Worth, Texas. Einride is a Swedish tech developer for autonomous and electric trucks, and has announced its plans to bring its autonomous Class 8 trucks dubbed “Pods” to deliver goods in Dallas-Fort Worth, Texas. The company expects to make the deliveries fully autonomously (i.e., without a safety driver).

• Waymo was planning to launch a multi-phased pilot with Uber Freight. Being the autonomous vehicle arm of Google, it has entered into a long-term strategic partnership with Uber Freight, Uber’s online freight matching solution for carriers and shippers, to haul loads between Dallas and Fort Worth, Texas. 

During the first phase of the partnership—expected to happen this year, Waymo will deploy a test fleet of trucks retrofitted with Waymo Driver autonomous software onto the Uber Freight network. Waymo will act as the carrier offering autonomous trucks for shippers on the Uber Freight marketplace.

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2. Need to Decarbonize

In March this year, the US Department of Energy (DOE) stated that improving zero-emission vehicles and fuel technology will make trucks more cost-effective to buy, maintain, as well as navigate compared to diesel-powered vehicles. It boldly claims:

“With continued improvements in vehicle and fuel technologies (in line with US Department of Energy targets and vetted with industry), zero-emission vehicles (ZEVs) can reach total-cost-of-driving parity with conventional diesel vehicles by 2035 for all medium- and heavy-duty (MD/HD) vehicle classes (without incentives).”

It supports the idea that cleaner energy sources ramping up will mean buying a more fuel-efficient heavy-duty truck will be easier within the next decade.

We note and also see the possibilities since hydrogen fuel cell truck manufacturer Nikola Motors has claimed its vehicles can get 12–15 miles per gallon (mpg), well above the average for a diesel truck.

Also this past week alone, we noted:

• Nikola’s BEV got approved for the New York Truck Voucher Incentive Program. Our analysts have tracked and observed that Nikola is also registered in California’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) conducted by the California Air Resources Board (CARB). The company has already secured around 78 orders for its BEVs via the program since registration in January this year. With today’s news, we believe the company might be able to secure more pre-orders from customers in New York as well.

• Walmart is to trial Daimler’s Freightliner eCascadia and Nikola Tre battery-electric trucks. It partnered with automotive manufacturer Daimler Trucks and battery-electric (BEV) and fuel cell electric (FCEV) truck maker Nikola Motor Company to trial their respective “Freightliner eCascadia” and “Nikola Tre” Class 8 BEV trucks. Walmart will deploy the trucks to haul goods from suppliers’ premises to a Walmart consolidation center in Fontana, California later this summer (June–September).

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Conclusion

The new norm has changed the way we live our lives and how we move things in our ecosystem is no exception. The logistics industry is being made more efficient as it rises to fill gaps in human resource issues and the higher demands for delivery. Truck Technology, therefore, is somewhat nascent as seen in various trials and pilots, mostly by incumbents. Based on its expectations and outcomes, there’s a high chance that the trucks poised for the future will be better equipped to deliver and less negatively impactful to the environment.