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Robotrucks: Shifting Electronic Logistics to Autopilot Changes the Supply Chain

Otto, the robotrucker, has achieved the ultimate goal. It piloted a semi full of Budweiser beer across Colorado in October. Uber is the proud owner of the Otto Company, which doesn’t bode well for the long-term employment of part-time cabbies they are famous for. However, the real and relatively imminent threat is to the employment of 3.5 million truckers on U.S. roads and their counterparts around the world. In fact, in more than half the states in the U.S., truckers are the largest group in the employment pool and the ripple-forward effect on restaurants and other truck related business raises the at-risk number to eight to ten million people.

Source: Uber

Source: Uber

Robotic, autonomous trucks still need some perfecting, but the reality is that we are just a few years from the capability being solid enough to enter mainstream operations. The Otto retrofit kit is predicted to cost just $30,000 and that makes the ROI truly excellent, with much longer working hours and no human costs offsetting the startup cost and support.

Otto is attacking the market in a radically different way to mainstream truck makers. Daimler, for example, predicts it will take eight or more years before self-driving trucks are on the market, and it’s a safe bet they’ll have more than a $30K premium. However, Daimler is aiming to replace existing trucks and Otto looks to retrofit what’s there. If Otto is right and can come close to that price, uptake of the robot approach will be at least a couple of years earlier and much more rapid.

Irrespective of the truck solution, the logistics chains in almost any distribution segment will be heavily disrupted. Electronics is a good example of a segment ripe for the plucking, but the ripple effect of robot trucks will change everything from assembly to warehousing to endpoint delivery. Simply put, trucking will no longer be the timeline bottleneck or the cost impactor that it is today. Let’s see where this thought leads.

Any logistics chain that has years of stability has fixed and well defined relationships between all the elements in that chain. This determines, for a piece of electronics gear, where the components are made, how they are shipped to an assembly point, how they get to a configuration/fulfillment operation and how they reach the endpoint customer (through distributors, retailers, or directly delivered). Each one of these is going to be impacted by speeding up the trucking function.

Let’s use Amazon as a warehousing/fulfillment operation for our fictional online retail store. Amazon doesn’t want lots of people running things. In fact, robot trucks likely will be unloaded by robot warehousing units. These might take the form of fixed gantries that can remove pallets and send them to a slot in the warehouse, or it might have robo-forklifts doing much the same job. Either way, the receiving facility will change.

The Amazon shipping facility likewise will be robotic. Much of it already is, with many packages picked, labelled and shipped by machines today. Using robots makes for 24/7 operations, so that has to be attractive for a distributor like Amazon. Still, delivery of small packages one at a time doesn’t sit too well with a robot semi model, since each endpoint tends to be unique, but a fleet of small vans could be the answer.  Amazon Web Services (AWS) has played with airborne drones here, but that concept would not survive the first exercise bike dropping through a roof!

The same sorts of issue face electronics manufacturers and distributors. Life is complicated by an elephant in the room, which is that Asia makes much of the electronics sold today.  The pressure for agile logistics is growing and this means, more and more, assembly will move to the consumption end of the chain. The prize of good business growth will go to the most agile players, implying flexible robots as assemblers and a configure-to-order operation as part of the basic assembly process.

Electronics firms will need automated warehousing, coupled with improved forecasting and inventory management. This will tend to favor larger operations over small ones, leading to a consolidation of vendors into an ODM-like model. These vendors can afford the extra robot gear to efficiently interface with robot trucks, aiming for minimum turn-round times and cost savings from higher truck utilization.

Innovation far exceeds robot trucks. Zume pizza has conceived a truck that can cook pizzas as it’s driving along, baking them in one of the 56 onboard ovens on a schedule that means delivery is just-in-time as the truck pulls into your driveway. Multi-truck roadtrains are another idea being tested, where the razor sharp reactions of robots can allow a bunch of trucks to tailgate taking up less road space and slipstreaming for a bit of extra mileage. (A roadtrain may only need one backup human driver for say six trucks today!)

It’s going to take a while to figure out how the Robotic Era is going to shape up, but the start of a roadmap is already on the table. We are in a not if but when mode now and must face up to what will be the most profound societal change since the Industrial Revolution a hundred years ago.

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