6 months ago, Tesla’s Elon Musk unveiled the world’s first electric, self-driving truck. This reopened a discussion about how self-driving technology will impact the trucking industry. Some commentators predict a disruption of the trucking labor market, as technology supplants the need for drivers, while others paint a rosier picture, forecasting growth in labor demand in the logistics industry. Today, we are going to take a look at how these innovations will affect White Glove delivery and the last-mile.
The Supply Chain
Although we at Deliveright focus mostly on the last-mile of the heavy goods supply chain, the supply chain has many links besides the last-mile. Typically, heavy goods are shipped from the manufacturer’s plant via a long haul freight carrier to a last-mile hub near the end consumer’s home. From here, a last-mile delivery team will perform the White Glove delivery. Each of these links in the supply chain is subject to automation to varying degrees.
The Self-Driving Solution to Long Haul
So far, self-driving technology is heavily focused on the long haul portion of this journey. The biggest player in this field right now is Uber, through its Advanced Technologies Group (ATG). Uber is developing technology that allows trucks to operate without a human driver over long stretches of highway. These trucks use lidar systems, machines that emit lasers in order to gather data about the trucks’ surroundings. While self-driving trucks are running in Arizona, and one has even delivered 2,000 cases of Budweiser beer within Colorado, the technology is not yet sophisticated enough for a truck to reliably navigate the open roads without a human in the cab, ready to take the wheel at any moment.
Self-Driving Trucks and the Last-Mile
The technology is also not yet able to deal with the stresses of driving on small rural roads or in cities. While self-driving cars can already zip through some of America’s most densely-packed urban areas, trucks have to grapple with a greater set of limitations, stemming from their weight and size. “Many avoidance algorithms for self-driving cars just don’t apply to trucks,” says Eric Berdinis, a product manager at Uber working in its self-driving truck division.
A number of start-ups have developed prototypes for automating parcel delivery to homes, including Amazon with its now infamous plan to deliver packages by flying drones to customers’ home. But no company has devised a way to automate home delivery of heavy goods.
A 2016 McKinsey study identified three developments that are poised to reshape last-mile delivery in the coming years: autonomous ground vehicles with parcel lockers, drones, and bike couriers. None of these solutions address White Glove. Delivery of large items to a consumer’s home still require at least two people to carry and assemble the products.
There have been recent baby steps forward in automating the assembly aspect of White Glove deliveries. Last week, after three years of work, a team from a Singapore university programmed a robot to assemble an IKEA chair in 20 minutes. While this is a sign of progress, there remain many hurdles to bringing this technology to consumers, including expense, transportation of the technology to the customer’s home, the complexity of most White Glove deliveries, not to mention the loss of the personal touch of having an attentive, personable delivery team in your home. Given this, it will likely be a very long time before robots are entering our homes to assemble heavy goods. If ever.
Effects on the Last-Mile Industry
While many observers have intuited that self-driving technology will be bad for people working in the delivery and logistics businesses, a recent study by Uber ATG contends that the opposite is true. Because this technology will lower shipping costs, it could actually increase demand for goods shipped via trucks. And as the demand for goods increases, so too will the demand for long haul truckers to accompany the self-driving trucks on their interstate journeys. The demand for delivery teams handling the last-mile will especially increase, as this is an area that automation has not yet touched. This could lead to a shift in driver employment from undesirable long haul jobs, where drivers are away from their homes for up to 200 days a year, to last-mile jobs, where drivers can be home for dinner every night.
Last month, Uber rolled out its Uber Freight operation in Arizona. In the Uber Freight model, a long haul driver pilots a self-driving truck to what Uber calls a “transfer hub,” located a few miles from the final destination. At the transfer hub, a local driver takes control of the freight and manually drives it to the end location. When this model is operating seamlessly, the long haul and local drivers will essentially switch loads, with the long haul driver shipping the goods picked up by the local driver to a distant transfer hub. Uber anticipates that “every self-driving truck will need partners to cover local routes and bring loads to and from [last-mile] hubs.” Given changing demographics and these shifting economic currents, America will need many more last-mile drivers, and teams to support them, in the coming years.
However we approach this issue, one takeaway is clear: self-driving technology is great for White Glove deliveries, and great for the people working in the White Glove delivery industry. It will reduce the cost of shipping, increasing the demand for heavy goods and triggering a redistribution of logistics employment from the first-mile to the last-mile. And as of today, there is no scalable substitution for human delivery teams in performing White Glove deliveries. There is not even one on the horizon. White Glove deliveries as we know them will be a reality for the foreseeable future.
All of this means that the White Glove delivery operations of the future will need technology that is equipped to meet rising demand and automation in other areas of the supply chain, and that perfectly complements the delivery teams that will continue to deliver goods to customers’ homes. Deliveright offers this solution. Our technology integrates with many other technological platforms and automates as much as it can, while remaining flexible enough to adapt to the needs of the people running the operation on the ground. We are prepared for the future, and if you run your operation on our software, you will be too.