Article | October 13, 2017

The Brave New World Of Autonomous Transportation

Autonomous Transportation

The mere mention of autonomous transportation still evokes images from sci-fi movies for some people. However, the reality is that this concept is not pie-in-the-sky talk — it’s really here. And it won’t be long before it’s mainstream. In fact, PwC’s 2017 Commercial Transportation Trends report revealed that 2016 was a breakout year for new technologies in the commercial transport industry, even while many companies still resisted them. Although information systems have been disrupting carrier operations and logistics for years with mapping, GPS and other driving technologies that help companies respond more quickly to customer shipment demands, autonomous transportation is taking things several steps further.

Here are just a small sample of the commercial autonomous transportation advancements we’re seeing right now:

  • In early December 2016, Amazon announced Prime Air, a new program that delivers packages via drone to shoppers within 30 minutes of order placement. 

  • Otto, a division of Uber, made its first driverless voyage last October, delivering 50,000 cans of beer via a self-driving vehicle going from Fort Collins to Colorado Springs, Colorado (146 miles).

  • Local Motors embedded IBM’s Watson Internet of Things (IoT) for Automotive into a driverless shuttle bus manufactured by 3D printers. Olli, as the bus is called, boarded its first passengers on the streets of a shopping district just outside Washington, D.C. Local Motors plans to produce commercial cargo vehicles based on this design in the near future.

Blockchain will Play a Key Role in Autonomous Transportation’s Future

While autonomous vehicles are intriguing, so is the software that runs the vehicles and adds value to the supply chain. Convoy, for instance, is a one-year-old company whose software matches deliveries coming into an area with the availability of tractor-trailers from smaller local providers to maximize scheduling efficiency and minimize shipment downtime. It made news after signing a deal with Unilever to handle a large portion of the consumer goods conglomerate’s logistics in North America.

Another key technology, blockchain, is making an impact on autonomous transportation. Silicon Valley startup Skuchain, for instance, created a transportation supply chain application using blockchain, which is the same technology behind bitcoin. Blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data. By design, blockchains are inherently resistant to modification of the data, which makes it a secure platform for direct business-to-business activities.

Implemented in the commercial transportation arena, this technology could foster more seamless and transparent communications and interactivity between carriers and shippers, possibly cutting out distributors and other intermediaries, which add cost for customers.

Analysts are also predicting that established carriers will embrace blockchain to reduce transaction complexity and enhance their brand with customers.

Get Ready for Cloud-Based Transportation Services

An even bigger disruptive force is on the horizon: the rise of free-floating, contractual services, the shipping versions of an e-marketplace. The operators will be cloud-based platforms that coordinate entire routes for shipments by choosing among carriers, hubs, depots, and warehouses to find the most efficient use of capacity. In this environment, the owner of a single truck can compete head-to-head with companies owning hundreds of vehicles.

While there’s certainly a “neat” factor to autonomous transportation, it’s sobering to consider how it’s creating a massive disruption in the commercial transportation industry. At the same time, PwC’s research finds that only 28 percent of the industry can claim a high level of digitization today, which suggests much reluctance among carriers to fully embrace new technologies and business models.

The fact is, autonomous mobile robots and vehicles are becoming an important part of savvy companies’ supply chain and logistics strategies — inside and outside of the distribution center. Turning a blind eye to progress rarely ends well. Companies that continue putting off technology upgrades and preparing for the coming changes will be the ones struggling to stay in business when their forward-thinking competitors who are taking a proactive approach start seeing big returns on their investments.

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