Commercial vehicle makers from across the globe will join the great and good of the North American fleet market this month at the North American Commercial Vehicles show in Atlanta, Georgia. With the driver fatigue tackling electronic logging device (ELD) mandate coming into full force (essentially enforcing FMS into trucks above 10,000lbs as drivers must stop for 10 hours after 11 hours of driving) at the end of the year, as well as a digital revolution underway in the sector, Susan Beardsley, principal analyst, ABI Research says she expects a raft of new announcements.

“This year is not just about big data itself but actionable and customised insights to improve your business operations,” she says. “SAE level 2 (the second level of vehicle autonomy) is coming in its early stages this year and I would expect a host of announcements from major OEMs and Tier 1 suppliers in Atlanta.

Trade in the US and Canada remains dependent on shipping goods on the endless highways that criss-cross the nations. Despite the presence of massive private and public fleets, most of the drivers using them work for relatively small operations.

“The American Trucking Association states that 91% of fleets operate with six or fewer trucks in the US,” notes Beardsley. “That is, by the way, relatively consistent with a number of other mature countries.”

With regulation changes such as the ELD mandate and 5G steadily rolling out in many areas, fleets are interested than ever to access more cost-effective FMS and telematics solutions.

“So many of the commercial telematics players have been turning their focus to the long-tail small fleets,” she adds. “Software is really moving now from on-premise and high-cost heavy deployment – both in time and money – to more native cloud-based open platforms.”

Change is coming not just in the way those solutions can help a fleet operation but also from technology that is opening up new business opportunities that may not have existed before. And unlike before your truck may come built and ‘pre-loaded’ to make use of them.

“The vehicle OEMs and their partners – tier ones and beyond – are adding FaaS (freight as a service) features and the ability to move from preventative to prognostic maintenance,” says Beardsley adding that even the biggest manufacturers in the global industry are having to partner up to keep pace with this evolution of trucking technology.

“The record-setting venture capital investments, mergers and acquisitions and consolidations point that there really is no success in a go-it-alone strategy,” she remarks.
“However, safety, flexibility and operational excellence are needed across the board to address the constant change from one-day shipping to current economic challenges, regulations and even weather impacts. All of this is key to our fleet owners as they seek out a positive return on investment, profits, driver retention and more.”

The ELD mandate has honed Beardsley’s mind on the challenges that can be created when regulation forces change in an industry. States and fleets are looking at ways of providing smart rest areas for drivers that will ensure they abide by the law.

“We all know the pain point for especially with the ELD mandate in the US, and now coming to Canada, for needing parking (because on the limitations to hours of service for drivers),” she says. “There’s been a lot of interest in the Midwest and a consortia of companies and States with Iowa one of the first to implement a truck park.

She continues: “They’re using a solution from EXsquared that includes multiple technology; hardware and software solutions; including in-ground sensors and video analytics. And that provides drivers with real time parking information: anything from restaurants, rest stops to truck stops, and more.”

While the goal of the ELD Mandate to reduce fatigue of drivers and improve their working conditions at the same time as reducing accidents is laudable, it has created what has been labelled a capacity crunch. Simply put: there are no longer the number of driving hours available to keep freight moving efficiently.

However, technology is once again providing a solution with freight as a service (FaaS) companies like Uber-affiliate Powerloop looking to work with freight brokers to literally pick-up where these drivers have left off and keep loads moving. What was once a drop freight industry, where trucks ran home empty, is now becoming one where the driver is always carrying a load.

“We have different technologies that are providing the vehicle detection and then that data actually goes both to the States and the consortia, as well as third parties, to centralise that processing,” Beardsley remarks. “And then very quickly that data is delivered to the drivers so you can see there are messaging signs across multiple roadways to provide insight into how far away they are and where there are open spaces. This is obviously not a holistic solution, it’s a needed start to a solution and actually something that I’ve spoken with to C-level executives at some of the commercial vehicle OEMs, as well as commercial telematics providers and even some of the start-ups.”

Another parking solution that has caught Beardsley’s eye belongs to one of North America’s biggest truck strop providers.

“There’s tremendous investment going on in Pilot Flying J. They’re taking a peer-to-peer or crowd sourcing approach to improve the driver experience. People can input things for their peers on what is the availability of parking, restrooms, exercise areas, things like that. Going forward, this clearly requires a public-private set of partnerships. I do believe this is going to improve with the advent over greater 5G which will be increasing and really developing all the way from the silicon to the used cases, as we move into what we call vehicle-to-everything, vehicle-to-infrastructure, vehicle-to-vehicle.”

The fleets of North America can arguably be viewed as the largest group of testers for technology that will be widely used across the globe. They are the ones that are dealing with the practicalities of handling all the data and apps that are intended to create greater efficiencies but also confusion for drivers.

“FaaS really addresses freight optimisation especially when capacity is tight but there are a lot of different solutions and applications; whether that’s with the convoys and moving freight as well as some of the 3Pls, like a CH Robinson, for example, are offering these solutions. The challenge is that they are having multiple apps on a driver’s phone. I believe there’s going to be consolidation just as much as we’ve seen growth taking place in the coming years.”

North America is of course home to some of the world’s biggest retailers, including the behemoth that is Amazon which has built its business on providing rapid deliveries to its customers and forced competitors to try and match its unprecedented levels of service. Beardsley says  its move to a one-day delivery model has pressured major shippers like Wal-Mart and Target to keep pace.

“This obviously impacts changes across the supply chain from warehouses, the sizes, the locations, even utilisation of retail outlets as staging sites. Which have knock-on effects, of course, to the fleet and the drivers. This impacts changes in modes. We see more intermodal and really the need to track goods and this creates a lot of interest but also pressure,” argues Beardsley.

“And so how do we address that? We even see some related impacts such as Fed Ex ending its contract with Amazon on the aviation freight side. And we’ll see where things go amongst Amazon, Fed Ex, DHL, etc, so that battle and the competition is really far from over.”

Two concepts that are largely kept apart in the Middle East, Blockchain and cold chain logistics, are coming much closer in the US. Beardsley says that she has seen a lot of interest from fresh food goods and pharma transporters at conferences on the two subjects.

“It’s been interesting to me going to a number of different sites, how there are still not always a connection between the cold chain solutions, like a Thermo King, and the telematics solutions. And this year we have seen this year major retailers like Wal-Mart are requiring their green goods suppliers to get on their blockchain, which in this case is an IBM solution, in order to sell green goods and a lot of that is based on all the food we call
green goods in the US,” she explains.

“By using those blockchains, for example, the retailers can trace all the way back to the farm where it used to take 10 days. They can do it in a matter of seconds which prevents additional illness and risk. But in the cold chain we’ve also seen a lot of returns, especially for dairy, even though it’s not necessarily unsafe, but we see yogurt, ice cream customer returns, for example.

“When you look at high-value or high-risk goods, there’s a lot of change happening and that goes across the chain. Everything from maritime and rail to trucking.”
WABCO, which is being acquired by ZF, is focussing on that at a trailer level. I see that really expanding exponentially over the next five years or so as some solutions are becoming much more granular,” she adds. “They’re moving to the palette level in some plans; going all the way to the SKU level.”

It is impossible to talk about trends in the truck industry without talking about electric vehicles. Despite delays and the continuing fight greater range and battery charging capacities, Beardsley is enthusiastic that the technology will become more viable for fleets.

“The momentum is, in theory, specific use cases. Many of these, based on current times, are both municipal and or last-mile delivery. So, we see, for example, buses,” she says noting the progress being made on the all-important batteries.

“Two of the largest battery developer OEMs are China-based: BYZ which has tripled, I believe, their manufacturing capacity in California and Proterra which was started by a former Tesla exec. So, if you look at municipal wins those are becoming a really big deal, not only because of carbon emissions, but also because the RoI and even the initial cost and lifetime costs are becoming much closer in parity to some of the other vehicles. So
that’s become a very interesting for the last mile delivery man.

“If you look at the currently available battery technology, and I’ve spent a decent amount of time looking at it across different manufacturers, it really takes up too much space in the trailer and it adds too much weight for really too little of range for any of the long haul or even regional use cases. So, in addition to that, the charging infrastructure for commercial use is going to take a tremendous amount of capital investment possibly both private and public. Ultimately it’s going to need to address, over the coming decades, a potential pressure on the grid to allow more ubiquitous adoption.”

Beardsley is particularly animated by the use of electric vehicles in waste management. It may not seem terribly exciting, she says, but, “this is a perfect example where you can charge at night, it has sharp, shorter routes, and those routes are highly defined. You don’t even need dynamic routing capabilities. And so we see a tremendous amount of penetration for electric battery-powered vehicles. They’re quieter, they are not as carbon intensive and, like I said, they are very popular with different municipalities.”

Despite her enthusiasm she remains only cautiously optimistic for its commercial vehicles use over the next decade.

“You don’t even see anything terribly notable for your battery electric vehicles out the total registered vehicles until the mid-2020s. You’re not surpassing even 10% in the next 10 years and that goes back to battery technology,” she says. “If the regulatory environment changes and the battery technology, as well as infrastructure investment, change, then…. Obviously, I’m going to continue to keep an eye on this and address this on an ongoing basis.

“Even on the consumer side, as of two years ago, the only state that had even 5% penetration of battery electric vehicles was California. There are parts of Southern California with the South Coast basins that provide a significant amount of incentives and work on the fleet side, including coming out of the ports. But no other States are even beyond 2% as of the last two years. This “is absolutely a long-term play outside of these key use cases that I’ve identified. Battery technology improvement is largely now in the lab.”

Beardsley is less enthusiastic for the short- and medium- term prospects for autonomous vehicles although she says Daimler’s decision to focus on driverless technology rather than platooning is significant.

“Platooning is getting mixed reviews based on less-than-expected fuel savings. So Daimler is an example of someone that’s moving their investments over to autonomous development and away from platoon,” she says.

“That said, there is no expectation of removing drivers from the cab in the foreseeable future especially for in-town driving. So, the first SAE (Society of Engineers) Level 2 vehicle is coming later this year from industry leader Daimler Trucks for the freight line Cascadia. So that means the truck is capable of both lateral steering and longitudal, or acceleration or deacceleration, control not driverless. So the company is funding work recently on S.A.E Level 4, which is highly automated, but they really anticipate that within a decade. But even that development requires a lot of regulatory and on-road testing. It doesn’t really say whether that would be more of a ubiquitous on-road development.”

Among other trends that could have an impact she lists the rolling out of 5G as a major factor: “5G is still in the very nascent stages especially for this industry but some of the urban and suburban areas will begin to be able to add devices in the coming three to five years or less. There are going to be user cases that we aren’t even aware of now that will begin to leverage widespread 5G.”

She also adds: “AR, including smart classes, is beginning to make some inroads especially for things like maintenance training. We know there’s a shortage of skilled maintenance technicians and we know as vehicles become more complex that diagnostics are becoming more and more important especially on the software side.”

“Transformation is not binary. It will largely be iterative in the near future but exponential over the next decade. Many of us, can recall buying software in boxes and life before the iPhone and apps. So this is no exception as we move up the technology roadmap.

“Electrification is already here for municipal and last mile and there will also be table stakes for upcoming autonomy. Many new form factors are also developing beyond traditional vehicles to service the last mile and even last yard – from pods to robotics and drones.”

Sarah Beardsley was talking to a Fleet Owner webcast. You can link to their site here