Threat of Autonomous Trucking

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July 15, 2024

by a searcher from Princeton University in Livingston, NJ 07039, USA

I have been looking at a couple trucking companies and with every industry the question is will their be an innovation that will destroy the business I just bought. You do not want to own the best buggy whip manufacturer.

Has anyone looked into autonomous driving and the threat to the trucking industry. Many of these small trucking companies are basically temp agencies filling demand while managing the human element. Autonomous trucking is a clear threat and while that may be many years in the future, we are buying these with 10 year debt. You do not want to end up holding the bag on a fully paid off business.

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Reply by a searcher
from The University of Chicago in Nashville, TN, USA
Before getting into searching I had run Transportation departments and worked with major providers to look ahead at autonomous trucking and I would have no concern buying a trucking company because of it. The risks associated with sector cyclicality, driver availability, insurance and litigation would be order of magnitudes more concerning for me.

There will be applications for it's use but for the foreseeable future I expect it will be limited to non-hazardous shipments that have a secure arrival and departure facility with labor onsite. I would expect it to primarily be for intracompany shipments between distribution centers with companies like Fedex or Walmart. Beyond this there will likely be scenarios that drivers can come off the clock from a DOT perspective while the truck continues to drive in remote areas effectively turning them into team drivers. Local and regional delivery will continue to be dominated by humans because of the labor requirements at delivery points.

If you are concerned you could avoid OTR long-haul companies that focus on dock-to-dock shipments and focus on specialty (bulk, flatbed or HAZ) or local household or commercial end-customer deliveries.

Feel free to reach out if you would like to discuss.
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Reply by a searcher
from Northwestern University in Dallas, TX, USA
While at Bain & Co, I did a project for a mega-PE fund on the potential impacts of both EV and Autonomous on the heavy duty trucking industry. This was about 5 years ago. We were specifically looking at the impact on the installed base of ICE engines, trucking labor, and parts/service. 5 years ago we said in the MOST aggressive scenarios we were###-###-#### years away from seeing ANY measurable impact. And even then it was on specific use cases and routes (port drayage, hub city point to point, etc). The technological challenge of autonomously driving (and stopping!) weighing 85k lbs (class 8 trucks) is much different than the challenge of something weighing 3-5k lbs (pac cars and trucks).

I don't have updated data, and don't stay super close to it anymore, but I can't imagine that this is an issue you'll address before you retire.
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