Forget Driverless Cars... Here Come the Trucks!

Two firms plan to roll out fleets of fully autonomous trucks this year, setting the stage for rewiring the world's supply chains. 

self driving truck

While the move to driverless cars seems to have hit the pause button, two major companies are planning to put fully autonomous big rigs on highways by the end of the year and have thousands on U.S. roads not too many years after.

That will create lots of nuances for insurers to navigate as the responsibility for accidents shifts from drivers and fleet owners to the developers and operators of the AI managing the semis. You can get a peek into the complexities in store by looking at the lawsuits Tesla has faced over whether its Full Self-Driving AI or the driver is responsible for accidents, including ones that have injured or even killed people. Other sorts of issues will crop up, too, likely including theft, given that there will no longer be a person minding the truck and its contents en route. 

And those are just the beginning of the effects that autonomous trucks will have as they rewire the world's supply chains. Trucks already transport some 12 billion tons of freight every year just in the U.S., according to the American Trucking Associations, and autonomous trucks will carry far more freight, and faster. At the moment, truck drivers are only allowed to operate their big rigs 11 hours a day in the U.S., but autonomous vehicles never get tired and never have to stop, except to refuel. Multi-day trips will take less than half the time they do now. So trucks will absorb business from other modes of transportation, especially planes. The trucking industry says it has a shortage of about 80,000 drivers in the U.S. No more. Not once autonomous trucks really get going. 

Truck stops will change--we'll need more people to pump gas for these driverless trucks... but won't need so many showers or so much coffee. Warehouses will be relocated and managed differently, given that the speed of shipping will rise while the costs drop. Traffic patterns will change as many more trucks pile onto roads. (I can hardly wait to see how much worse I5 can get, and I'm sure you have your pet peeves, too.) Lots of truck driver jobs will disappear, in time, but there will be new sorts of jobs, too, especially for people who keep track of the trucks en route and who maintain them--causing a sea change in workers' comp.

And those are just the changes that pop to mind. Many more that I don't currently envision will come to pass, too, many with big implications for insurers. We're just getting started.

I realize that many people, sometimes including me, have written enthusiastically for years about the prospects for driverless cars and that they haven't exactly rewritten the rules of transportation just yet. The technology actually works incredibly well -- in a world without unpredictable human drivers and pedestrians. But AVs have to fit into that world, and, when they mess up, as they sometimes do, their errors draw a laser focus that crashes involving two human drivers almost never do. 

By some measures, AVs are already safer than most human drivers are, but they are going to have to win the public over as robotaxi services in a few cities, then more cities, then just about every city before we can even start talking about having private ownership of AVs, which is the true mass market and which is where all the rules of transportation and insurance will change.

Driverless big rigs will likely face even more regulatory hurdles than driverless cars do. As an article in the Washington Post notes, there is currently a patchwork of auto regulation state-by-state and little regulation of autonomous vehicles at the federal level. (That will sound familiar to insurers.) AV makers have freedom to operate in any state that doesn't expressly forbid them -- but interstate trucking is heavily regulated, and 35,000-pound tractor-trailers are much more potentially destructive than cars, so states, and likely the federal government, will surely get involved as the AV truck trend gains momentum. 

You never know what regulators will decide. And any mistakes, especially early on, could lead to restrictions on an AV company or even the cancellation of their right to operate; as happened to Cruise in San Francisco when one of its robotaxis dragged a pedestrian 20 feet after a freak accident.  

And yet... trucks operating on highways and freeways are in many ways a better fit than passenger vehicles operating in cities. Cities pose all sorts of complications -- traffic lights, pedestrians (including jaywalkers), double parking, construction and more -- while trucks on open roads face far, far fewer complications. 

There is also a much stronger economic argument for driverless trucks. Driverless robotaxis will eventually become somewhat less expensive than Ubers and Lyfts because a human driver won't need to be paid, but driverless trucks aren't just saving on the driver. They are keeping the trucks moving at all hours, so you won't have an expensive tractor-trailer and all that freight sitting by the side of the road for 13 hours a day on long hauls. 

In addition, the two companies that say they'll roll out fully autonomous big rigs this year are taking a measured approach, unlike some of the autonomous car companies. Elon Musk has repeatedly promised since 2016 that full autonomy for Teslas was just around the corner, only to repeatedly backtrack and lose credibility. Cruise, in what now looks like a show of hubris, decided to tackle San Francisco as its first market for robotaxis. The General Motors unit figured that showing it could handle the steep hills and winding, narrow streets would convince the world that the company's AVs could operate anywhere. Uber made the same sort of bet when it centered its AV operations in Pittsburgh, before ending the program in 2020. 

By contrast, Aurora Innovation and Kodiak Robotics have been testing their truck AI in Texas, where the freeways are in better shape than the roads in old cities and the weather is better. Aurora has been making about 100 deliveries a week for FedEx, Uber Freight and others. According to the Washington Post article, "By the end of this year, Aurora says it plans to have about 20 fully autonomous trucks working the 240-mile stretch between Dallas and Houston. Eventually, it plans to operate thousands of trucks all across America. Kodiak Robotics... similarly plans to launch a fleet of trucks by the end of the year in Texas." 

Since the early days of AVs, many pundits have said autonomous trucks could be the first big use of the technology, ahead of cars. The pundits have sometimes waffled as the technology has taken its twists and turns, and it's still not clear where the commercial breakout will first occur. While Cruise has lost its right to operate robotaxis in San Francisco for now, GM is still investing heavily in the business, so it will be back. Meanwhile, Waymo continues to operate fully autonomous vehicles in San Francisco, recently began service in Los Angeles and says it will open for business in Austin this year. Waymo also keeps expanding in Phoenix, its oldest area of service: The autonomous ride-hailing service now covers 225 square miles, and in January Waymo began taking passengers on highways for the first time. In other words, progress on self-driving cars has hardly stopped, even though the bad press about Cruise might suggest otherwise.

Whenever autonomous trucking kicks in, expect the implications to be profound. The Washington Post quotes Steve Viscelli, a sociologist at the University of Pennsylvania who studies the trucking industry, as saying autonomous trucking could 'change the geography of our economy in the way that railroads and shipping did.'”