The transportation industry is going beyond their traditional role of simply moving freight. It is reinventing itself by creating differentiated products through digital innovation. Today, a truck organization is operating as a high-tech company that centers its business on digital and data. The pace of innovation and disruption is only going to increase, and it will mainly come from zero emission technologies and software. As the automotive market muscles into action, there are four emerging trends that will invigorate, and possibly disrupt, the market in the coming years. Autonomous vehicles, smart connectivity, big data and analytics and electrification are poised to be the game changers.
Autonomous Vehicles: It is a well-known fact that self-driving automobiles have missed many deadlines in the last decade. Fully driverless automobiles are still not widely available and adopted. The purpose of fully autonomous vehicles has been pretty simple – safety, comfort and total cost of ownership. The business case for driverless vehicles in stronger in commercial vehicles space than passenger cars case and it is less “complicated”. One of the biggest cost contributor to the commercial vehicles is that of driver, both from a cost and availability standpoint. There are stringent rules around how many hours the drivers can operate a commercial vehicle at a time. This limits the usage of the truck or bus. If we had fully autonomous trucks, this problem will go away.
The positive results of all the innovation and development that were being tested since decades have finally started to bear fruits. With the safety and cost efficiency they provide, autonomous trucks, could become a norm much before the cars.
There are two distinct strategies around autonomous trucks – End-2-End including last mile and hub-2- hub where last mile is not included. I believe that hub-2-hub has a much better chance of becoming a reality in near future as it is more manageable from technology standpoint and provides maximum return on investment. This basically focuses on providing truly driverless trucks hub-2-hub which are along the highways. Implementing a driverless vehicle technology on highways is much simpler than implementing it in the city limits.
The autonomous truck market is undergoing a transformation and upholds the capability to create a value of more than 100 billion USD in the next decade. The autonomous aka self-driving vehicles are the ultimate technology advancement benchmark – we started with completely manual vehicles, to now partly autonomous and are gliding towards completely self-driven vehicles.
With the production and development of autonomous trucks, the commercial market landscape is bound to change. It is being predictive that logistics companies will offer TaaS – Truck As A Service. Autonomous vehicles thrive on RADAR sensing technology, light detection and ranging (LiDAR) technology and AI that detects a vehicle within 60m radius and enables the vehicle to create an active 3D map of its surroundings.
Connectivity: The biggest reason why smart vehicles are considered better than the conventional ones is connectivity. They are literally data centers on wheels, with always connected paradigm. It equips the driver with possibilities to enhance the driving experience by making it effortless, easy, and highly efficient in preventing road accidents.
It also allows fleet management to minimize costs and risks. At the same time, it improves time efficiency, profit, and productivity. Connectivity aids in optimizing fleet routing, security, and performance. Effective telematics i.e., remote communication technology comprises of a fleet management software system. It reads the vehicle data and enables GPS diagnosis using multiple IoT deployments so that the vehicle can be tracked, monitored, and managed.
The next set of revenue streams for those companies which are in transportation business will come from services provided around the truck and surrounding logistics eco system. These services will be built around connected vehicles which have the ability to send/receive data from/to the vehicle in real time. Organizations who successfully stay connected to end customers and provide them value added services build around data and connectivity will be the ones which emerge as market leaders.
Big Data and Analytics: Every automotive vehicle manufacturer is reinventing itself as vehicle supremacy shifts from horsepower to computing power. In the last few years, digital touchpoints for vehicles have increased multifold, and the pandemic has powered this trend even further.
With IT companies making open-source vehicle architecture platforms, the digital adaptation in the auto industry has been simplified. It has even encouraged automakers to create customized IT software systems as per their needs and wants.
With big data and analytics, vehicle decisions that were earlier considered significant and complex are now made automatically. Vehicles’ data is used for predictive maintenance, creating alerts in case of emergency, and notifying managers about their fleet (fleet tracking). Predictive analysis is being done to forecast future demand and improve logistics.
Extracting value from data is tough – the most important and critical aspect of this paradigm is asking the right question. If we do not ask right question, the value of the data will remain a potential and cannot be actualized.
Electrification: It is no surprise then that the world has been quick to embrace electric vehicles. Increasing concern over fossil fuel pollution and development of EV infrastructure are two major factors that have increased momentum towards EV penetration. Electrified vehicles are becoming more and more viable and competition in the space is only growing. The countries that have stricter emission rules and offer incentives have higher adoption rate, especially for commercial vehicles. Continuous improvement in batteries (latest being fuel cell) and cost effectiveness will lead to greater market share of EVs in the future. Software will play a major role in differentiating oneself from competition as many we simplify the vehicle complexity on the mechanical and electrical side as the innovation focus shifts to software.
Future of mobility
The industry is at an inflection point where truck companies are reinventing their organizations by leveraging digital technologies. They are becoming more of software companies and less of conventional brick-and-mortar companies. The new age mobility driven vehicles are bringing a transformational change and reshaping the way business is done. Logistics fundamentals are being redefined as per the innovations in software to create new business models. The sophisticated tech driven fleet is being nurtured and has been accepted quickly in the market because it is both sustainable and profitable. The entire way in which people and goods covered distance from point A to point B has changed and the industry is evolving further.
Disclaimer
Views expressed above are the author’s own.
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