Locomotion Video Transcript
Alan Adler
Welcome back to The Future of Freight, this is Alan Adler. I am the Detroit Bureau Chief for Freight Waves and I’m joined by Finch Fulton, the Vice President of Policy and Strategy at Locomation. Finch has a background in the government with nearly four years as the Deputy Assistant Secretary of Transportation policy for the Department of Transportation. He joined Locomotion earlier this year and is working on the strategy side as well as helping set policy for Locomation’s attempts in autonomous trucking. Finch, it’s great to have you. We’ve been together recently on another thing something like this so we sort of know each other, but I wanted to kind of start and jump right in to something that you’ve kind of indicated is pretty important and that is the supply chain crisis. It’s exposed many vulnerabilities in recent months. One of those is the driver shortage which is now pegged at about 80 000 drivers short, the population is aging, there’s other pressures like the drug and alcohol clearinghouse that are reducing the number of drivers. But pay is a really big issue affecting both recruitment and retention. You have some pretty strong feelings in that, what’s your thinking?
Finch Fulton
Yeah well obviously pay is a big impact if you look at the average large trucking fleet the average turnover in a year is above 92 percent and of that involuntary turnover where the truck driver wishes they could keep their job that’s at 20 to 30 percent of that total. So if you look at the factors you mentioned things like drug and alcohol clearing house but also the most common stress the most common reason people leave otherwise is financial. Two-thirds of drivers say they don’t have enough savings to cover upcoming expenses and a big part of this pay shortfall is the unpaid time for drivers. As you know and as we’ve talked about drivers are typically paid by the mile but when they’re stuck waiting for a load or in detention time they’re not getting paid, they’re not spinning the wheels and generating revenue. So there’s not a lot of great stats on this. We’ve seen that the Department of Transportation’s Office of Inspector General has tried to take a look at this ATA, though the trucking research institute is taking a look at that, OIDA is taking a look at this. Best guesses are that it’s costing them three percent annually in pay but it can be up to 20 hours a week that they’re just stuck in detention time not getting paid. So it’s a significant issue for these truck drivers and I think it’s having real impacts on our supply chain.
Alan Adler
Let’s talk a little bit more about detention. It’s in some ways it’s unavoidable but it’s also sort of a corollary really to inefficiency. Either at the shipper really the truck driver is just sort of I don’t like the term victim but it’s sort of a victim here not the cause of the problem basically and you know some of these facilities really don’t even provide you know good way-station type equipment or or mobility [bathrooms] that’s what’s gonna say i was getting at that. I mean you know there’s not, never mind the snack machine, there’s nowhere to go to the restroom. So I guess the question then is attention is a bigger issue really than just the pay right i mean you know there are bigger issues there.
Finch Fulton
Yeah well and this is something that I should note is a bipartisan issue that’s being studied. It’s something that FMCSA has studied before. They have another planned study and Congress is urging them on. You’ll see I don’t know what’s going to happen with this Infrastructure Bill but there is another requirement for the FMCSA to work with their partners to study this but FMCC doesn’t need to be told to do anything. One of the things we saw in Deputy Administrator Mira Yoshi’s confirmation hearing to become the Administrator, she flagged that really you have to create incentives for the shippers. You know if they aren’t, if they don’t have to deal with the fact that they keep drivers waiting for hours on end, they have no incentive to move faster and to help them get their loads to move forward. So they’re looking at how you might shift more of a pay by the hour model that brings on, including shippers in the additional pay for truck drivers to pay them for this downtime. And we’ve seen different pushes for this either with the department of labor and their interpretations of the law with how the department of transportation can look at this. They can make changes, you know soon definitely in the first term but if you look at what deputy administrator Yoshi did when she was in New York City. She was in charge of the pay of drivers, for taxi drivers and like and there were 80 000 truck drivers, sorry 80 000 drivers in New York City when she led the administrative body that was in charge of them. And what she did is, she did a lot of studies, getting voluntary information from these drivers about their pay and their time on the road and she couldn’t set a minimum wage for them because they’re independent contractors much like truckers today. But she found a way to go by the mile and by the minute as she said to be able to pay them the equivalent of a minimum wage in New York and so she was able to pull some of these data collection efforts together with the administrative authority she had in that role and was able to change the way drivers were paid in New York. I foresee this happening in the first term for truck drivers whether it’s with a partnership with the Department of Labor or just straight up from FMCSA. I expect there to be significant changes in the way truck drivers are paid, more a by the hour approach that we’ll see in the near future.
Alan Adler
So that means – if I’m hearing you correctly – that means the shippers can continue to behave badly; they’ll just be paying for it.
Finch Fulton
Well it’s not bad behavior if you are paying for it and valuing people’s time.
Alan Adler
Yeah okay, fair enough. Let me ask you, the Locomation level-four autonomous convoys make high economy the underlying engine of twin trucks. The approach is unique compared to some of the startups that are focusing on single truck and trailer operating without a driver. Both use some form of mapping and route ID. How well do you see these existing Finch?
Finch Fulton
Yeah well, I mean frankly, I see Locomation’s approach being out on the road, legally, safely, conducting routine operations for revenue at scale years before anyone else is going to be able to do it because we have a human-led human-centric approach. We are still developing autonomous trucks that can operate by themselves. But I think there’s always going to be a world where on some routes, with some cargo, for some customers you’re going to want a human present and in the loop. So I think these approaches will coexist and again if you look at the linked two truck human-led convoy you’re bringing in things like additional fuel efficiencies, you’re bringing in things like generating twice the revenue per driver, you’re able to change the way this works, and then get some of those increased fuel efficiencies which reduces emissions and increases the profitability of the operation. So there’s no reason why you would cut that off just because additional technology becomes available because that technology doesn’t do all the same things and doesn’t incorporate the human in the same way and there’s a lot of things that humans can do better than machines and that’s going to be true for a long time to come. Humans are pretty clever if you get down to it.
Alan Adler
Well you start out with two trucks, two drivers and ultimately go to two trucks, one driver. I mean that’s kind of the way it works. You know we have a driver shortage, we’ve talked about the front of this discussion. You’re going to staff with two drivers to get started, are you going to have trouble finding the drivers and things like that to do that?
Finch Fulton
Well I don’t think so, because if you look at the way the system operates drivers are able to generate twice as much revenue with their truck as they are today. So if you’re looking at the downtime that drivers have. As you know drivers are allowed to drive for 11 hours a day, they’re allowed to work for 14 hours a day, and then they have to rest for 10 hours a day. So the amount of time a driver spends in their vehicle not making money is dramatically increased. If you can have them be able to get that rest while the vehicle is moving and generating revenue. And delivering those loads suddenly changes the way this entire system works and you’re able to squeeze out a lot more efficiency and a lot more uptime from your vehicles. You’re able to get more for every mile. So it changes the way the system operates. I think that there’s going to be room for this approach for a long time because of that and it has dramatic impacts to drivers quality of life, to their pay you know it gets them home if you organize it right on the back end which we intend to do they can get home every night, and so some of the other issues that impact driver turnover, you know regardless of pay are those quality of life issues and if you start to take care of those things you’ll slow down that turnover and hopefully reverse it so that drivers go after these jobs and will actively seek out carriers and partners that incorporate this technology because they know it makes their life better. It makes them safer and it improves their quality of life overall. That’s what we’re working towards and I think we have to prove it. And I think we are going to be proving it over the course of the next year. Leading into our first deployments
Alan Adler
This suggests that you’ll be on routes rather than sort of a long haul type thing. I know you’ve identified, you know certain routes that are sort of more dense in terms of freight and things like that. And Wilson Logistics, which is one of your customers, is already working on identifying which of their routes makes the most sense and that sort of thing. So really we’re talking kind of a middle mile type approach right? I mean as far as getting these guys home because you know if I’ve got two trucks out there and you know, I get to the end and then I come back, then yeah I’m home right. If I’m doing what, 250 miles or 500 miles a day right?
Finch Fulton
1000 miles a day essentially. Yeah I mean you’re right it takes some of the back end organization to make it happen. I mean that’s a key part of it but as you look at 100% of Wilson’s Routes. Let’s say 80# of them or those routine routes a day. That’s where the focus is and it is middle mile in that sense to where you don’t have to solve every route every day but also because you have humans as part of the mix you’re not limited to your final destination point you can get off the freeway off the interstate in the human driver’s drive to the warehouse or to the delivery point that they’re talking about they don’t have to stop at an intermediary hub the way some other models are being worked out. Because the drivers just take over the same way they do today. So I wouldn’t call it middle mile but I would say you focus on those high volume routes and that network the 88 percent of the freight that goes on America’s freeways. That’s what you can capture because again looking at federal highways statistics 88% of the cargo is on these massive freight routes and so if you look at that that 88 percent if you focus on that and capture that that’s where you get those efficiencies and that’s where you can make those changes.
Alan Adler
Right right, I want to switch up on you a little bit here although something you’re quite familiar with. You’ve actually written on it and that’s this regulation, it’s a big part of advancing autonomous trucking to commercialization. You’ve created a chart of milestones to get there. Can you walk us through those?
Finch Fulton
Sure and I like that you asked me to bring this back. That means you liked it the first time I talked about it. Because we talked about this last time we got together. [I just have to learn twice] So today it’s well established that the driver of a commercial motor vehicle can be a human or a machine right. However there are areas in commercial trucking that explicitly require a human. Things like how to conduct an inspection, maintenance, repair, especially unexpected repairs, as well as being able to interact with law enforcement, and to be able to handle all the duties they have. So the FMCSA rulemaking that we’re talking about up on the screen. But the one relevant to automated trucks is key that would prevent other companies from removing their drivers. So this rulemaking either needs to pass or everyone else has to come to agreement on alternative means of compliance. How do you achieve the things that the rules require, that the requisite rules explicitly say a human have to do while still being able to remove your driver from the vehicle. So that rulemaking was supposed to come out this month. It hasn’t and it doesn’t sound like it’s anywhere close to coming out and what you know what you see often is if everyone knows how to answer a rule and what the end result is going to be and everyone agrees on it. It takes about a year to a year and a half for it to work through this whole regulatory process. Not everyone agrees on everything and groups like organized labor, and even the owners and independent operators groups are against it. Because they’re worried about what it means for them. Now no truck driver today should worry about losing their job but the fact is they aren’t on the sideline they’re opposing this. So it’s a big question as to whether or not FMCSA is going to move forward with this rulemaking that they’ve indicated that they will and they’ve said the right things about but certainly people are worried about whether or not they will move forward with this rulemaking and get it done in the first term of this administration.
Alan Adler
I’m sorry, on the FMCSA one, which is the first one on your chart, and the one that probably has to kick off everything else really in a way. There are alternatives, I think you’re part of the self-driving group, Locomation is, and I understand there’s a good bit of collaborative work going on. For example, let’s take something like triangles. You know that they have to be put out in the case of a truck. There are other ways to get at this, you know maybe that’s a little bit of an archaic, arcane sort of approach. It goes back decades, right? You know, maybe you have something digital on the truck that is maybe even in the shape of a triangle that shows that you know that you have a truck in distress or something like that. I mean you all can begin working on those things now. You don’t need to wait for an NPRM to do that.
Finch Fulton
No certainly not, and that’s what I was talking about with alternative means of compliance. So we are a member of CVSA, the Commercial Vehicle Safety Association and they’re leading the effort. They’re who FMCSA looks towards on these sort of items and so you’re talking about a regulation that’s so old they measure in paces the distance between the back of the truck and where you have to put these triangles. So there’s been all sorts of ideas for how you can do it everything from sort of remote control car that can go out and drop them, to you know hiring Ubers or AAA to go out and when they get a signal that the truck is down somebody has to go drive out there and just put the cones down or put the triangles down behind it. There’s been some other ways that people have been thinking about some sort of visual indicator on the truck but so far those aren’t ready and also there is a limitation of what the law, what the regulation actually says. And so you are limited to the confines of what is written down and what is law today. Until they update that you have to comply with that and the limitation there is there are some things that will make more sense that are common sensical that would be a that would be achievable if you updated the regulation, but right now we’re limited to the confines of the law that never intended to be in this situation, and so the groups are getting very creative with trying to figure out how to solve this problem. They don’t have the answers yet. We don’t have the answers yet but there’s a lot of effort around it.
Alan Adler
Yeah, then take us through the other four real quickly just click through the nets and the different things would you?
Finch Fulton
Absolutely, so the two of the ninja ones are pretty important. You’ve got the one around safety. The safety framework and this is one that we started back when I was at DOT. This is how you take all these industry developed consensus-based standards stack them on each other to prove safety and improve the safety of the operations and to be able to test yourself. Did you think of this sort of challenge and that proved that you thought of it and mitigated it. It’s both an engineering spec and a process approach. And so bringing this together and putting it in a rule making. This will be the first time that the Federal Government that the National Highway Traffic Safety Administration has regulated the operation of a vehicle. Not just standards for what a new vehicle has to achieve just with equipment.
So that one is going to be probably the biggest most important rule for the future of automated vehicles as a whole that we’re going to see and it’s you know going to move along slowly but it’ll probably be done in the next we’re looking at five to eight years for that rulemaking to get done.
The other next to rulemaking is just about the standards that exist. How to make some of those additional tweaks and updates to them to be able to accommodate automated vehicles because it was probably too prescriptive in the past and so it’s to update it to make it more performance-based so that it can incorporate new technologies more easily while still proving safety.
The one on the bottom of the chart that I think you’re looking at talks about telltales and indicators, and this is some of the things where we’re talking about with how do you indicate, you know the status of a vehicle, what its intent is, how do you make sure that the people around it understand what a vehicle is going to do before it does it so they can be ready for it.
And then, there’s one on automatic emergency braking that’s just relevant for trucking companies. You need to know that that’s going to be a requirement in the future. But the last one is actually interesting because it’s around emissions. So it’s an EPA NITSA rule, and as you know, by law fuel standards go up every few years, so we see that we already have a standard set for 2027 for commercial motor vehicles. Those are going to be very, very difficult to accomplish with today’s technology. You pretty much have to bring in new technology to be able to accomplish that and the rules that are going to be set for 2030. The notice of proposed will make is going to come out this April and i do think that will be on time and that’s where we’re going to start seeing to where to get those future standards you have no choice but to bring on new technologies, new approaches, and to figure out a new way to do things because you can’t get there with today’s technology at all. No question about it so you have to focus on these things and shape these things and make sure that you’re giving your input to them because these will be the things that shape the future of trucking and the future of the industry and the going forward if you’re not planning for them now and if you’re not adopting these technologies and thinking through them you’re going to be left out in the future and you’re going to be behind. And you’ll probably be paying your competition for fuel credits and so you’ll be really really upset at yourselves for not thinking proactively about these things. It will cost you.
Alan Adler
Let’s just take that to the power trade because I’m sure that’s really where the savings come. We’re talking electric power trains perhaps, you know hydrogen power things like that, I don’t know how much appetite especially in California there is for hybrids and so forth or natural gas, even RNG is you know promising but not necessarily proven. I guess the the question I have then is. Will this rulemaking line up with the timing for autonomous trucks or will it trail, will it perhaps lead? I mean, you know you said five to eight years on the NITSA stuff is that sort of in sync with where autonomy is going?
Finch Fulton
So it’s interesting because we talked about, people often talk about their concerns with a patchwork approach from the states. So every current autonomous vehicle maker has to comply with federal standards but those focus on the vehicle’s capabilities itself not necessarily how the vehicle operates. As you know states have always regulated how the driver operates because the driver has always been a human. And so it’s a new approach to it, and states of course are weighing in on the operations of automated vehicles whether it be light duty or commercial motor vehicles. And this is okay this is a feature of the American system it’s not a bug it’s okay for California to have a different level of comfort than Texas they can use this to think through how to embrace innovation how to bring it into their systems and ultimately it’s a benchmark of the American system that in places that are more comfortable with technology that want to embrace it they can they can encourage it and bring it in and those that want to wait can. You don’t always have to have a top-down you know federal approach we come in and say no these are the rules you get no choice. You can let innovation percolate up from the states, have different states try out different approaches, different levels of embracing the technology, different pilots, different opportunities. This is okay so obviously we’re going to be looking to deploy in California, we’re going to be looking to deploy you know Washington State and the midwest depending on who our next customers are it sounds like we’ll be deploying in a lot more geographic areas including Texas. So we have to look at all of these standards and ultimately we have to be able to prove safety to the hardest standard out there and the fact that we’re already aligning with what NITSA is thinking about doing in the future and the highest levels that California could ask. Means that it doesn’t matter what state we’re going to deploy in once we prove that and prove the highest levels of safety and show how we’ve done it and be able to communicate it to everyone. That should open the door for us to be able to operate in all 50 states. Those that are concerned about a patchwork approach are probably not taking the highest levels or probably not taking it seriously enough. You should be fine with hitting these high standards for safety if you’re doing all the right things.
Alan Adler
But isn’t it and I’m going to leave it here because we’re out of time, but isn’t it really a question with California that just as it has with admissions it’s going to basically continue to push for electrification connected to autonomy rather than separate from it? And I don’t have much time here but please give me your thought on that.
Finch Fulton
So you should keep the different use cases apart. Obviously you have to have a foundation on things like safety. But I’ve seen studies that show that it’s not going to be economically viable for commercial motor vehicles to be electrified in the way people want them to be until closer to 2030. That’s part of some of the things I’ve seen out of the 21st Century Truck Partnership Program that the Department of Energy leads as these technologies come on board you need to figure out ways to embrace them. But if you try and mandate a technology before it’s ready, enforce it, it can have unintended consequences and ultimately people can reject it. We’ve seen this with other areas we’ve seen this with airbags they tried to preemptively mandate it and people got hurt because they weren’t ready yet and so it delayed the integration of airbags into the light duty fleets for years costing thousands and thousands of lives because they were over eager and didn’t work alongside the pace of innovation. Those that want to mandate an electric vehicle future need to just think about the incentives and a pool approach instead of a push approach because if you force it before it’s ready it’ll collapse. So it’s just about partnership and collaboration.
Alan Adler
On that Finch, youryour your passion comes through on all of these subjects really, really appreciate having you here today with us as part of the Future Freight Thanks very much yeah.
Finch Fulton
Thank you very much for having me, I i enjoyed it