Even Before Autonomous Trucks, Fleets Can Double Their Capacity
By Tom Kroswek, Vice President, Strategy & Business Development
In a previous post, I overviewed how the Autonomous Relay NetworkSM can help carriers and shippers optimize their trucking service for autonomy.
Now I want to explain more about how Locomation works with trucking companies to re-engineer their operating models to generate significant efficiency gains, reduce operating costs 5 to 7%, and establish a sustainability roadmap before autonomous trucks are deployed.
Yes, you read that right. Depending on your mix of freight, one-third to one-half of your business can be optimized today to make you more efficient, generate higher profits, and eliminate CO2 emissions.
And in light of the current supply-chain crisis and driver shortage, this is not just an individual carrier problem but an industry challenge. It affects at least 40% of the supply chain by underutilizing current assets, with trucking companies forced to overcompensate by pumping in more assets without a cohesive plan.
We start with the premise that 500 miles is the maximum length of daily driving a single driver can realistically do given Hours of Service rules.
They pick up their load, drive for about 500 miles, and then have to rest. If the trip is less than 500 miles, most likely the driver is able to complete the pickup, run the linehaul, and deliver within 11 hours driving and 14 hours overall; if not they continue the cycle of driving and resting until the trip is complete. Unless another driver is available to drive, the truck sits idle during the rest periods and the underutilization is created. However, and this is the key point, trucks could run at least double that — 1,000 miles per day.
So there is a mismatch between driver capacity and truck capacity. The driver must sleep, so the truck must sleep, meaning 50% or more equipment underutilization. In fact, we know it’s more like 70%. So if we want to double a fleet’s capacity, how can we get trucks running 1,000 miles per day?
To do this means a carrier must change its over-the-road operating model fundamentally.
Locomation’s Autonomous Relay NetworkSM features 68 highway segments across the nation, and we know how much freight currently moves across each segment every day. Every segment has freight volume associated with it, which means we can calculate the current market and the expected revenue growth over time.
Locomation’s solution is to split the activity between the long-distance linehaul and local assets, so that the trucks can run more than 20 hours per day. We do this by optimizing the linehaul using team drivers, or we set up relays with different drivers completing 500-mile round trips with handoffs at 250 miles in each direction.
Locomation is working with trucking companies today to plan and build this operating model for their fleets, and training their employees on how to implement it. By our estimate, this approach will increase equipment utilization by at least 80%, reduce operating costs 5-7%, and reduce CO2 emissions by 14% for each tractor deployed.
This Operating Model reconfiguration happens before a carrier or shipper deploys our autonomous trucking products.
Once a company institutes this optimized operating model, incorporating the ARC system, which is the first product in our portfolio, is seamless. Our autonomous convoys, with one human-driven truck leading and a second follower truck operating in autonomy mode with its driver resting, will take the new operating model’s efficiency gains supersonic. Labor and fuel costs will drop, and with convoys running around the clock, profits will soar. At full implementation, we estimate profit increases of three or four fold above today’s levels.
For these reasons, fleets should contact us today to get a comprehensive demonstration of the technology and approach to re-engineer their supply chains for autonomy starting now. It’s a huge opportunity and the early actors will be best positioned to maximize their capacity today, and best prepared to deploy ARC-equipped autonomous trucks when they are ready.