Companies invest billions of dollars a year developing drones and driverless vehicle technology for commercial applications. From the port to the highway to the warehouse, we begin to see how technology will lead to autonomous supply chains in the not-too-distant future.
This development is at once good, bad, and (let’s face it) cool. A sci-fi geek like the author of this post can’t help romanticizing the future from time-to-time. Then again, sci-fi also knows how to deliver cautionary scenarios about dystopian futures and negative impacts of runaway tech.
The prospect of the autonomous supply chain, on a more practical level, has real benefits and measurable costs.
Progress Toward the Automonous Supply Chain
In this context, autonomous supply chain means automating parts of the journey a product makes from source to customer.
On the Sea
Last month, Norwegian maritime tech company Kongsberg Gruppen ASA, announced it would partner with a manufacturer to build a fully autonomous cargo container ship to launch completely unmanned by 2020. This is one of the several recent announcements of similar initiatives aimed at putting a cap on the cost of shipping. That includes government investment, particularly China and the EU, to develop what they see as a feasible technology on the verge of wide adoption.
On the Road
Meanwhile, other companies make strides to develop driver-less trucking solutions. Uber last year conducted a semi-automatic test freight delivery, based on technology from its acquisition of Otto. Google’s parent company, Alphabet, last week said it was also developing a self-driving truck through its Waymo unit. As Supply Chain News reports, the annual investment in autonomous trucking is well in the billions.
In the Air
Drones will be the most obvious outward sign of the autonomous supply chain. Retail rivals Amazon and Walmart keep are developing drones for last-mile delivery. Along with scores of other companies. It’s going to get crowded up there. That’s one reason for Alphabet’s Project Wing, an air traffic control system to plot and dynamically adapt flight paths for thousands of drones simultaneously. The company has already conducted tests organized by the FAA and NASA, but the project is seen as making complex drone delivery systems safer and agreeable to regulators.
Sharp Turn Ahead
The autonomous supply chain presents an obvious benefit to suppliers like you. Simply put, the more automation, the lower supply chain costs.
The prospect of autonomous trucking alone implies a huge benefit. Built-in efficiencies of self-driving trucks will reduce fuel costs. More significantly, since labor accounts for 35% to 45% of total trucking costs. Thus, remove the driver, slash the price tag of freight.
Which leads us to the downside. As with all automation, driver-less trucks will shake up an industry that employs millions of people.
The International Transport Forum predicts that by 2030, driver-less trucks could take 4.4 million truckers off the road.
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