But I Thought Fuel Costs Were The Single Highest Cost

Discussion in 'Questions To Truckers From The General Public' started by Moose Holland, Mar 28, 2022.

  1. Moose Holland

    Moose Holland Bobtail Member

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    I found this following current-day video on the American freight industry and where it's headed. It's very interesting to watch when you get a few minutes of free time. They say that in theory an autonomous truck would reduce motor carrier costs by 70%. That's totally hard to believe. Is driver payroll really that high? What do you think?



    The video is mainly about rail freight, but it hits on trucking a lot and how rail and motor freight compete. The railroads are never short on train drivers (too many wannabes and very few RR positions open), but drivers for trucking is always in high demand.

    Train drivers = you know, the friendly folks that sit in loco cabs and toot the whistle at crossings and wave to little boys and girls as they roll on through the neighborhood
     
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  3. MysticHZ

    MysticHZ Road Train Member

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    That number is misleading ... target truck operating cost for the large carriers is 70% of revenue ... that's fuel, labor, capital cost and maintenance. Then about another 25% for non trucking overhead. If they're lucky they will make 5% profit.

    Now where that 70% from your vid is misleading is that number is actually 70% of 70% ... labor is 70% of the truck operating cost.
     
  4. Moose Holland

    Moose Holland Bobtail Member

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    .....
     
    Last edited: Mar 29, 2022
  5. Moose Holland

    Moose Holland Bobtail Member

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    According to this source, autonomous trucks could cut carrier costs 45%. Here is the catch. Driverless trucks could operate continuously for much longer hours. Voila!! Robots would not be under HOS rules like human drivers are! Robots don't need to sleep, eat, use the toilet or shower or lodge. There is no WC costs for robots. There is no training costs for robots. Robots don't need creature comforts like cab heating and a/c.

    Autonomous trucks will save carriers money and improve driver livelihoods - FreightWaves

    Autonomous truck technology has the potential to change the cost structure of the carrier industry. A McKinsey & Company report said that a fully autonomous trucking market would cut operating costs by 45 percent, saving carrier companies between $85 billion and $125 billion annually.

    Startup Ike announced on Medium Tuesday that it raised $52 million in a Series A funding round led by Bain Capital Ventures. Ajay Agarwal, a Bain Capital Ventures partner, joined Ike’s board.
    Basis Set Ventures, Fontinalis Partners, Neo and Redpoint Ventures participated in the funding round as well. Ike plans to use the capital to expand its development team in order to build a commercial market-scale product.

    “The temptation when you’re working on this technology – because there’s so much potential and because there’s so much excitement for it – especially for small companies in the early stages, is to try and hack something together and try to get up and running really quickly,” Alden Woodrow, co-founder and CEO of Ike told TechCrunch in a recent interview.

    “Because our road map is measured in years, we’ve got some time to get it right,” Woodrow said.

    Ike is focused on issues currently facing the carrier industry – driver shortages, new regulations, growing accident rates and the rise of e-commerce. Ike believes self-driving trucks can solve these issues by making trucks safer and drivers more productive.

    The advantage of autonomous trucks will be their application with highway operations. According to the McKinsey report, long-distance highway trips are the least popular for drivers. Using autonomous trucks on these trips would save $24 billion in labor costs and enable carriers to use truck assets 20 hours per day rather than 11, thereby increasing efficiency and expanding capacity.


    The key to Ike’s mission is not to use self-driving trucks to replace drivers, but to improve the livelihoods of drivers. Ike’s self-driving technology is focused around highway operations, allowing drivers to work in the industry close to their homes.

    The only question is, will robots be able to do the pre-trip inspections and check the security of loads while the truck is underway? Trucks might still break down under driverless operation. Tires will still blow out or go flat. Humans will still have to be dispatched out to recover disabled vehicles. I guess the trucks could refuel themselves robotically.
     
    Last edited: Mar 29, 2022
  6. MysticHZ

    MysticHZ Road Train Member

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    Two things here ... we're talking about la or cost.

    One ... driver are paid by the mile, not time. So continously operation willni impact on labor cost for long haul transport.

    Two ... my perception. If reduction of labor cost us the goal and autonomous trucks only run highway. You now have to employ 2 drivers to do the job of one. Not to mention you need 3 trucks to do what one did.
     
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  7. Moose Holland

    Moose Holland Bobtail Member

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    But time is money to the carrier. The truck is only profitable when she is rolling. If the driver is sleeping, then the truck is NOT rolling, and no money is rolling in during those sleep hours. I can see where autonomous trucking is most feasible for long haul. Human drivers will do the local driving mostly. A robot might run the rig from a California shipping port to Chicago. More and more, freight trains will carry more freight long haul as well. With online shopping on the rise and the reduction of coal production, railroads have been taking on more intermodal well cars loaded with amazon.com orders and eBay orders. Walmart can be done intermodal as well. Human drivers will one day just work the last few miles. Local trucking with plenty of home time.

    Reduced costs for freight carriers might also mean consumers will save, maybe. Instead of cutting costs just to jack up profit margin, carriers might pass the savings on to shippers instead with reduced shipping rates. Either way, reduced freight costs could either mean more money saved in the consumer's bank or the carrier's CEOs will be flying on an even bigger business jet if they just want to jack up profit margins for the corporate fat cats or pay shareholders off with bigger dividends.

    Oh, and speaking of intermodal, people have been burglarizing well car trains in LA and making a big costly mess:




    I can't understand why intermodal shipping containers have flimsy security. Trains slow way down through town and people jump them to break into stackable containers. Guns have even been ripped off.
     
    Last edited: Mar 30, 2022
  8. mustang190

    mustang190 Road Train Member

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    There are three things that determine the profitability of a truck. Driver, tires and fuel.
    Everything else is fixed price. The cost of your equipment, tags, insurance etc. are all known costs.
    Drivers are human, they have needs and limitations.
    Tires can go out at anytime. A blowout can erase the profits of some loads.
    Fuel, that price is like a seesaw, varies from week to week, state to state.
    If you can eliminate the costs of one or two of those three the profits are endless. Thus the rush to driverless trucks.
     
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  9. Mike250rs

    Mike250rs Heavy Load Member

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    keep in mind, the "driverless" truck will still need a warm body in a seat.

    The tech is nowhere near the level a truck can check in at a customer, argue about appointment times, back into a dock made for a little pup trailer, then monitor the guy on the forklift doesn't drive thru the side of your trailer.

    The vid is cute, and probably paid for by a rail investor
     
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  10. Moose Holland

    Moose Holland Bobtail Member

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    A human driver would then be in a truck right at the customer. The humans will drive the First Mile and Last Mile. Robots will just drive between two distribution hubs 100's and 1000's of miles apart. Humans will pick up loads from a sea port and take them to a local hub say in LA. A robot will then truck that load to a hub in let's say Chicago. A human then on the receiving end will take the load to the local customer, let's say John Doe Snowmobile Manufacturing, Inc. Human truck drivers will be like local wranglers, rounding up loads for a hub and shotgunning loads out from a hub to final customers. The middleman over the main line will be the 'bot to drive those long Middle Miles. This is my theory. Railroads likewise have distribution hubs called classification yards. Local human train engineers likewise act like the cowboys of the rails. They wrangle freight cars to and from local trackside customers say on a sub-divisional or district level, a smaller section of the rail network. Likewise, robots could drive long-haul freight trains from a yard in LA to a yard in Chicago. Trucking will be organized like freight railroading with various stages in between of handing off trailers and/or intermodal containers from the origin to the final destination.

    If a customer wants to argue, they can just get on the telephone to the driver's employer.
     
    Last edited: Mar 30, 2022
  11. RockinChair

    RockinChair Road Train Member

    Yes, but that doesn't mean that there won't be a human in the truck the entire trip. Trucks will operate just like commercial airliners, with humans onboard ready to take control in the event of a systems failure or other AOC, and manually operating the vehicle when not on controlled-access highways that are up to autonomous operation standards.

    Also, there are certain types of trucking that will never be automated due to the special circumstances surrounding the operations, like routes, cargo, and security.
     
    Last edited: May 31, 2022
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