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Transportation Technology Innovation - PPT Presentation

Workshop Lisa Kennedy June 5 2018 Guiding Client Companies to Value Through Digital Strategy Planning and Execution 2018Tompkins International Welcome to the 2hour workshop on logistics technology innovations We will have a presentation on the progress to date of selfdriving te ID: 809026

driving delivery autonomous technology delivery driving technology autonomous trucks vehicles driver mile service vehicle amazon drivers uber final truck

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Slide1

Transportation Technology Innovation

Workshop

Lisa Kennedy – June 5, 2018

Guiding Client Companies to Value Through Digital Strategy, Planning and Execution© 2018—Tompkins International

Slide2

Welcome to the 2-hour workshop on logistics technology innovations. We will have a presentation on the progress to date of self-driving technologies, followed by breakout into groups to discuss the effects of these technologies on transportation and warehousing.

Understand the different parcel delivery technologies available and advantages/disadvantages of each.

Evaluate self-driving vehicles’ effect on TL, LTL, parcel, freight consolidation, brokerage and understand how it may affect network design and warehouse locations.

Will the new ELD mandate will drive faster adaptation of the technology?

What will be the impacts on long-haul, short-haul and parcel deliveries?

What is your background? Broker? Service Provider? Shipper?

Introduction

The intent of the workshop is to collaborate on thoughts and ideas on how new technologies will effect the supply chain and how you can leverage the solutions to improve your operations through reduced cost or better efficiencies.

Slide3

Logistics Technology Innovations

Source: Yale

Autonomous vehicles appear to be on their way to becoming mainstream. Both Uber and Waymo have committed to purchasing thousands of vehicles to offer self-driving services. Investors have poured billions into the technology. As of Feb. 26, 2018 California will allow fully autonomous cars without safety drivers to test on public roads. There are currently 50 companies testing nearly 300 autonomous vehicles that are licensed with the California DMV.

Recent forecasts include:

Material Handling and Logistics forecasts that as soon as 2026 90% of new vehicles will be autonomous.

The distribution of goods is a target for start-ups and incumbents. McKinsey estimates 80% of final-mile deliveries will be made with autonomous ground vehicles in 8 years. Autonomous technology has been used in manufacturing and distribution centers for years where automated guided vehicles are popular.

Slide4

China is testing unmanned warehouses, drones and self-driving vehicles, the future being a completed automated supply chain

Unmanned Warehouses

200,000 orders per day processing capacity and 30% cost reduction in the next 10 years

Full automation from packaging, off-loading, storing, transport, allocation, and loading onto delivery vehicle

Self-Driving Vehicle

JD has successfully tested last mile delivery using unmanned vehicles during 6.18 event in 2017

JD has launched self-driving delivery fleets

Drone

~50 drones are in operation for package delivery of up to 66#s within 19 mile delivery radius

JD is establishing 150 drone airports and building drones that can carry up to 1 ton by 2020

Logistics Technology Innovations

Slide5

Final Mile Delivery

Autonomous vehicles will have a significant impact on the auto industry. Automotive OEMs will have to reinvent their business models, perhaps to sell rides, not cars. The car market is worth about $2 trillion a year, the market for personal transport is about $10 trillion a year.  The global market for parcel delivery is projected to grow 9 percent annually to more than $343 billion by 2020.

The market size is attracting a number of new competitors, including technology companies.

The converging trends of robotics, self-driving cars, and e-commerce are leading to an explosion of interest in the last-mile delivery challenge. Consumers are ordering more items online than ever before, and there is a growing expectation for shorter and shorter delivery windows.

Self-driving vehicles will be initially deployed by fleet operators.

The high costs of technology and a required support structure. These costs can be amortized over a fleet of vehicles in use almost all the time but don’t make financial sense for an individual likely to use the vehicle just 5% of the time.

Local governments may limit the use of autonomous vehicles, initially, to dense city centers and other specific areas where they would be used widely.

Source: The Economist, WSJ, Deloitte

Slide6

Final Mile Delivery

Package delivery is being tested by a number of companies:

Udelv is demonstrating what it calls “the world’s first public-road autonomous delivery test,” in which a self-driving van (with human safety driver) will deliver goods from the high-end Draeger’s Market chain in the Bay Area city of San Mateo.

Ford began testing human-free pizza delivery with Domino’s.

Toyota rolled out a delivery vehicle in Las Vegas, e-Palette, the futuristic van, has partnerships with Amazon.com and Pizza Hut.

Renault-Nissan plans to unveil a driverless delivery van.

Source: The Economist, WSJ, Deloitte

Udelv

Slide7

Final Mile Delivery

Self-driving technology will transform the design possibilities for existing vehicles, and possibly new vehicle categories that are a combination of current technologies.

The economics of transportation and delivery services will change, making on-demand delivery a much faster, cheaper, and more convenient option.

Source: Ars Technica

Slide8

GM and Waymo appear to be ahead of key competitors in ride services.

Waymo indicated on May 31, 2018 that it agreed to purchase up to 62,000 minivans from Fiat Chrysler Automobiles. Waymo previously agreed to buy up to 20,000 compact cars from Jaguar Land Rover, starting in 2019, giving it a potential fleet of more than 80,000 driverless vehicles within three or four years.

The volumes Waymo is committing to indicates their technology is very close to commercial ready.

The determination of GM and Waymo to offer ride services within in 2018 suggests that businesses that use driverless cars to transport people will spread rapidly and absent the cost of a driver.

Analysts indicate it’s a completely unproven business model with costly technology and will have growing pains. The first vehicles will probably be programmed to be so cautious in traffic that trips may initially take much longer than people are used to.

Uber had a setback in its efforts to develop autonomous taxis when a test vehicle struck and killed a person in Tempe, Ariz., and Uber to halted testing of self-driving cars in Arizona.

Tesla and its driver-assistance system, Autopilot, has issues after a Model X sport-utility vehicle crashed into a concrete barrier. The driver, who was killed, had Autopilot engaged. Since then, two other Tesla cars that had Autopilot running have been involved in nonfatal accidents.

Ford is racing to put self-driving cars into ride and delivery fleets, but it has a longer timeline and is hoping to have its car in production by 2021.

Ride Services will Develop Technology Used by Trucks

Slide9

Self-Driving Vehicles - GM

GM Cruise has been rapidly developing its autonomous vehicle technology and spent $500 million in 2017 and will spend $1 billion in 2018 on technology development.

A fund affiliated with SoftBank Group of Japan plans to invest $2.25 billion in the driverless-technology division of GM to help them develop a ride-hailing service in select cities.

This reflects the growing confidence that commercial use of autonomous cars, despite recent setbacks that have raised questions about the technology’s safety.

As part of the deal, GM plans an additional $1.1 billion of its own money into the unit, GM Cruise Holdings.

GM is awaiting permission from the United States Department of Transportation to begin operating a fully autonomous car in a commercial ride-hailing service in 2019.

GM’s Cruise AV, could be produced on a standard assembly line once approval is granted by the federal government and states where the cars would operate. Likely spots for initial operations are San Francisco and Scottsdale, Ariz., where Cruise is already conducting tests.

Slide10

Final Mile Delivery - Toyota

Toyota plans to begin testing the e‐Palette concept vehicle in various regions, including the United States, in the early 2020s.

It will come in three sizes: a bus-sized vehicle, a shuttle and a small delivery vehicle sized to run on sidewalks.

Toyota said at the CES global technology conference in Las Vegas that it will work with companies including Amazon.com Inc, Chinese ride-hailing company Didi Chuxing Technology Co, Pizza Hut, Mazda Motor Corp and Uber Technologies to build the vehicle and its hardware and software support and develop connected mobility products.

https://www.youtube.com/watch?v=XmoPQuMlOYE

Slide11

Final Mile Delivery – Nuro

Nuro was founded by two former lead Google engineers who worked on the famed self-driving car project.

Nuro is focused on deliveries, specifically the kind that are low-speed, local, and last-mile: groceries, laundry, or take-out orders.

Nuro has already raised $92 million in two rounds of fundraising and is in talks with a number of retailers and delivery providers about possible partnerships.

https://www.bing.com/videos/search?q=nuro+youtube&view=detail&mid=2CCEC944036E5F1CCC3E2CCEC944036E5F1CCC3E&FORM=VIRE

Slide12

Final Mile Delivery – Starship Technologies

Starship Technologies, claims to be the first company to build delivery robots and is operating in 10 cities across five countries.

Starship Technologies has sidewalk-only delivery robots making trips in California, Washington, DC, Germany, and the UK.

Founded in 2014, the company has tested it six-wheeled delivery bots in 100 cities with 12 million deliveries.

It’s raised $17.2 million from investors including Daimler and Shasta Ventures and has been delivering fast food for JustEat in London, and for DoorDash and Postmates in California and Washington D.C.

An Arizona law will allow delivery robot companies to roll out their bots on sidewalks for a testing phase starting in 2018.

Slide13

Final Mile Delivery – Amazon

Amazon is considering using self-driving robots, having just filed a patent for an autonomous ground vehicle.

Amazon’s patent application published with the U.S. Patent and Trademark Office in 2018 refers to an “autonomous ground vehicle” that can carry items from a delivery truck to a person’s front porch, or even bring them into a house.

Amazon's patent application describes a robot that has the technological capability to open doors or garage doors, similar to what Amazon is already pushing with Amazon Key.

Amazon acquired Blink in 2017, an Andover, MA-based company that makes internet-connected home security cameras and may aid autonomous deliveries.

Slide14

Final Mile Delivery – Amazon

Amazon continues to increase the number of fulfillment centers it operates worldwide. The primary impact to suppliers is the need to transport smaller shipments, more frequently to more locations. The major location changes in the US include an additional 36 locations in the US.

As Amazon continues to streamline operations, expect them to ask suppliers to ship more frequently in lower volumes, more quickly to make more efficient use of its warehouse space.

For suppliers with significant distribution capabilities expect them to transfer to the supplier flex program where Amazon will pickup the order from the supplier facility and take control of the order to its final destination.

Expect to have extremely fast response times in supplier warehouse operations in order to quickly respond to online product orders.

Smaller shipments will cause an increase in the packaging and handling costs at the warehouse level and most likely outbound transportation costs.

Supplier facilities will need to be set up with highly flexible each picking operations and labor to accommodate cyclical volumes and efficient storage racks

Facility Type

Current Facilities

Future Facilities

Future Sq Ft (000)

FCs and Return Centers

119

28

115,005

Pantry/Fresh Food FCs

20

2

4,077

Whole Food DCs

12

0

1,044

Prime (Now ) Hubs

53

0

1,810

Inbound Sort Centers

8

1

5,299

Outbound Sort centers

38

3

11,664

Delivery Stations

69

1

5,907

Airport Hubs

0

1

3,350

Total

319

36

148,155

US

Slide15

Drones

Drones could have a viable application for package delivery with these scenarios:

Homes desiring drone delivery would have a designated drone landing pad. The front door is hard to access. A designated pad would work for individual home delivery. This would first be seen in up-scale housing, which typically has large open areas surrounding the house and would add that touch of unique luxury.Up-scale apartments / condos would have balconies designed to serve as drone landing pads. Some visionary building designers have already developed concepts incorporating drone delivery.

The United States Postal Service (USPS) currently delivers seven days a week for Amazon. Each office of the USPS would have a drone landing pad for not only Amazon, but others using drone delivery. USPS is uniquely positioned to become the most efficient and cost effective last mile delivery service due to the number of locations and low cost delivery vehicles. Drone delivery to a post office would capture the low per package cost associated with carrying a number of packages in one flight.There can be Click & Collect hubs or lockers. This would be similar to a community mailbox configuration as used in apartment complexes. A drone could deliver multiple packages to an automated pick-up point that would produce the customer package when the correct access code.

UPS has tested drone delivery from atop some of its trucks.

Slide16

The main issues identified with self-driving vehicles, delivery robots or drones performing the final mile delivery is there is still required a person to receive the package.

Locker technology companies in China have developed technology that will allow the lockers to receive parcel deliveries by a drone or a delivery robot.

Technology is available which allows couriers to enter a home to put a package inside. The technology can be easily adjusted for delivery robots to allow entry in a home or multi-unit building.

Mobile lockers can be used which still would require a person to receive the package but the mobile locker can be “stationed” on a particular corner for a period of time allowing for some flexibility to receive the package.

Final Delivery Technologies

Slide17

Sector

Locker Uses

Preferred Location

Delivery Companies

Select regions with limited online sales

Interior/ Exterior

Retailers

Select B&M with significant online sales-locker will be located in the store to increase store traffic and B&M sales;

BOPIS-Buy Online Pick Up In Store

Interior

Multi-tenet buildings/ Universities

Select urban/suburban locations with high eCommerce sales and theft issues

Interior/ Exterior

Post Offices/Mail Centers

Select urban/suburban locations with high eCommerce sales and theft issues

Exterior

Office Buildings

Lockers for employees to pick-up their packages directly, customized configurations for office’s needs.

Interior/ Exterior

Locker Use by Sector

Self-service pickup stations and lockers have been popular for years in Europe and China, where home delivery can be difficult and more of the population lives in dense urban centers.

Slide18

Locker Manufacturers

Locker Company

Main Customers

Website

Luxer One

Property Management Companies, Retailers (lesser extent)

https://www.luxerone.com/press/

Package Concierge

Apartments, retail, universities, and office/corporate settings

http://packageconcierge.com/market

Amazon Hub

Lockers designed to be installed in multi-tenant dwellings so that residents can receive bulky packages and pick them up at flexible times. Key to the service is that Amazon is offering it as a delivery option for packages from any delivery provider.

https://www.amazon.com/b?ie=UTF8&node=17337376011

ProShip

Residential, retail

http://www.proshipinc.com/solutions/packcity-parcel-lockers

CleverFlex

Retailers, Walmart is a main customer in the US, many installations in Europe

https://bellhowell.net/en-US/CleverFlex-Announcement-Press-Release

Retailers and multi-tenet buildings are the target market for US based locker manufacturers

Slide19

Final Mile Delivery

Possible solutions:

Mobile autonomous driven van with lockers at designated points for periods of time allowing some flexibility with deliveryLocker deliveries in multi-tenet, office building, other where the autonomous vehicle pulls up and a person at the building unloads the packages to the lockerThe autonomous vehicle pulls into a locker and robotics unload the vehicle into the appropriate locker

A delivery robot enters your home with an automatic unlocking sensor and delivers the package inside the home from a multi-cavity delivery vehicle and product is sent down a chute

“You need to get to the future first, ahead of your customers, and be ready to greet them when they arrive”

—Marc Benioff

Slide20

Final Mile Delivery Breakout Session

Advantages

Disadvantages

Products/Locations

Delivery

Robots

Low capitalLess chance for human injuryOwnership by shipperPermitted in ArizonaExpedited deliveriesParcel size limitedShipping location must be close to customer

Theft of the robotSmall eCommerce ordersHospital campusesCorporate campusesDelivery VehiclesMedium capitalRefrigeration availableGreater shipping range vs robotsPossible multiple delivery stopsPermitted in CaliforniaPossible human injury

Customer must be present to receiver order

Groceries

eCommerce orders

Drones

Little threat of human injury

Customer need not be present

Does not add to road traffic

Inability to efficiently ship product to residential

Package theftTheft of the droneData centers

Critical partsHospital campusesCorporate campusesLockersNo threat of human injuryCustomer need not be presentRefrigerationReduces deliver costsMultiple deliveries to one locationOrder size limited to parcel box sizePotentially less convenient to customerRetail stores-BOPISResidential buildingsOffice buildingsUniversities

Slide21

Self-Driving Trucks

Self-driving trucks can operate 24x7 at a cost of about 50% of what it is today (Source: Australian Road Research Board).

The heads of the American and Ohio Trucking Associations have suggested that autonomous trucks will be good for truckers. Ohio has committed $15 million to set up a 35-mile stretch of highway outside Columbus for testing self-driving trucks. 51 percent of supply chain companies believe their operations will include self-driving trucks by 2025, according to Eye for Transport survey results. Three percent plan on employing autonomous vehicles in 2017, while nearly 4 percent anticipate using them in 2018

Currently 2.5% of shippers and less than 2% of 3PLs report use of autonomous vehicles, but 27% of shippers and 3PLs report they plan to make a future investment in the technology. MIT has named autonomous trucks as one of the top 10 technologies for 2017.

Slide22

The near-term objective is to make it possible for long-haul trips to be managed by fewer drivers, eliminating the need for team driving. Automated trucks can stay on the road longer and are expected to be less prone to accidents. Eventually, these factors are expected to make self-driving trucks a less expensive alternative.

One company, Embark, recently completed a coast-to-coast trip from L.A. to Jacksonville, Florida, driving 2,400 miles. The goal of self-driving trucks is to drive highway miles between transfer hubs, where human drivers will take over for the last miles through urban and industrial parks. 

Transfer hubs will be used where trucks can pick up and drop off trailers. At those locations, autonomous trucks would grab trailers for long-haul drives, while human drivers would grab ones earmarked for closer delivery.

Most of the major Class 8 manufacturers, including Paccar, Daimler and Volvo, as well as newer companies, such as Waymo and Otto, are testing autonomous technology that could be used to create self-driving vehicles.

Uber predicts that between 500,000 and 1.5 million self-driving trucks will be on the road by 2028.  It is widely expected self-driving trucks will be used far more efficiently and drive down the cost of freight and stimulate demand.

Self-Driving Trucks

Slide23

Major Self-Driving Truck Companies

Company

Current

Future

Uber

(acquired OTTO in 2016)

Testing runs in AZ, CA; its fleet of self-driving trucks was making deliveries in Arizona

Using a transfer hub model, in which the trucks drive autonomously on the highway and human drivers take over for the last miles

Two primary transfer hubs in Arizona , one in Sanders near the border with New Mexico and another in

Topock

near the California border

Leverage of Uber app for matching shippers to transportation service providers

In 2017, Uber announced it will buy more than $1 billion of self-driving SUVs from Volvo, The order, for 24,000 of the vehicles by 2021, is the first commercial purchase by a ride-share company.

Google (Waymo)

Waymo first began testing its autonomous technology on Class-8 tractor trailers in California and Arizona

In 2018, the company brought its self-driving minivans to Atlanta for mapping and public testing

Using self-driving trucks for data centers in Atlanta

Four areas of revenue:

Ride service

Put its autonomous-driving technology into trucks and delivery vehicles

License its technology to automakers like Fiat Chrysler

Driverless shuttles to take riders to mass transit systems

Waymo will begin buying Pacifica minivans for its ride service in 2018. They will be produced at a Fiat Chrysler plant in Windsor, Ontario, and equipped with self-driving technology at a Waymo technical center in Novi, Mich.

Waymo agreed to purchase as many as 62,000 minivans from Fiat Chrysler Automobiles for a ride-hailing service that will start operating commercially in Phoenix by the end of 2018.

Embark

Embark has been shipping refrigerators for Electrolux between S. CA and TX since late 2017

Completed a coast-to-coast trip from LA to Jacksonville, Florida, driving 2,400 miles autonomously in 2018

Embark currently has a formal partnership with Peterbilt Motors

The company’s goal is to further develop its technology to enable Level 4 automation, where the vehicle can travel on limited, specific highway routes with no driver.

Embark envisions Level 4 driverless trucks operating as part of a redesigned freight system, where trailers are exchanged between local drivers and driverless trucks at freight hubs situated along highways.

By the end of 2018, plans to grow its fleet to 40 trucks.

The major technology developers have become very competitive.

Slide24

Waymo is expanding the scope of its self-driving experiments, announcing in March, 2018 that its autonomous trucks will deliver freight for Google’s data centers in Atlanta. The trucks won’t be completely driverless, but will be operating on public roads during the pilot.

Waymo is teaming up with sister company Google’s logistics team to develop technology and integrate it into the operations of shippers and carriers, with their network of factories, distribution centers, ports and terminals.

Waymo

Slide25

In March, 2018 Uber’s announced autonomous trucks customers are using Uber Freight, Uber's commercial cargo shipping on-demand app. The first runs are being done in Arizona, with regular hauls operating with both human drivers and autonomous trucks working in tandem.

Uber will load up the freight on a conventional, human driven truck who collects the load from the shipper and then does a short haul run to a transfer hub. The short haul truck then loads its cargo onto a long-haul freight transport, which is autonomous. That self-driving test truck handles the highway driving for the longer portion of the trip, handing it off once again to a human-driven trip for the short haul to the destination.

Uber Freight handles the load sourcing, similar to connecting shippers with regular human truckers. Uber's Advanced Technology Group is deploying its self-driving trucks on the Uber Freight platform, in the same way that the autonomous team within Uber is using the Uber ride-hailing network to test and deploy its self-driving ride share vehicles.

Uber

Source: Yahoo Finance

Uber is working on a one or two-year payback or $30,000 for a retrofit for a self-driving truck.

https://youtu.be/FqwtibdHSZM

https://youtu.be/oda7WYNJQfs

Slide26

Driver Shortage

It is widely acknowledged that there is a truck driver shortage. The average age of a trucker in the U.S. is 56.

The ELD and hours of service mandates have reduced the number of hours drivers can drive; a recent DAT survey reports that 67 percent of carriers said they drive fewer miles than they did before installing the devices.

Analysts believe there is not a driver shortage, there is a shortage of drivers willing to work for the prevailing wages. That issue can be addressed by raising driver pay.

Wages are going up. The American Trucking Association, a trade group that represents fleet owners, said annual truck-driver salaries rose between 15 percent and 18 percent from 2013 to 2017.

Slide27

Driver Future

The American Transportation Research Institute has identified significant safety and productivity benefits that may result from autonomous technology adoption.

While technology could ultimately remove the need for a driver, it is likely that drivers will remain a critical link in the supply chain for quite some time including extensive driver involvement of value-add service, at either the point of delivery or the point of pickup.

Drivers are physically unloading vehicles, operating lift gates and using material handling equipment to deliver product to certain stations within the delivery point.

Drivers play a critical role in interacting with customers on both pickups and deliveries. Plus, for safety reasons the public may insist that automated vehicles have a driver present to take over in any unexpected or difficult situations. Changing technology in the cab could require drivers with different proficiencies while also strengthening drivers’ abilities.

Slide28

ELD Mandate – Driver Availability

The greatest impact on driver availability will be the time the drivers are allowed to drive. Drivers will require more time to transport the same load, limiting the number of loads they can deliver. The primary impact will be for shipments greater than 500 miles and shipments that require longer loading times.

Currently, if a driver is close to their destination, they will continue the extra 1-2 hours of driving to arrive and unload the trailer. This will no longer be allowed. Current one-day trips will now be 2-day trips. The greatest cost impact, will be in the 500-700 mile shipments, or multiples thereof.

The impact of the transition from a 1-day to a 2-day driving time will increase the cost of shipments. Although a shipper may only ship within a 500 mile radius, most likely the driver delivers to destinations outside the radius and his time is at a premium. The rates will go up, because the overall availability of the drivers' hours have decreased.

Note:

Embark’s

first coast-to-coast run took the normal five days to complete because the driver was still operating within hours-of-service limits. A truly autonomous Level 4 truck, however, will be able to complete the same trip in just two days by operating around the clock.

Slide29

ELD Mandate – Transportation Costs

Select service providers have already adjusted rates based on product shipped and distance. Trucking companies have increased rates 6% to 10% in the contracts they've signed with shippers over the past year to offset higher wages and take advantage of the strong demand and limited supplies.

“We have increased our fees to our customers from $30 to $300 for select origin and destination pairs. The increases were based on how long the product took to load and where it was going”-Owner Operator, Midwest.

“Our main service provider has already increased our rates from $1.80 per mile to $2.15 per mile. We are currently losing money on all our shipments until we deliver all current orders”-Enterprise Shipper, Southeast

In general, many service providers, especially brokers, were unsure of the effects of the ELD on driver availability and transportation costs.

Tompkins believes the full impact of the ELD mandate will come into effect in the next couple months when capacity is tight, typical for summer. Shippers will be open to looking at new technologies to lower transportation costs.

Slide30

Platooning

Platooning trucks will have safety and environmental benefits as well as for fleet owners and truck drivers.

Hours of Service

Safety

Driver Distraction

Traffic

Driver Retention

Reduce driver stress and fewer monotonous periods

Compensates for a distracted driver

90% of truck accidents caused by human error*

Trucks can operate 24x7 and off-peak hours

Driver Shortage

Reduced Emissions

Less Accidents

Reduced Congestion

Environmental/Safety Benefits

Trailing trucks have resting periods; trucks can get to destination sooner

Reduced stress may attract more truck drivers

*Source: Australian Road Research Board

Fuel Savings

Fuel is 30% of operating costs of long-haul**

**Source: MIT

Insurance Costs

Reduced insurance premiums from less accidents; decrease workers compensation

Slide31

Self-Driving Truck Companies are Targeting Level 4

Source: SAE

Slide32

Unmanned Warehouses

Warehouses of the future can be completely unmanned. The low hanging fruit will be to automate the final mile delivery. As warehouse labor becomes an issue more operations in the warehouse will be automated.

Warehouse labor turnover can be as high as 36% annually in some areas.In certain parts of the country, labor is unavailable.Interesting new warehouse automation technologies are being introduced in the market:Warehouse robots are more popular for their flexibility and scalability

http://www.tompkinsinc.com/what-we-do/tompkins-roboticsThis video provides a tour through JD.com’s unmanned warehouse

https://www.youtube.com/watch?v=RFV8IkY52iY

Slide33

Breakout Session - Thoughts

How will the different technologies will affect the current transportation service providers?Owner/operators will have difficulty competing with transportation service providers of scale as they will have the money to invest in autonomous technology and will be able to lower labor/fuel costs with platooning.

Market consolidation will effect the brokerage industry? Brokers move into offering platooning-hubs-consolidation services?Dedicated fleets will be less common as they will want the cost advantages of autonomous technology and platooning?More carriers for parcel delivery? Effect on UPS, FedEx? USPS?

Slide34

Breakout Session - Thoughts

Hypothetical scenarios:Warehouses go back to being centralized with small local cross docks or pool centers for regional deliveries. Self-driving trucks can operate all night until the destination for delivery next day. Trucks are smaller as deliveries are made nightly.

Warehouses move product more often between locations.Overall 3PL/Marketplace business increase as 3PLs invest in the technology needed for automated centralized warehouses with self-driving vehicles and low cost supply chains.

Warehouse

Customer

Consolidation Facility/Self-Driving Truck Hub

TL or self-driving van to hub

Long Haul

TL or self-driving van to forward stocking location

De-Consolidation Facility/Self-Driving Truck Hub

Locker

Final Delivery by:

Self-driving vehicle

Delivery robot

Drone

Slide35

Breakout Session

Let’s look at several different autonomous technology developments. Please list the affect of the different developments on the transportation industry as a whole and also on the supply chain:

Self-driving trucks for long haul truckingSelf-driving vehicles/technologies used for final mile deliveryAutonomous technology effect on TMS, TL, LTL , brokerage, asset and non-asset based transportation service providers, dedicated contract carriage, backhaul, rail, air, others?For above:

Likely scenariosEffects on the supply chainSWOT

Slide36

Thank you!

Please provide your email address or give me your card and I will send you a copy of all the outcomes of the breakout sessions and my presentation.

lkennedy@tompkinsinc.com

Slide37

Resources

Lisa Kennedy

Project Manager 6870 Perry Creek Road

Raleigh, NC 27616(919) 876-3667

(847) 254-2353 (C)lkennedy

@

tompkinsinc.comwww.tompkinsinc.comwww.monarchfxalliance.com

Supply Chain RevolutionsResponding to Digital Disruptionshttp://bit.do/supplychainrevolutionsThe Titans: Alibaba, Amazon, and WalmartGame Changing Strategies: Time for You to Respondhttp://www.tompkinsinc.com/category/videos/

What is the MonarchFx Alliance?

http://www.monarchfxalliance.com/Thought-Leadership/Videos

Contact

Videos

What is Tompkins Robotics?

http://www.tompkinsinc.com/what-we-do/tompkins-robotics

SensorThink – Your Digital Platform for The Connected Warehouse™

https://www.youtube.com/watch?v=9sbGmbgFbvw

The Connected Warehouse™

https://www.youtube.com/watch?v=S-lnPXkT4-M

https://www.tompkinsinc.com/en-us/Services/Warehouse-IoT-Systems

The New Retail Video

https://www.youtube.com/watch?v=I1-Y42p0x94

MonarchFx

https://www.youtube.com/watch?v=dEWtgenGLiU&t=16s