How Autonomous Vehicles Tackle The Wasted Costs Of Shipping

With more companies in the supply chain introducing initiatives to lower carbon emissions and lessen the negative environmental impact of global trade, autonomous vehicles have gained momentum as a technology that could help further propel environmentally-friendly operations.

But there are other potential benefits to autonomous electric transport (AET), as Ellen Kugelberg, chief operating officer at Einride, recently explained to PYMNTS.

“There are a myriad of pain points in logistics that can be addressed by Autonomous Electric Transport,” she said, “but chief among them are the environmental, labor and utilization concerns that still exist for human-operated diesel trucks.”

Recently announcing a $25 million Series A funding round, Einride has developed a proprietary pod truck that aims to address many of the biggest challenges of traditional over-the-road freight.

Cutting Costs

Today, traditional trucks can create an inefficient supply chain and logistics strategy, meaning expenses pile up for companies and their third-party logistics providers. One of the biggest costs is simply paying the driver, said Kugelberg.

“Going from one or two drivers per vehicle with a high complexity of locations and needs, to one operator for 10 vehicles in one fixed location, will naturally create large cost savings in many steps of the value chain, with significant cost savings for shippers,” she explained, pointing to the opportunity for operators to manage multiple AET vehicles at one time without the need to physically be with the vehicle.

Saving money on drivers is particularly important today considering a global driver shortage, she added.

It’s also important considering the need for greater efficiency in transport. Human drivers and the risk of human error mean a high volume of trucks that are less than half full and non-optimal routes. Autonomous ground transport technology can optimize the shipping process to move more goods in fewer trips, not only saving money, but lessening the environmental impact as well.

Bringing Efficiency Through Data

Among the biggest opportunities in AET is digitization. Traditional trucks have limited opportunity to capture and transmit data with regards to a trip and items being shipped, a major gap that can be filled through autonomous vehicles.

“The relatively low level of digitization of modern transport … lowers utilization rates for every shipment, meaning trucks in transit between destinations are less than half-full on average — and some are carrying no goods at all,” said Kugelberg.

She also pointed to the growing opportunity for data to transmit precise location and timing of deliveries in real time, leading to greater loading and unloading efficiency. Further, AET technology’s digitization capabilities allow for autonomous vehicles to adapt to any changes in a transport route based on weather or traffic, the topography of the land, or whether a load must be refrigerated or not.

Eventually, Kugelberg said, payment data can also be integrated directly into the systems that operate such vehicles. Such capabilities could further enhance the speed at which shippers and sellers receive payment for their services and goods.

It will undoubtedly take time for such autonomous vehicles to become ubiquitous. In addition to the challenge of overcoming skepticism over the safety of the technology, Kugelberg pointed to evolving legislation around AET, which affects the development and adoption of the technology in various markets, as a key challenge in this space.

That being said, Kugelberg pointed to industries like retail, fast-moving consumer goods (FMCG) and some areas of manufacturing that are likely to be the earliest adopters of AET thanks to their traditionally simple shipment flows.

As time progresses, awareness of the potential benefits, from lessening the environmental impact to optimizing delivery routes, will grow. And ultimately, the cost savings within the supply chain will be passed down to the end-consumer.

“For consumers, this will, over time, improve and reduce prices of products while significantly reducing the environmental impact — if, and when, AET is adopted at-scale,” she said.