Roland Berger: Truck automation may stall on early business case

The logistics of moving goods about with trucks may be open to a stepwise evolution towards full automation. The prospect of full automation, in which drivers are no longer required, is tantalising to the trucking industry owners whose major costs – outside CapEx – are fuel and drivers. Yet intervening stages come with significant investment costs and legal issues, which may put off rapid evolution in the market from the side of fleet operators and OEMs.

In a new report from Roland Berger, titled ‘Automated Trucks: The next big disruptor in the automotive industry?’, the consultancy considers the effect of different levels of automation on the trucking industry, as well as the key drivers holding off, and urging, market evolution.

Automation
The automation of trucks, according to the research, will undergo a number of stages. It starts with stage 0, the most basic stage, which has been the norm since the development of modern trucking – there is no automation. Stage 1, which already exists today, sees a number of driver-assisting technologies installed, including emergency breaking, adaptive cruise control, lane assists and driver assisted truck platooning. Stage 2, which introduces partial automation, is currently in pending implementation, and includes highway assist, predictive powertrain control, lane change assist, and intelligent parking assist – these technologies allow drivers to take their hands and feet off what have traditionally been key levers.

The next stage, stage 3, will see conditional automation in which the driver no longer has to be fully engaged with the process of operating the truck. Technologies like highway pilot, allow the driver to be fully disengaged but open to alerts, although they must need to be able to take control quickly if an unexpected situation arises. Stage 4 introduces the highway pilot, meaning that on long stretches the vehicle is completely in control of AI, with no responsibility to the driver for that period of the trip. In the final stage, stage 5, the truck is fully automated, and a driver as such is no longer required at all.

The different stages will, according to the analysis from the consultants, bring with them different implementation costs. Stage 1 involves around $1,800 per truck and involves a range of hardware and software installations, such as radar and sensor processing software. Stage 2 costs around $5,100, with additional hardware and software upgrades. Stage 3 would require an investment of around $6,200, and is the final stage in which hardware upgrades would be required. Stage 4 and 5 would cost an additional $5,900 and $4,400 respectively. The total cost for full automation, per truck, stands at $23,400 – 85% of which comes from software needs.

Scenarios
To better understand the cost of the upgrade, in relation to the various stages of automated driver development, the consultancy developed three different trucking scenarios. The different scenarios provide a range of conditions in which the specific value of the technologies can be better highlighted. The long haul scenario includes mainly highway travel, as well as plenty of opportunity for platooning. The short distance, high traffic roads scenario involves a shorter highway trip. The regional low traffic roads scenario considers the use of less frequented rural roads on which platooning is difficult to achieve.

Payback
The long haul example (stage 1) sees cost savings of around $1.700 per year, requiring 13 months for a return on the initial investment. Stage 2 would require more than three years for a return on investment, while stage 3 would require almost six. Stage 4, because of a reduction in driver costs, would see a return after 28 months, while the complete removal of the driver at stage 5 would see the investment returned within 4 months. For the regional high traffic highway situation, stages 2, 3 and 4 would all require more than three years for the investment to generate a return, while for the regional low traffic scenario, a return on investment for all stages is well above a 3 year period.

“The payback time for fleet operators strongly depends on the use case", explains Walter Rentzsch, Senior Project Manager at Roland Berger who co-authored the study. “Trucks that operate on long-haul routes or regional trucks driving on trucking corridors can form platoons with ease and will see faster payback."

Pressures
The payback period is relatively slow for two of the scenarios in which trucks are active, and given how far off full automation the technology is (15+ years), the pull for development of the technology is expected to be slow from both fleet operators and OEMs. OEMs are concerned about legal conditions surrounding the technology, while some OEMs may baulk at the costs. Yet, besides cost benefits to fleet operators and the legalese surrounding on road regulation, the technology also has the capacity to significantly improve safety on the road.

Stephan Keese, Senior Partner and responsible for Roland Berger’s Americas Commercial Vehicle practice, concludes "The technology will be available well before the trucking industry will embrace it. A legal framework needs to provide stability for an industry that will be significantly reshaped in the way we operate trucks today."