Tuesday, January 12, 2016

Self-driving trucks and the US economy

Earlier today, in an article on developing economic conditions, I noted that orders for new heavy trucks had collapsed.  I've also been discussing the future of the transport market in general with a few contacts in the industry.  It's noteworthy that many companies relying on the trucking industry - e.g. truck stop owners and managers, suppliers of goods and services to the industry such as motel operators, etc. - are investing heavily in new technologies and diversifying their business, in the expectation that the trucking industry is undergoing a 'sea change' that will destroy anyone trying to cling to the old ways.

That 'sea change' is automation.  Last year Medium reported:

According to the American Trucker Association, there are 3.5 million professional truck drivers in the US, and an additional 5.2 million people employed within the truck-driving industry who don’t drive the trucks. That’s 8.7 million trucking-related jobs.

We can’t stop there though, because the incomes received by these 8.2 million people create the jobs of others. Those 3.5 million truck drivers driving all over the country stop regularly to eat, drink, rest, and sleep. Entire businesses have been built around serving their wants and needs. Think restaurants and motels as just two examples. So now we’re talking about millions more whose employment depends on the employment of truck drivers. But we still can’t even stop there.

Those working in these restaurants and motels along truck-driving routes are also consumers within their own local economies. Think about what a server spends her paycheck and tips on in her own community, and what a motel maid spends from her earnings into the same community. That spending creates other paychecks in turn. So now we’re not only talking about millions more who depend on those who depend on truck drivers, but we’re also talking about entire small town communities full of people who depend on all of the above in more rural areas. With any amount of reduced consumer spending, these local economies will shrink.

One further important detail to consider is that truck drivers are well-paid. They provide a middle class income of about $40,000 per year. That’s a higher income than just about half (46%) of all tax filers, including those of married households. They are also greatly comprised by those without college educations. Truck driving is just about the last job in the country to provide a solid middle class salary without requiring a post-secondary degree. Truckers are essentially the last remnant of an increasingly impoverished population once gainfully employed in manufacturing before those middle income jobs were mostly all shipped overseas.

If we now step back and look at the big national picture, we are potentially looking at well over 10 million American workers and their families whose incomes depend entirely or at least partially on the incomes of truck drivers, all of whom markedly comprise what is left of the American middle class.

. . .

The only thing that could put a damper on this would be if the demand for truck drivers were to say... drive off a sharp cliff.

That cliff is the self-driving truck.

. . .

... it’s probably pretty safe to say driverless freeway travel is even closer to our future horizon of driverless transportation. How much closer? It has already happened.

On May 6, 2015, the first self-driving truck hit the American road in the state of Nevada.

Self-driving trucks are no longer the future. They are the present. They’re here.

There's much more at the link.

I've warned for some time that automation threatens many jobs currently held by humans.  Truck drivers are now directly in the crosshairs of the automation trend.  If you're in any industry dependent on the presence of human truck drivers . . . you might want to reconsider your options.

That's another aspect to the current economic crisis.  Many of those who've lost their jobs can't go back to them even if they wanted to, because automation is changing the nature of those jobs and they haven't developed their skills to keep pace with technological change.  That's going to become even more so in future.

Food for thought.



Anonymous said...

Look on the bright side, If a driverless truck should have an unfortunate event out on those long, lonely western roads, at least no human would be killed or injured.

A.B. Prosper said...

We think we have a recession and unrest now? Holy cow is automation going to maim the economy.

In the end it wouldn't surprise me if we either ended up with a collapse, even heavier socialism (say 70-80% of GDP is government) or a regulatory state that the Libertarians will choke on

Jonathan H said...

Years ago in Australia, it didn't take truck automation to destroy the local infrastructure (truck stops, restaurants, gas station, etc) but the "Road Train", a single tractor with several trailers, often 5, sometimes more, driver by a team 24/7 with their own tools, kitchen, and sometimes fuel supply - it destroyed many of the old family owned and operated stops in rural parts of the country.
The drawback is that when the Road train has an accident, it is a doozy - imagine a truck with trailers weighing over 200 tons with no brakes!
Australia has stepped up inspections and regulations in response.

Yes, self driving trucks are a possibility - but I doubt they will imperil jobs for many years. They have been under development by the military for years but have not been fielded except in a 'leader follower' configuration - like has been discussed with cars, the technology isn't there yet to deal with other drivers in traffic.
I could see a potential first step being to relieve drivers for long easy stretches of highway, an extension of the the way unmanned haulage is used in some mines.
The other reason I don't see them threatening jobs soon is the need for support and maintenance - unmanned aircraft operations typically involve MORE personnel than manned aircraft operations; the military tolerates the cost because it reduces risk and they don't have to make a profit.

David Lang said...


the cries that "automation will destroy the economy" have been heard since Eli Whitney came up with interchangeable parts.

@Jonathan H. Even significant improvements in gas mailage for the big trucks will drastically affect the supporting businesses.

and 'sock it to them' taxes going after the big companies that are the customers of the truckers aren't going to help any.

Old NFO said...

I see a massive retraining effort needed going forward, but who will do it? THAT is the question...

eriko said...

There is a Freighliner sales place south of me on the way to the range. When they took the space over 3 years ago there werea dozen or so new trucks in Freightliner baby blue. Now there is about 50 + another 25 lightly used in other livery along with a dozen trailers.

Sales are not going well.

Quartermaster said...

Truck sales at the moment is primarily driven by the economy itself, which is not doing well, in spite of the deceit of Obama's maladminstration. What would happen with automated trucking, however, does not bear thought.

There is a limit to growth from automation. Taking the truck driving jobs away will not be a good economic move. The map in the article linked shows 29 states in which the most common job is truck driver. Those states would be looking at massive depression, and it will not be confined to those states.

One can argue that such predictions have been made since Eli Whitney's idea of interchangeable parts, but those people had no idea what the real impact would be. The impact of taking the last major, good paying unskilled jobs away from that class of people will be devastating. We've already seen the result of the loss of manufacturing jobs, so we have a pretty good idea what the impact will be.

Fred said...

Those who drive truck are notorious conservative good ole boys. Libs hate, I mean HATE them and can't wait to destroy them and leave their families destitute. Think we are not at civil war yet? you are wrong.
Peter, Don't forget a CB when on the road, it's been a cultural lesson of the eye opening variety for me just to listen in.

Stephen J. said...

Automation is clearly a development that will have to be dealt with, but it should be borne in mind that there is an entire level of judgement and decision-making involved in something even as basic as truck driving that no machine will be able to foreseeably replicate. Selection of alternate routes in the event of unexpected road closure. Assessing other drivers' actions. Dealing with changes in weather and road conditions. Responding to remote instructions when the weather knocks out wireless/cellular communications. Etc., etc., etc.

Autopilots have been capable of launching, flying and landing jets for years; there are still human pilots in the cockpits because there are still decisions that humans have to make. (And people are already noticing the worrying trend that pilots who depend too much on autopilot support start losing the skills they need for emergency decisions.) All it will take is the first major road accident that happened because of circumstances the auto-driver couldn't understand or foresee, and the need for a human driver will be apparent again.

(That is not to say automation will not have an effect. What may occur is that the salaries one can reasonably expect from such jobs will go down, because the level of skill required may go down. That will not be a negligible effect. But the thing about automation is that what it changes are merely the type of skills needed, not necessarily the level of skill needed.)

Grog said...

Peter, the links relate to both of your posts, I commented here because the trucking industry is directly related to goods moved by ship.



When the container ships carry less product, as illustrated, there's less for the truckers to move, and that also has a ripple effect on the economy.