Why transportation players should look beyond city limits

Smart freight

It may not have the futuristic consumer appeal of a ride downtown in a gleaming, white driverless taxi, but we believe that road freight will be among the first markets to be disrupted by autonomous vehicles and smart technology.

It doesn’t take too much of a leap of the imagination to picture a world where freight is shipped autonomously by road between extra-urban distribution centers to be broken up into smaller, discrete loads for a variety of last-mile delivery options. Examples could eventually include drones and smaller autonomous units such as those that e-commerce players have tested, as well as autonomous, electric and robotically loaded and unloaded versions of the multi-drop vans that supermarkets and parcel couriers currently use.

The business case is already clear, and moving freight by truck between cities is simply an easier technological nut to crack — trials of semiautonomous road trains, where one master truck with a human driver is wirelessly linked to a number of driverless follower vehicles, are already taking place in several geographies.

Major highways have a more controlled environment, which is less challenging for the early generations of autonomous driving technology to cope with than busy urban streets. Dedicated lanes for autonomous vehicles on motorways are much closer to becoming a practical reality than self-driving vehicles that are capable of safely sharing congested city center roads with human drivers, cyclists and pedestrians. Similarly, in geofenced environments such as large industrial estates, manufacturing facilities and airports, autonomous vehicles are already proving that they can maximize the efficient use of existing road space and minimize costs.

But to really reap the full rewards of smart freight, the cargo itself — not just the vehicles — will need to be autonomous. Digital ID technology and smart contracts powered by blockchain solutions such as OpsChain Tesseract may enable containers that can generate their own bills of lading, for example, significantly reducing the costs and friction of traditional processes in warehouses and across national borders. 

Autonomous agriculture

Farming may not be considered the most tech-forward sector, but urgent cost and productivity challenges are prompting it to embrace a wave of innovation. According to UN estimates, the global population will hit 8.5 billion by 2030 (pdf) and 815 million people are already going hungry every day.

Like freight haulers, farmers operate in an environment that is naturally conducive to autonomous technology. Fields are generally traffic-free, and safe areas of operation can be readily geofenced. Trials of autonomous tractors and other farm machinery are underway in markets as diverse as Southern California and India, and the global market for autonomous farm equipment will hit US$180 billion by 2024, according to Market Study Report.

Movement is only one aspect of smart agriculture — the real prize is the fully Internet of Things-enabled farm — but we believe that autonomous vehicles will be the first piece of the jigsaw to be adopted. Equipped with the necessary sensors, they will ultimately become vital nodes on the farm network of the future. For countries where agriculture forms a significant part of the economy, the opportunities for smart and connected vehicle technology to improve productivity and reduce costs are substantial.

Making the most efficient use of resources will also help reduce agriculture’s impact on the climate. The Food Climate Research Network at Oxford University currently estimates that food production accounts for 20%–30% of all anthropogenic carbon emissions. 

New ownership models

Just as with Mobility-as-a-Service in cities, making the most of the shift to movement-as-a-service in extra-urban environments will require adapting to new ownership models. But this change could be realized more quickly in business-to-business rather than business-to-consumer applications because shared ownership can directly address many of the financial pain points currently felt by both road haulers and farmers, particularly around asset utilization. 

In road freight, the costs and delays associated with backhaul are a perennial problem. What do you do with a truck that has delivered its load but is now far from the next available job? It’s a choice between running on empty to make a new pickup or waiting for one to materialize locally; either way, this results in suboptimal asset utilization.  

Similarly, in farming, specialist machinery and equipment that can cost hundreds of thousands of dollars may only be required by an individual operator for a few weeks of the year, lying dormant for much of the time. 

In both cases, shared ownership would enable much-higher levels of utilization. A shared truck used by one operator could be picked up by another for an onward load; as a result, no one needs to wait for a backhaul or for the truck to return empty. Farmers could share ownership of specialist equipment and machinery, reducing both the size of the overall fleets required and the capital costs of providing them.

Platforms and marketplaces

Platforms and marketplaces intended for smart city applications could work just as well for these alternative opportunities and potentially deliver return on investment more quickly. Digital IDs can be attached to trucks and tractors just as they can to taxis and cars. Blockchain-enabled smart contracts can be applied to freight mileage and ploughing just as they can for a ride to the airport or rail station.

If every truck had a digital ID and was registered on the blockchain, freight haulage would become point-to-point rather than round-trip. Just as car club platforms currently allow you to book a car for a one-way journey, new business-to-business marketplaces and platforms would enable one-way bookings for cargo.