“Truck transportation drives our economy; goods movement fills our stores and supplies our factories. But those benefits come with costs that are causing rapid change.” –Bill Van Amburg, senior vice president, CALSTART
Change is definitely in the air these days in trucking – more so than usual. In the near-term, we’ll be dealing with a revision of hours of service (HOS) regulations by the Federal Motor Carrier Safety Administration (FMCSA) – an overhaul we’ll get into with tomorrow’s post.
Right now, though, let’s look at longer term issue that’s re-shaping this industry – how the truck itself, the very platform for the bulk of freight movements in the U.S. and indeed the world, is undergoing rapid change. Of course, one of the most visible (and expensive) of those changes deals with technology designed to reduce – if not eliminate – truck exhaust pollution.
But there are other factors, too, such as globalization of the truck manufacturing base, the rise of hybrid powertrains, and the integration of telematics into almost every system on a commercial vehicle.
“The trucking industry faces the dawn of a new era [and] the changes surrounding it are daunting, the need for transformation immediate and the challenges multidimensional,” explained Sanjay Rishi, vice president and global automotive/truck industry leader for IBM’s Global Business Services division.
In a new report, entitled The Global Truck 2020 Study: Transcending Turbulence, Rishi and co-authors Kalman Gyimesi, the industrial practice leader within IBM’s Institute for Business Value, and Connie Burek, and IBM business solutions executive specializing in heavy equipment and heavy trucks, say that truck brands known the world over (think Volvo, Peterbilt, DAF, as examples) face the risk of a slow death due to globalization.
[You can view a short video presentation about this report below.]
They also argue that sustainability concerns are bringing “hybridization” to the front and center of truck engineering work, while increased urban development is driving ever-increasing regulation of trucking by government.
“The industry is at a crossroads, unsure of its next steps toward globalization,” Rishi (seen below at left) explains. “Tomorrow’s winners must take decisive actions today in the areas of globalization, brand development, technology integration, partnerships and workforce transformation.”
The authors surveyed both fleet and truck OEM executives across the world and compiled some interesting data on what those worthies see as the major trends affecting the trucking industry.
Globalization is a big one, with 54% of the executives surveyed saying that globalization will be one of the most important external forces impacting the truck industry in 2020, up from 48% today. Truck manufacturers in particular are just beginning to establish their global footprint, according to the survey responses, while light vehicle manufacturers have already fought the hard battles of platform creation, process standardization and the development of global supply chains.
Another big issue that should come to no one’s surprise is this whole concept of “sustainability,” with 48% of respondents saying that sustainability will be one of the most important external forces in 2020, up from 32% today. Environmental and fuel efficiency standards along with new safety capabilities mandated by government regulations will force the trucking industry to change aggressively over the next decade.
Finally, there’s technology; something 71% of respondents said would be one of the most important external forces impacting the industry in 2020, up from 61% today. Technology will not be limited to the trucks themselves, either, but will be embedded in roads and traffic signals to increase the interaction and predictive analytical safety capabilities of these transport carriers.
[To download IBM’s entire Transcending Turbulence report – with all the nice charts and graphs – click here.]
One technology IBM’s experts believe will really re-shape trucking is telematics, which will in their estimation impact everything about commercial vehicles. “Truck manufacturers that effectively employ telematics to build solutions for their customers stand to successfully differentiate and redefine their brands,” Rishi said. “Telematics will reduce service time by allowing remote and faster diagnostics and also will enable prognostic capabilities and proactive servicing.”
IBM’s researchers note that today's vehicle diagnostic techniques typically require the technician to physically connect to the vehicle. However, it won't be long before telematics capabilities enable remote diagnostics of a vehicle's issues – even providing remote “fixes” when possible as well.
They add that truck OEMs are starting to use telematics to provide a real-time remote read of a vehicle's parameters, allowing for proactive service or other action based on the reading – allowing fleets to pull trucks off the road and into the shop before it ends up on the side of the road with a problem. I’ve written on this topic before and it’s a capability OEMs are trying to broaden more and more with their products.
IBM’s researchers also believe telematics should enable stronger solutions for vehicle safety that have traditionally been addressed through manual methods and training. For example, automated speed controls linked to the navigation system could slow a truck down when its driver approaches blind curves, or automated braking could be applied if a truck approached an exit with too much speed.
The big benefit in accident situations is the use of telematics not only to help avoid them but to record data that will be essential in protecting companies. This is one of the key benefits of “event data recorders” or “EDRs” – a type of “black box” used for accident reconstruction. Right now, such devices are in limited use and fleets and drivers alike deal with concerns over data privacy and how such information can be used in court, but it’s a technology I think will get more widely deployed simply to help fleets and drivers deal with litigation resulting from accidents.
But make no mistake – none of this will be easy. IBM’s Rishi in particular noted that the truck industry, burdened with heavy regulation and excessively cyclical market demands, has found it difficult to embrace major transformation. However, that is exactly what must happen to achieve a healthy, prosperous truck landscape by 2020, he contends.
“The truck industry is in for an interesting ride over the next ten years,” Rishi says. “Macroeconomic factors, such as globalization and economic stability, are forcing nations, industries and enterprises to reexamine policies and business practices to survive. The global labor force is changing profoundly in age, location and the way people work.”
He notes that truck companies face changes in the very environments in which their products function. Urban centers are developing rapidly, and space – or lack thereof – is a considerable concern. At the same time, government entities are exerting more and more controls over the movement of people and goods, Rishi explains. “Trucking companies must tread carefully in this ever-evolving ecosystem, all the while keeping in mind the growing focus on corporate social responsibility,” he notes.
In addition, technology continues to progress at breakneck speeds, with the truck of 2020 functioning in ways vastly different than today’s vehicle – with telematics and hybridization at the heart of these new functions. “Furthermore, technology progress is not limited to the vehicles themselves but extends to capabilities that will increasingly be embedded in roads, traffic signals, etc., allowing them to interact with trucks,” Rishi says.
As a result, the challenges facing the trucking industry – manufacturers and fleets alike – are complex, and overcoming them will take a significant transformation; one that will require strong leadership and decisive actions, he stresses.
“There is little time to waste,” Rishi warns. “The impact of the recent economic crisis will subside, but it could have longer-term implications for those who fail to invest in the future.”