Trucker 1339 Taas

Trucking becoming more digitized every day

June 26, 2017
Transition from truck-as-a-product to truck-as-a-service key aspect of this digitization trend, says consulting firm.

The cornerstone of the trucking industry – the truck – is undergoing an all-encompassing “recalibration” of how it performs the key role of hauling freight in the U.S. and around the world.

And at the heart of that “recalibration” is the increasingly “digitized” nature of the services a truck can provide, according to research by global consulting Frost & Sullivan.

“For the longest time in this industry, it was all about the product; it was all about the truck and businesses were built around the truck,” explained Sandeep Kar, the firm’s global vice president for research and mobility. “But services are now dictating how a truck should be designed. As the old saying goes: products cost money [while] services make money. We are on the cusp of that change in the commercial vehicle industry between products and services, with the industry now moving more toward services.”

He said that if you take a look at how trucks are being designed today, and the kinds of technologies trucks are incorporating, the focus is on drivers, on technicians, on fleet managers, and, most importantly, on the end users.

That’s when you will realize that a service-based economy is now front and central in the commercial vehicle industry, Kar noted.

As a result, The growing importance of open telematics and digital solutions will eventually change focus of manufacturers and dealers from “truck-as-a-product” to “truck-as-a-service” or “TaaS,” explained Frost & Sullivan's Franck Leveque.

"By 2025, 63.5 million trucks will be connected globally,” he said. “igital freight solutions and open telematics technology will transform the trucking industry into a smarter, efficient, and productive sector,"

[Frost & Sullivan plans to hold a briefing on this topic on July 13, which you can register for by emailing your full contact details to [email protected].]

“The entire logistical network and value chain will be tightly integrated, giving rise to supply chain transparency, location of goods, and automated shipment matching,” Leveque noted. “Through digital logistics, the advents of new business cases are likely, outdating old and traditional business cases.”

He added that key challenges related to cost inflation and supply-chain demands are likely to increase “competitive pressure” on global truck sales, while at the same time, demand for more connected trucks will grow as they will play an “integral part” of future logistics and freight operations.

“With smart cities, smart trucks will be a necessity," he stressed.

Sathyanarayana Kabirdas, director of research at Frost & Sullivan, added that eventually OEMs will leverage “open architecture” platforms to build a marketplace for app-based service offerings.

“Portfolios will include diverse applications such as automated freight matching, video safety, and diagnostic services,” he added. “Telematics serve as the backbone in this transition by efficiently connecting shippers and [motor] carriers based on real-time location and load capacity status of trucks.”

“If you take a look at what the industry is focusing on today, from prognostics and platooning to autonomous driving and Uber for trucks, all of these technologies are electronics-enabled and all of these technologies are creating new service-based revenue opportunities,” noted Kar.

Yet he stressed that the problem with prognostics today is that the only information available in the truck is engine prognostics – because engines have an electronic control unit or ECU – and tire prognostics, because tires have tire pressure monitoring systems or TPMS.

“By and large, 95% of the vehicle is a dark zone. A vehicle cannot predict when an axle might break or when a transmission will overheat, and so on,” Kar pointed out. “Eventually, to get the full benefit of prognostics, the entire vehicle has to be under the prognostics umbrella.”

About the Author

Sean Kilcarr | Editor in Chief

Sean previously reported and commented on trends affecting the many different strata of the trucking industry. Also be sure to visit Sean's blog Trucks at Work where he offers analysis on a variety of different topics inside the trucking industry.

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