by Elizabeth Hines | May 23, 2017 | Blog, Marketing, Social Media
If you’re a large company not using social media for all that it’s worth, you’re missing out on customers and business.
We know that the majority of businesses participate in social media — in fact, a dominant 88% of B2B marketers report using these platforms as part of their marketing programs. Large corporations, small businesses, and those in between are promoting their brands and engaging with customers online. Even companies within the logistics and supply chain industries are reaping the benefits of social media marketing.
The truth is, if your company is not participating in social media, you are at a disadvantage. Your customers, your employees, and your competitors are taking advantage of these technologies to conduct business in new, more efficient ways.
Content Marketing Institute’s new report on B2B enterprise companies (companies with over 1,000 employees) shows that large corporations are also jumping on the social media bandwagon. Here are some stats:
- 87% of B2B enterprise companies use LinkedIn
- 81% use Twitter
- 77% use YouTube
- 74% use Facebook
But when asked about the importance each of these channels to their organization’s content marketing success, 87% felt that email is still the most effective tool for distributing content.
What does that say to you? These enterprises are using social media for content distribution, but their heads aren’t in the social media game.
So, why should their social media efforts be turned up?
Let the numbers speak for themselves:
Businesses are using social media, so if your B2B enterprise company isn’t, you’re already behind the eight ball. Social media is a great way to distribute information to a vast audience in a quick, cost-effective manner.
Social media also allows you to get to know your audience in a more personal way. After a few weeks and months of committing to your content marketing strategy on social media platforms, you’ll know what your target audience likes and what they’re interested in. The more time and effort put into your social media campaign, the more refined and effective it will become.
And we can’t ignore that your competitors are already out there, happily exploring the online market share.
Social media platforms have already proven their worth and most companies, big and small, have embraced their value. If your enterprise company hasn’t, it’s time to get your foot in the game.
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by Elizabeth Hines | May 22, 2017 | Blog, Content Marketing, Marketing, Social Media
B2B enterprises with 1000+ employees face unique content marketing challenges that can hinder a program’s overall success.
Bigger isn’t always better. Or, maybe I should say, bigger companies don’t always have it easy.
Big marketing budgets and a big marketing staff have their perks — but they also have their share of challenges. The Content Marketing Institute’s 2017 B2B Enterprise Content Marketing Report, which surveys B2B companies with over 1,000 employees (enterprise marketers), brings many of these issues to light.
The challenges these enterprises face, of course, are quite different from those of their small- and mid-sized counterparts. Here are some of the top differences:
- 72% of B2B marketers agree that their organization is focused more on building long-term relationships than getting quick results. Only 58% of B2B enterprise marketers agree with that statement.
- 52% of B2B marketers agree that their leadership team gives ample time to produce content marketing results (which typically take longer than other marketing approaches). Only 38% of B2B enterprise employees agree that leadership supports their longer efforts.
- 69% of B2B marketers agree that their organization is almost always or frequently focused on creating content for an audience, instead of their brand. 47% of B2B enterprise marketers feel their focus on the brand.
Pressure to produce results quickly is a death sentence for content marketing. And being forced to create content for a brand, rather than a specific audience, can be detrimental to content marketing results. Yes, challenges facing these enterprise marketers are often as large as the companies for which they work.
Let’s take a look at some of the reasons why that is, and a few solutions for solving them.
3 enterprise-level content marketing challenges
1) Organization
While the CMI Report found that 88% of B2B enterprise companies are using content marketing, a mere 2% felt their content marketing strategy was “sophisticated.” Organization might have something to do with that.
Most enterprise organizations have staff that are responsible for multiple brands and product lines throughout the company. Their time is split developing strategies for different marketing programs. Smaller operations, on the other hand, can focus on a single brand, devoting time to developing and implementing a comprehensive strategy that the team can live and breathe — instead of toggling back and forth between programs all day long.
Solution: Outsourcing can be an enterprise’s best friend. A third-party vendor can dedicate itself fully to creating a content marketing strategy that best fits individual products or brands. And the vendor can even drive the strategy, if the enterprise’s resources are so taxed. Check out these 13 stats about outsourcing content marketing to learn more.
2) Clarity
It’s difficult to deem a program effective if there is no clear vision of success looks like. Yet, almost half (45%) of B2B enterprise companies feel their organizations lack clarity for benchmarking success. You can see the problem there.
Oftentimes, especially in larger organizations, the C-suite has a very different idea about what makes a content marketing program successful (i.e., leads and sales), whereas the marketers developing the strategy know that other benefits (e.g., increased brand awareness, social reach) have long-term value.
Solution: Education is key here. For one, set realistic expectations about the length of time it will take to generate tangible results from your content marketing program. Further, marketers need to learn to speak their bosses’ language when it comes to winning support for content marketing. They should regularly report on all progress to show how, over time, “smaller” victories (like growing social media engagement) translates to leads and sales. Check out our Monthly Marketing Reporting Template for some ideas.
3) Content Distribution
As more organizations recognize the benefits of content marketing, they’re ramping up production of content. In fact, 63% of survey enterprise-level respondents reported increasing the amount of content they produce from 2016. That’s great, but — the question is — does more content definitely equal better results?
The answer is not necessarily. Content distribution plays a huge role in getting the most out of what you’re producing. And here’s where the enterprise-level marketing problem lies: 94% of B2B enterprises are using email as their main distribution channel.
I’ve written before about how organizations spend too much time creating marketing emails. I believe organizations tend to stick with this content distribution channel because they see immediate results in the form of open rates and click-throughs. But the reality is that these companies are trying to squeeze water from the same well over and over again. At some point, they’re going to run out.
Solution: Don’t get me wrong: Email marketing is an important component of a well-rounded content distribution strategy. But so are publishing on social media and blogging (on your website and others!). These distribution channels help you reach new prospects who are searching for products and services like yours. Make sure your content distribution strategy includes a variety of platforms instead of just relying on one (like email) or just a few.
It is important to note that there are many B2B enterprise organizations that have highly successful content marketing strategies. Companies like Cisco and Boeing, who are committed to content marketing, have created ways to define what a successful content marketing program looks like and to effectively measure content marketing ROI.
The differences between B2B enterprise content marketing and B2B content marketing overall are tangible but not defining. These larger organizations have the ability to make changes that can redefine their content marketing programs and open the door to endless opportunities.
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by Elizabeth Hines | May 18, 2017 | Blog, Leadership, Supply Chain
Add these books to your summer reading list to stay on top of industry trends and jump start your professional development.
“Education is the passport to the future, for tomorrow belongs to those who prepare for it today.” Malcolm X
Nikki Vazeos, regional sales manager at Veritiv, a leading North American distribution company, requires all of her sales reps to read one book a quarter that deals with professional development, sales techniques, or distribution trends and write a brief summary on how it applies to their day-to-day business. I always have found this kind of assignment to be beneficial on many different levels: professional growth, staying on top of industry trends, and of course, continuing education outside of the office.
If you’re a supply chain professional looking to build your summer reading list, this post is for you. Here are 5 highly recommended books that will jump start your professional reading.
5 books for supply chain professionals
1) The Resilient Enterprise
The Resilient Enterprise by Dr. Yossi Sheffi, Elisha Gray II Professor of Engineering Systems at MIT and Director of the MIT Center for Transportation and Logistics, has become one of the most influential supply chain resiliency books since its publication. Though published back in 2005, the book is still extremely relevant using numerous case studies and cautionary tales of some of the world’s largest companies. Dr. Sheffi explores high-impact/low-probability supply chain disruptions and the tools companies can use to reduce the vulnerability of their supply chains while fostering an overarching culture of resiliency.
2) The Inevitable
The Inevitable by Kevin Kelly guides its readers through the 12 technological imperatives that will shape the next 30 years and transform our lives. Kelly provides an optimistic road map for the future, showing how the coming changes in our lives — from virtual reality in the home to an on-demand economy to artificial intelligence embedded in everything we manufacture — can be understood as the result of a few long-term accelerating forces. Kelly both describes these trends — flowing, screening, accessing, sharing, filtering, remixing, tracking, and questioning — and demonstrates how they overlap and are codependent on one another. These larger forces will completely revolutionize the way we buy, work, learn, and communicate with each other. By understanding and embracing them, says Kelly, it will be easier for us to remain on top of the coming wave of changes and to arrange our day-to-day relationships with technology in ways that bring forth maximum benefits.
3) The 360° Leader
The 360° Leader by John C. Maxwell offers an in-depth look at the application of leadership principles, even when you’re not the boss. Maxwell asserts that you don’t have to be the “main” person to impact your organization. The book suggests tangible ways to influence peers and superiors and become a more valuable member of your team.
4) Good to Great
Built to Last, a book published by Jim Collins in 1994, looks at 18 companies that have triumphed over time, and how long-term sustained performance can be built into a company’s DNA over time. In Collins’ follow-up book, Good to Great, he concludes that it is possible, but it takes a lot of hard work and dedication.
Collins and his team of researchers began their quest by sorting through a list of 1,435 companies, looking for those that made substantial improvements in their performance over time. They finally settled on 11 — including Fannie Mae, Gillette, Walgreens, and Wells Fargo — and discovered common traits that challenged many of the conventional notions of corporate success. At the heart of those rare and truly great companies was a corporate culture that rigorously found and promoted disciplined people to think and act in a disciplined manner.
5) Executive Presence
Executive Presence by Sylvia Ann Hewlett, a noted expert on workplace power and influence, shows you how to identify and embody the Executive Presence (EP) that you need to succeed. EP is a combination of qualities that true leaders exude, a presence that shows you’re in charge or deserve to be.
Articulating those qualities isn’t easy, however. Based on a nationwide survey of college graduates working across a range of sectors and occupations, Sylvia Hewlett and the Center for Talent Innovation discovered that EP is a dynamic, cohesive mix of appearance, communication, and gravitas. While these elements are not equal, to have true EP, you must know how to use all of them to your advantage.
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by Jennifer Hart Yim | May 17, 2017 | Blog, Current Events, Supply Chain
Legislation like the California Transparency in Supply Chains Act gives consumers tools to monitor companies who violate human trafficking and child labor standards.
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
The California Transparency in Supply Chains Act (hereinafter “California Transparency Act”) took effect in 2012. This state law applies to certain companies satisfying requirements as stipulated under the act. But if you are not doing business in California, does the law affect you?
The economy of California is big enough to be the 6th largest economy in the world, and her GDP is the largest in the U.S. Even though the California Transparency Act is state law, it seems inevitable that it will affect the U.S. economy in general.
Why Do We Need a Transparency Act?
Today, supply chain is a critical system in any business. The absence of one of its components could stop business production.
Such disruption can occur as a result of strikes or other work stoppages by laborers who have been trafficked or who are paid little or nothing for forced work. One good example is the Coalition of Immokalee Workers (CIW) representing tomato pickers in Florida. CIW has implemented a Fair Food Program, in which large retailers buying tomatoes pay a penny more per pound to fund better wages and to improve working conditions for tomato pickers. Since 2001, more than thirteen companies such as McDonald’s, Subway and Burger King have joined the program. But Wendy’s has not yet, causing the company to suffer criticism and boycotts from customers.
The need for such programs to improve working conditions is great, as tragedies such as Rana Plaza remind us. In 2013, the 8-story garment factory supplying to global brands collapsed in Bangladesh, killing 1,135 workers. Three months earlier, fire in another garment factory sewing clothes for Western companies killed seven workers, two of whom were just teenagers, ages 15 and 16.
Legally speaking, human trafficking and child labor are illegal in every country. 166 countries are parties to the Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Woman and Children (aka “the Palermo Protocol”). However, violations of these laws are commonplace.
Why? In most countries, using trafficked workers and child labor is punishable under criminal law. So when it occurs, who goes to a jail? Actually, no one goes to a jail. Just a fine is imposed on the company violating of law.
In addition to the demand for cheap labor and services, the lack of meaningful law enforcement makes these practices continue. Civil liability and monitoring by good citizens are the most effective ways to decrease human trafficking and child labor. The California Transparency Act will provide a systematic process to oversee companies and to impose civil liability on illegality.
The California Transparency Act
The California Transparency Act is the first state law in the U.S. specifically addressing slavery and human trafficking in supply chains.
It applies to any business with $100 million in gross worldwide revenues that is doing business in California, and requires any subject business to disclose its efforts to eliminate slavery and human trafficking from their direct supply chains. The disclosure must provide the information of retail sellers or manufacturers, including verification of product supply chains, audit of suppliers, certifying materials, maintaining internal accountability, and training.
Those violating this act will be subject to action brought by the Attorney General for injunctive relief. If you want to see how this system works, go to a company’s website that you think does business in California, such as Trader Joe’s.
Federal Supply Chain Transparency Act
Four years after the California Transparency Act was enacted, Rep. Carolyn Maloney (D-NY) introduced a federal transparency law, the Business Supply Chain Transparency on Trafficking and Slavery Act of 2014, but it was never finalized. She reintroduced the bill in 114th Congress, but it was referred to the committee and did not go forward.
However, the federal regulation required by president Obama’s executive order titled Strengthening Protections against Trafficking in Persons in Federal Contracts was published in 2015. New FAR (Federal Acquisition Regulation) prohibits several practices for contractors, subcontractors and their agents, including denying access to the employee’s identity or immigration documents, using misleading or fraudulent recruitment practices, etc.
Transparency Act in the E.U.
In 2014, the European Parliament enacted Directive 2014/95/EU, which requires that public interest entities with more than 500 employees report information regarding efforts they are making to manage social, environmental and governance-related issues. The disclosure includes a non-financial statement on policies, outcomes and risks relating to social matters, and respect for human rights. The non-financial statement must provide a description of the policies pursued by the organization, the outcome of those policies, the principal risks related to those matters linked to the organization’s operations, and non-financial key performance indicators.
No specific penalty for failure to comply is stipulated. However, the directive instructs member states to ensure adequate and effective means for the guarantee of disclosure on non-financial information. The directive entered into force in January 1, 2017. As of December 6, 2016, most member countries had taken legislative measures to abide by the directive.
One example is the U.K. Modern Slavery Act, enacted in 2015. Part 6 of the act, entitled Transparency in Supply Chains Disclosure, imposes certain disclosure requirements on businesses. The disclosure must include information about the organization’s structure, its business and its supply chains, its policies in relation to slavery and human trafficking, its due-diligence processes in relation to slavery and human trafficking, a risk of slavery and human trafficking and its steps to manage that risk, and training available to its staff. The duties imposed on commercial organizations by this act are enforceable by the Secretary of State bringing civil proceedings.
France also enacted legislation defining a duty of vigilance for parent companies and their subcontractors in 2016, according to a promulgated document in 2017. The law applies to companies operating in full or in part on French territory with at least 5,000 employees when the head office is located in France, or 10,000 employees when the head office is located abroad. The law provides that multinational firms carrying out all or part of their activity on French territory shall establish mechanisms to prevent human rights violations and environmental damages throughout their supply chains. If the company does not prepare a vigilance plan and fails to comply with the formal judicial notice, it may be sanctioned with fines up to €10 million. The amount of this fine may reach up to €30 million if failure to develop a plan leads to injuries that could have otherwise been prevented.
Conclusion
Many legislative measures have been introduced both domestically and internationally to maintain transparency in supply chain. Regardless of a number of efforts on supply chain transparency, one question is not yet clear: how these measures will affect the transparency of supply chain.
Someone might criticize that no powerful measure has been introduced allowing governments to control supply chains. However, I wonder why we think government has more power than people and communities to maintain supply chain transparency.
We consumers can nourish or contract business. Supply chain transparency law, including the California Transparency Act, will provide a tool for consumers to monitor companies and to take action when the laws are violated. That is why I am optimistic about future of the law.
About the Author
Soyoung Yook, J.S.D., Attorney at Law, New York, is an MBA candidate at the University of New Hampshire Peter T. Paul College of Business and Economics.
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by Jennifer Hart Yim | May 16, 2017 | Blog, Current Events, Manufacturing & Distribution, Supply Chain, Warehousing & Materials Handling
Despite significant technological advancement, drones may have a limited impact on supply chain optimization in the near future.
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
From the military designs of the early 20th century to modern commercial development in 2017, drones have been making their presence widely known in the market. While military drones may have paved the way for commercial drone development, they have quite different purposes.
Drones provide much value, where traditional alternatives (such as helicopters or planes) fall short. Drone usage in supply chain optimization is still in its infancy. However, I am not convinced that drones are the solution going forward.
Note: For my analysis, I will be focusing on commercial drone usage in the supply chain.
A Timeline of Major Military Drone Development
- 1918: Kettering Bug. First modern drone concept used as a “flying bomb.”
- 1935: DH82B Queen Bee. Used as target practice for anti-aircraft weapon training.
- 1964: Lightning Bug 147SC. Used for surveillance.
- 2001: MQ-9 Reaper. Used as a hunter predator.
Source
Drones provide many advantages, such as mobility, cost effectiveness, ability to move goods, and camera technology. Although drone development is rapidly advancing, many challenges currently exist. Limited battery life, constrained operational range, collision liability, proneness to hacking, and even invasion of privacy are all legitimate challenges.
Commercial Drone Fast Facts
- Made of light composite materials.
- Typically have two to five rotors.
- Controlled by either remote control or GPS.
- Flight time ranges, but generally falls between 12-27 minutes.
- Battery powered.
- Operational range varies from 200 meters to 7 kilometers.
Current Drone Usage in the Supply Chain
Large retailers such as Walmart and Amazon are already investing significant capital in drone technology. On December 6, 2016, Amazon successfully completed its first beta trial of drone package delivery, called Prime Air, in Cambridge, U.K.
Here’s how it works:
- Customers place their orders online as usual.
- The package is prepped at the regional fulfillment center.
- Drones are then dispatched from the center with the package.
- Customers place QR codes on their property to indicate the drop-off point.
- The package is delivered at the customer’s address within 30 minutes.
- The drone is operated by GPS and handles up to five pounds of cargo.
To reinforce this effort, Amazon is currently expanding Prime Air in other parts of the U.K., France, Germany, and Italy. In addition, the company is seeking up to 1,300 small warehouse locations across Europe, with a prioritization for facilities near urban areas.
Walmart, on the other hand, is taking a different approach to managing their supply chain. Instead of focusing on package delivery, Walmart is testing the use of drones to monitor inventory in their warehouses.
Employees currently catalog merchandise with hand-held scanning devices and often need to use forklifts in the warehouse. Instead, the drone could move up and down the shelves cataloging inventory at a much quicker rate. Walmart claims that the drones “could help catalog in as little as a day what now takes employees about a month.” This program is expected to begin in at least one distribution center in 2017.
What about Legal Issues?
In the United States, commercial drone usage is still pretty limited. Below is a highlight of Federal Aviation Administration (FAA) commercial drone regulations.
- Must have a Remote Pilot (no GPS allowed).
- Must be less than 55 lbs.
- Must undergo pre-flight check.
- Must keep aircraft in sight.*
- Must fly under 400 feet.*
- Must fly during the day.*
- Must not fly over people.*
- Must not fly from a moving vehicle.*
*Indicates that these regulations can be waived.
Supply chain drone usage in the United States is currently limited due to these regulations. In the future, I expect many of these regulations to ease or change outright with advancements in drone technology. When this will occur is unknown.
However, other countries such as the United Kingdom are quicker to enact regulations by virtue of the Civil Aviation Authority (CAA). As a result, companies like Amazon have already been testing drones for supply chain optimization there.
Significant Hurdles
Although drone technology is gaining much media attention, there are legitimate challenges to drone commercialization in the supply chain.
While many legislative bodies attempt to develop drone regulations, concrete legislation is lacking in many countries due to fluid technological changes. In order for the market to fully develop, a legislative framework needs to be established. Companies will be reluctant to invest significantly in drone technology until legal parameters are established.
Another challenge is in regard to insurance and liability. With potentially thousands of (unmanned) drones flying only hundreds feet above the ground, insurance will surely be required. In the event of a drone collision with individuals, property, aircraft, or other drones, who then is liable? If the drone is piloted by a human, would he/she be liable? On the other hand, if the drone is GPS-enabled, would the technology be to blame? Surely some of these questions will be answered in contracts between insurance companies and suppliers, but with such uncertainty, premiums will undoubtedly be high.
Then there’s the question of rural vs. urban delivery. Amazon Prime Air is predominately testing drone delivery in rural areas. However, 80.7% of U.S. and 90.1% of the U.K. population live in urban areas.
Package deliveries in urban areas are via mailbox, left by the door, or hidden (to avoid theft). In other words, human judgement is used to deliver the package most appropriately. For customers in large apartment buildings, drone delivery is very limited. Perhaps these limitations could be offset with designated landing areas on rooftops, despite the fact that additional effort by the customer may be needed to retrieve the package.
Last, but certainly not least, is the impact of weather conditions. Wind, rain, snow, and extreme cold/heat all impact drone performance. Since current drones are not very heavy, any significant wind will 1) blow the drone around making it harder to control, and 2) use additional battery life to remain stable. Since drones incorporate many electronic components, rain and snow increase the chance of malfunction.
Furthermore, most drones utilize Lithium Polymer batteries — these batteries are prone to weaker performance in extreme cold and heat. According to Batteryuniversity.com, most Li-ion batteries stop functioning below -4°F. Additionally, battery performance is reduced 40% at 104°F and 50% at 113°F. The combination of all these weather conditions certainly provides logistical challenges for drone delivery and supply chain usage.
Is There Any Hope for Drones in the Supply Chain?
The short answer is yes, but in a limited manner.
With the logistical and technological challenges regarding drone delivery, I just can’t see e-commerce firms effectively managing the process outside of rural areas with optimal weather conditions. In the future, this could change, but it would require significant legal, technological, and customer adjustment for the process to be superior over the current state.
However, drones open other opportunities for supply chain optimization, such as warehouse inventory management (as with Walmart), infrastructure monitoring, surveying, or even security. For example, shipping firms such as FedEx or UPS could utilize drones to monitor traffic and optimize drivers’ routes based on real-time data. Additionally, energy companies could use drones — as opposed to helicopters or planes — to monitor pipelines. Finally, engineers could use drones to inspect dams, highways, and buildings more efficiently.
I have no doubt that the drone market will continue to expand. According to Visualcapitalist.com, by 2025, the U.S. economy is expected to see an increase of $82 billion and creation of at least 100,000 jobs. However, their impact to supply chain optimization remains vague to me.
About the Author
Matt Steckowych graduated from the University of New Hampshire in 2011, with a B.S. in Business Administration and is currently enrolled in the part-time M.B.A. program. He is a Salesforce.com Administrator at John Hancock in Portsmouth, NH.
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by Jennifer Hart Yim | May 15, 2017 | Blog, Current Events, Supply Chain, Transportation & Trucking
Autonomous vehicles will be implemented gradually, and will serve to increase a truck driver’s productivity rather than replace the driver completely.
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
“If I were a truck driver, I’d be looking to make a career change.” This has been my first thought when considering the future of self-driving cars, or autonomous vehicles.
It seems that the rise of autonomous trucks is inevitable. The major players in the automotive industry are heavily focused on developing autonomous vehicles, and newcomers like Apple and Uber are joining in the pursuit. The required technology is advancing every day, and the financial incentives associated with commercial transportation and vehicle services provide an opportunity that will likely result in early adoption when compared to personal vehicles.
The U.S. trucking industry
The trucking industry is massive, and the United States economy is hugely dependent upon it. Truck driving is the most popular occupation in 29 of the 50 states, with 3,500,000 truck drivers in the U.S. This means that in most of the country, one is more likely to meet a truck driver than any other occupation.
Seventy percent of total U.S. freight tonnage, an equivalent of 10.5 billion tons of freight per year, is transported via trucking. Every product you purchase, consume, or see in a store is dependent on trucking.
Amazingly, 38,000,000,000 gallons of diesel fuel are consumed each year to keep goods moving in the United States. The industry generates $750,000,000,000 in revenue each year, and is expected to grow rapidly. The shear size of this market provides an incentive for innovation, and it is expected that autonomous trucking will remove significant cost from the supply chain.
The driver shortage
Despite the importance of the trucking industry, there are fundamental problems. It is expected that almost 100,000 new truck drivers will be required every year for the next 10 years based on industry growth projections, and trucking companies have already been complaining about a driver shortage for years. Industry growth will only compound this shortage.
This has led companies to focus on recruiting and retention, but it has been difficult to attract new participants to the industry. The industry is a comparatively “old” industry. One challenge is that to obtain an interstate CDL license, one must be 21 years old. When most young people graduate high school at 18 or 19, this forces years of idle time before one is even eligible to drive a truck. As a result, the industry is not an option for new graduates, and new graduates start down other paths.
The driver shortage is increasing labor rates in the industry, and labor already constitutes a third of the costs of transport. Autonomous trucking would help remove some of these costs from the supply chain.
Autonomous-vehicle technology
Autonomous vehicles are not a new idea. The concept has existed since 1920, but it is only recently that the technology has manifested itself in a commercially viable way. LIDAR and RADAR technology has improved in recent years, and advanced cameras by companies such as MobileEye can help a human-less vehicle see.
Perhaps the largest contributor has been improvements in software development and decision-making algorithims — technology that is still in its infancy, but rapidly maturing. Vehicle-to-vehicle communications have recently advanced and have facilitated “platooning,” or a single driver commanding a platoon of vehicles. Google, Uber, Apple, Tesla, Volvo, Mercedes and others are investing in the technology. Interestingly, the market literature for the Mercedes Future Truck 2025 is adamant that the autonomous vehicles will only aid a driver, and that the driver will remain with the vehicle for the forseeable future.
Challenges
Even with rapid technological advancement, there are challenges to the adoption of autonomous trucks.
The industry is highly visible to the public, and recent technological development has sprouted a wide-spread fear of automation. It is likely that any accidents related to self-driving vehicles will receive the utmost scrutiny in a very public forum. Further, truck drivers are faced with challenging, and sometimes even life-or-death, decisions as part of their daily activities. In the event of an accident, a driver sometimes must decide how to crash, and the results of these decisions may cause death to the others involved in the accident.
Imagine, for example, a situation where the driver must choose to avoid a vehicle in the road, hit a pedestrian, or direct the truck off the road into a barrier. In each situation, someone will be hurt. If we rely on automation to make these decisions, we must program the right decision. As the computer system making the decision will be forced to make this decision with limited and imperfect information, even if the system is programmed “morally,” it will be forced to make imperfect life-and-death decisions.
Also to consider:
- Will society be comfortable delegating these decisions to automation?
- Who will purchase a vehicle that might choose to kill its passengers?
- In these type of situations, who is liable? The programmers? The truck manufacturer? The trucking company?
- If there is no individual responsible for the accident and there is no threat of imprisonment, only of fines, does this change the current traffic accident paradigm?
These questions must be confronted before the widespread adoption of autonomous vehicles.
The threat to drivers
If we accept that these challenges are resolved, it seems that the threat to truck drivers from autonomous vehicles is limited. The concept of completely driverless trucks is based on a drastic oversimplification of the trucker’s actual job. Over the road trucking has been rated toward the middle of the top 100 occupations for risk of being automated by the Brookings Institute.
Truck drivers do much more than just drive the truck, such as taking inventory, inspecting loads, manipulating loading docks, and placing orders. Many of these tasks are much more complicated than just conducting a truck on the interstate.
In the future, the truck driver will be reimagined as a logistics expert. A slogan from OTTO, the self-driving company responsible for the recent Budweiser beer run, sums up the current direction of the industry well: “We want to make it safe for the driver to sleep from exit to exit.”
The consensus amongst industry analysts is that the trucker will remain with the vehicle for the forseeable future. Even truck driver labor organizations such as ATBS are embracing autonomous vehicles as a productivity improvement in their industry.
Conclusion
Given the rapid growth of the industry, the current shortage of truck drivers and the demand for new drivers over the coming years, it seems like truck drivers should not be afraid of losing their jobs to automation in the short term. Likely, autonomous vehicles will be implemented gradually, and will serve to increase a truck driver’s productivity rather than replace the driver completely.
It is expected that over one-third of the trucks on the road in 2025 will be heavily automated, but complete autonomy is still in the distance future. Autonomous trucks may help to relieve the industry driver shortage, but they are unlikely to displace the millions of Americans that depend on driving truck for their livings.
Jacob Rossman is a manufacturing engineer at a major pharmaceutical company. His passions include futurism and technology. He lives in Rochester NH, with his wife Whitney, dog, cat and two pet rabbits.
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