Over the past three weeks we looked back at 2023. I first wrote about what I thought were the biggest or most interesting supply chain stories by month. (See The Top Supply Chain Stories by Month 2023.)
Next we featured our popular look at Supply Chain 2023 in Numbers and Charts.
Finally, last week we analyed the performance of supply chain and logistics-related stocks in 2023, based on SCDigest's weekly index. (See Supply Chain and Logistics Stocks Performance 2023
Gilmore Says.... |
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| Netting it out, despite the tens of billions of dollars in R&D, “the ROI for achieving driverless semi-trailer trucks does not appear to support the investment,” Kina observes. |
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Now we start to look forward, with some supply chain predictions for 2024 and beyond. We start with some of what Gartner calls "predicts," more specificlly its predictions for the practics of logistics and technology adoption. We summarize three of those five predicts below.
First up, four Gartner analysts - Matthew Matsko, Brock Johns, Sergio Coelho, and Michael Ryan – predict that by 2029, union representation within logistics will double, cementing the shift in power favoring the frontline worker.
The analysts note that 14.5% of logistics and warehousing employees are union members now, well above the 6.0% membership rate across all private-sector professions.
I will note that I believe these numbers are primarily the result of a relatively high number of truck drivers and port workers being unionized, and that the percent of warehouse worker unionization may actually be less than the overall share of 6%.
Regardless, factors are moving in labor’s favor, Gartner says, with persistent inflation, increased complexity and global setting “the stage for organized labor unions to attract a new generation of members.”
It notes that private sector union membership in California has climbed a full percentage point in the last five years. Some see California as a precursor, providing a preview of things to come in the broader U.S.
Gartner also references the by now well-cited challenge companies have attracting and keep logistics and manufacturing workers, with fewer laborers “willing to fill some of these roles due in part to increased workloads and low wages.”
A growing number of logistics workers are thus likely to organize, Gartner believes. This will have a number of implications, including of course, an increase in wage and benefit costs.
Beyond that, Gartner says we’ll likely see higher risk of future work stoppages, slowdowns and strikes could impede operations. I’ll note in 2023 that both UPS and West Coast dock workers got to new contracts without any strikes or other disruptions – but that was largely due the two unions getting most of what they wanted.
The Gartner analysts also expect higher unionization rates to result in increasing resistance to the use of automation and autonomous solutions in both transport and the warehouse, delaying digitization efforts.
Up next, Gartner analyst Chris Kina isn’t bullish on the near-term prospects for autonomous tracking, predicting that by 2029, the adoption rate of driverless commercial trucks will represent less than 5% of global fleets, having little impact on reducing drive shortages.
Kina notes that despite all the hype and massive level of investment, to date there arevery few commercial deployments of autonomous trucks that do not require drivers. I will note the company that appeared to be out front in terms of actual deployments -TuSimple – recently shut its US doors to focus on China, under questionable circumstances.
 Kina also notes that “Local, regional and national regulatory requirements, trade challenges, labor union resistance and restrictions will continue to create further headwinds and delays for autonomous truck deployment.”
Kina does see some limited progress coming in autonomous car adoption, but says that this will have little impact on freight trucks,
Trucks also have a much more challenging safety environment, given that trucks are, on average, 75% wider, five times longer and 20 times heavier than passenger vehicles.
“This requires autonomous vehicle systems to be more precise in positioning the vehicle on the road to avoid accidents a significant roadblock to adoption," Kina observes.
Politics and the regulatory environment will also stall progress. Kina says that constant regulatory battles, being fought locally and globally, “represent the most significant barrier to semi-truck autonomous deployments, as government approvals take years to draft regulations, vote into law and implement.”
Netting it out, despite the tens of billions of dollars in R&D, “the ROI for achieving driverless semi-trailer trucks does not appear to support the investment,” Kina observes.
In fact, Kina cites data estimating that 100% autonomy (also known as Level 5 autonomy) would add less than 2% to a carrier’s net profit.
Kina says that instead, the real value of autonomous trucks to the commercial trucking market comes in the efficiency of the software that monitors and controls the truck’s performance, speed, braking and maintenance. This results in lower fuel consumption and maintenance costs and reduced GHG emissions – all of which will drive more value than saving on driver labor.
So, expect maybe level 3 levels of autonomy working with drivers in the cab for the foreseeable future.
Do you agree?
Ok, think I will end it there. Back with more predictions next week.
What is your reaction to these Gartner predicts? What numbers would you add? Let us know your thought at the Feedback section below.
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