Logistics Crisis Fueled Experiments... Which City Leads Autonomous Trucking? [Next.Jjin]

[Asia Economy Reporter Jeong Hyunjin] Over the past two years of the COVID-19 pandemic, the world has struggled with logistics difficulties. The United States is a prime example of a country facing a complex mix of supply shortages, logistics bottlenecks, and labor shortages. This year, logistics challenges continue. U.S. retailer Walmart has even announced it will offer truck drivers a starting salary of 130 million KRW (approximately $110,000). Given this situation, experiments with autonomous trucks that move without drivers are actively underway in the U.S.

If autonomous trucks that do not require rest periods transport goods, they could operate around the clock, traveling nationwide 24 hours a day. From a business perspective, as the technology develops, efficiency is expected to increase and logistics costs to decrease. Based on this, global corporations are pouring investments into the sector, and the U.S. autonomous truck industry is expected to grow rapidly over the next decade, expanding to a scale of $250 billion to $400 billion (approximately 325 trillion to 520 trillion KRW) by 2030.

For autonomous trucks to operate independently without drivers, society must prepare in many ways. In April, U.S. economic media Fortune cited experts saying that for autonomous trucks to function, it must be confirmed that they operate reliably even in extreme weather, infrastructure such as road internet connectivity must be established, and related laws and regulations must be revised. Regarding autonomous truck experiments, there are differences among U.S. states. Let’s take a look at which U.S. regions are attracting companies and examine the current status of autonomous truck experiments.

Texas, the 'Logistics Hub' with the Most Interstate Highways in the U.S.

Texas has the most interstate highways connecting states in the U.S. It borders Mexico to the south and is located centrally on the busiest freight route in the U.S., the Atlanta-Los Angeles corridor, which sees over 8,500 freight trucks daily. Consequently, demand for autonomous trucks is naturally the highest here. A major foreign media outlet reported last month in an article titled "How Texas Became the Promised Land for the Autonomous Truck Industry" that numerous autonomous truck developers, including Waymo Via (a Google subsidiary) and Aurora (invested in by Hyundai Motor Group), are conducting experiments in Texas.

Autonomous driving company Aurora testing its autonomous driving truck system in September last year [Image source=Reuters Yonhap News]

According to major foreign media, Texas passed a law in 2017 allowing autonomous trucks to be tested and deployed without special permits. This law also permits local cities to impose additional requirements while still allowing experiments. The autonomous truck industry has used this law to persuade regulators in other states. Waymo’s Aiden Ali Sullivan, a state policy manager, said, "There are many other states with ports and transportation hubs, but none have a regulatory environment like Texas."

Based on this, Gatik, a U.S. autonomous service provider, began experiments this month transporting paper plates and toilet paper to 34 Sam’s Club stores (a Walmart subsidiary) across the Dallas-Fort area in Texas. According to U.S. online media Axios, Gatik has partnered for years with large paper and pulp companies to automate deliveries and decided to test pre-set short-distance deliveries. Gatik said that for now, a backup driver will be onboard, but ultimately, they aim to achieve fully autonomous trucks without drivers.

Autonomous truck experiments in Texas are bustling, but challenges remain. Bloomberg reported on the 1st (local time) that Aurora is preparing to pilot about 20 autonomous trucks by the end of next year but has faced difficulties in addressing unexpected situations. They needed to familiarize the trucks with over 3,100 construction sites and road maintenance areas in Texas and ensure recognition of Texas-style horseshoe-shaped U-turn roads. This indicates that challenges remain before fully autonomous trucks can be introduced.

Are We Number One in Technology? California, Home to Silicon Valley

[Image source=AP Yonhap News]

California is home to Silicon Valley. As the city with the world’s leading technology, this region receives much attention for autonomous driving technology. Especially in the autonomous taxi (robotaxi) sector, California is ahead of other regions. Many analysts believe this foundation gives California an advantage in the autonomous truck field as well. Additionally, California has the second most interstate highways in the U.S. after Texas, which is another reason it is considered a key area for autonomous truck technology development.

However, California faces regulatory issues. The state began regulating autonomous vehicles in 2012 and allowed public testing of autonomous trucks in 2019 but included various regulatory provisions. For example, trucks eligible for testing had to weigh less than 10,000 pounds. During tests, drivers onboard had to publicly report how many times they disengaged the autonomous system. Texas does not have such provisions, leading to frequent comparisons between the two states.

In this context, at the end of last month, companies developing autonomous trucks such as Waymo, Aurora, and Uber submitted a letter to California regulators requesting relaxation of these rules. According to U.S. IT media TechCrunch, on the 27th of last month, 34 companies warned Governor Gavin Newsom that "without regulatory approval for the technology, California risks losing its competitiveness." California authorities said they would review the request, but it is unclear when legislative procedures will proceed.

Besides Texas and California, discussions are actively ongoing in other U.S. regions such as Arizona, New Mexico, Louisiana, and Nevada. However, many areas have yet to see company entry or regulatory easing, so experts predict it will take several years for autonomous trucks to spread nationwide. Developing new technology and applying it in reality requires resolving the problems it causes. Autonomous trucks must continue experiments in various regions to address anticipated issues. The most critical safety concerns have not been fully resolved. There are also concerns that autonomous logistics could lead to massive job losses among truck drivers.

Editor's Note[Next.Jjin] is a column that looks ahead to the real next phase of business, delivering news about how major companies are preparing for the future. From prominent issues to small but important hidden topics, we will uncover and explain them clearly to keep you informed.