expressed here are solely those of the author and do not necessarily represent
the views of FreightWaves or its affiliates.
In the wake of 9/11, 11,000 U.S trucking companies folded. Outside
of hurricanes and earthquakes, the attacks on the Twin Towers and the Pentagon
were the largest insured losses in history. In an effort to regain control,
insurance companies raised premiums across industries with trucking taking a
direct hit. The notoriously slim margins of the trucking industry meant that
anyone who couldn’t get costs under control went under.
Today, the trucking industry is facing a similar vulnerability
as a result of COVID-19. This time, it’s unlikely cost cutting alone will steady
the industry. The current pandemic is exacerbating driver shortages and putting
a strain on the aging drivers holding up the world’s supply chains. When the
trucking industry rebounds, technology stands to play a critical role in its
The next few weeks are going to be hard — really hard. Most big
enterprises are in crisis evaluation mode, working overtime to assure
shareholders that everything is under control while taking steps to increase
Few CEOs had a pandemic preparedness guide sitting in their top
desk drawer. Companies are doing the best they can to respond with the
resources on-hand. Optional pilots and POCs are on hold in the most affected
industries. Innovation teams in some cases have been repurposed entirely to
serve as COVID response teams — searching for thermal scanners instead of RPA
tools. Their most immediate need is for solutions that can keep drivers safe
and help manage cash flow risks.
In the longer term, COVID-19 is forcing conversations around
autonomous trucking and remote work to the forefront of the industry. While
glitzy tech companies have been preparing for years with Zoom, Tandem and
Dropbox, trucking companies are for the first time grappling with what ‘remote’
means for drivers that already operate in the field.
“When a truck driver makes a delivery, he often gets out of his
cab and goes into a room to talk to the individual responsible for that
unloading facility,” explains Jeff McCaig, owner of Trimac Transportation, the
third largest tanker and dry bulk trucking company in North America. “We’re
saying don’t do that, do it through the window, do it through your phone but
avoid the contact.”
Remote technologies for industries like trucking need to be able
to effectively bridge the physical and digital worlds. This means better
communications technologies so trucking companies can do more with fewer field
resources. It also means better connecting stakeholders so more planning and
coordination can happen back at the office and less has to be done ad-hoc by
“Truck stops that have formerly been available to a driver as he
goes on longer haul, some of them are closing down,” McCaig adds. “How do we
make sure our drivers have places to rest, to eat and to use hygienic
Autonomous technologies are also moving from nice to have to
need to have. Trucking companies need options in the event that sick drivers
are unable to work. A successful response to COVID-19 hinges on keeping supply
chains functioning. We’re already allowing drivers to exceed federally mandated
driving time limits in cases where they’re carrying medical supplies. It’s not
infeasible to imagine autonomous trucks running some routes in areas where
normal traffic has been prohibited.
“The most tactical and strategic issue for trucking is the
availability of truck drivers,” explains Trevor Adey, vice president of Trimac
Digital. “Truck driver is the largest employer in Canada and one of the largest
in the U.S., but the role is not as appealing as it has been in the past.”
As trucking tech continues to grow hotter with recent rounds for
companies like Convoy, Flock, Emerge, CloudTrucks and Ike (among many others),
hundreds of new startups working on everything from autonomous trucks to
digital carriers need to be thoughtful about how their operations and value
propositions will evolve as COVID-19 reshapes the industry.
The next few weeks may appear bleak, with churn and sales cycles moving in the wrong direction. Fortunately, demand for trucking is nearly constant. There’s more than enough demand for food and pharmaceuticals to keep the industry humming. Many of the costs in trucking are variable, so while companies are seizing this opportunity to tighten their belts, it’s likely that trucking will emerge as one of the industries best equipped to ramp-up with technology coming out of this pandemic.
If you’re interested in learning more, check out the first episode of Future Proof which features both Jeff and Trevor from Trimac speaking at length about the themes presented above.
John Mannes is an investor at Basis Set Ventures, an early-stage
venture capital fund in San Francisco focused on artificial intelligence and