There are over 3 million professional truck drivers in the United States today. Moving goods across the highways of the country 24 hours a day, seven days a week, these individuals are a vital part of keeping our economy moving. But for truckers and the future of work what is the environment going to look like?
I recently asked an audience — a virtual one of course — to guess how many people will be employed as truck drivers in the US in 2030. The answers flew in on the Zoom Chat…
People are rather pessimistic about employment in this sector drawing this simple calculation: autonomous vehicles are coming, therefore truck drivers’ jobs are doomed. As with many simple conclusions, this one is the wrong conclusion for truckers.
Employment modeling is complex, involving many variables. In predicting the future of work, one cannot fall into the tempting trap of quick answers. How new technologies will impact employment is nuanced and varied, where each industry and function require their own analysis.
I believe there will be a nearly 5% increase in truck drivers in the US in 2030….and probably in 2040. I come to this conclusion by looking at three key factors of employment in every industry including trucking: technology, infrastructure and deployment.
First, we have to make assumptions when autonomous trucks will be “Road Ready” (fully autonomous and capable of operating without a driver). While the technology is getting more advanced, and autonomous vehicles have the potential to be much safer than most human-driven automobiles, the hurdles to a fully-driverless vehicle remain high.
Those developing autonomous vehicles believe they are 90% Road Ready but the last 10% involves the incredibly complex work of solving for edge cases. The “edge cases”, a technology term that refers to the problems that arise at the extreme ends of operation, are so vast for technology (like how much braking power to allocate based on the cargo in the trailer) that one can make the case that autonomous trucks will NEVER be Road Ready.
I don’t hold that point of view, but I do not believe there is a realistic scenario that Road Ready occurs before 2025 and most likely not until 2030. Once Road Ready occurs, we need to think about the enabling infrastructure necessary for those trucks to actually be on the road. Charging stations, sensors, repair infrastructure, and by far the most complex issue, the state and federal regulatory framework, all need to be in place for the “road to be ready”.
What happens when an autonomous truck hits something or someone? What happens when the cargo is damaged or stolen? How is a flat tire fixed? All issues and infrastructure need to be addressed before autonomous trucks can be widely adopted. My best case scenario is another ten years before the road itself is ready.
And then comes deployment. So if the autonomous truck is Road Ready (2025 or 2030?). The infrastructure is in place for the vehicle to actually hit the road (2035 or 2040?). Now the trucking companies have to buy them. That doesn’t happen overnight.
If Knight-Swift, the nation’s largest trucking company dedicated fully 50% of its $500 million capex budget to new vehicle purchases (so forgoing other capex they need), it would still take them 10 years to spend the approximately $2.7 billion to replace their entire fleet of 18,000 trucks (assuming $150,000 per truck). History tells us that they move slower than this and, even then, not replace every driver (2045-2055?).
There are more than 2 million trucks on the road in America. $300 billion is needed to replace the whole fleet. That will take even longer as few trucking companies have the capital of Knight-Swift, and trucking is not overly profitable with industry averages of 4% net margins. There is also the possibility that many companies won’t be early adopters adding another few years as they wait and see the impact and true costs of change.
So the technology needs to be ready, the enabling infrastructure needs to be put in place, regulations need to be ironed out, and only then hundreds of billions need to be spent to deploy the technology. In 15 years, and even in 20 years, the odds of a mass displacement of truck drivers is very, very low.
Do you know the real issue facing truck driving employment is in the US today? There is a shortage of drivers! Many younger workers are not choosing this line of work. Possibly because people keep telling them that truck drivers have no future. Our discussion should focus on how we help fill the tens of thousands of jobs available today. Which is what my friend and entrepreneur Jason Wang is doing with FreeWold, helping the formerly incarcerated get trained and employed as truckers. That is the future of work.
Remember, the creation of a new technology does not lead in a straight and quick line to the elimination of jobs. We need to look at the complex and industry specific dynamics in order to effectively make labor market predictions on the future of work. Only with this analysis can we have a sense of how employment might adjust. Simple answers, while easy, are usually wrong.