Driverless Trucks And The Industrial-Delivery Cycle
Updated: Mar 27, 2019
Article as originally posted on GlobeSt.com. Interview with Eric R.Smith.
ANAHEIM, CA—It might not be just long-haul trucks that are affected by driverless-vehicle technology; it could be the supply chain in general, with a preference to smaller, autonomous vans for personal delivery to residences for e-commerce, Voit broker Eric Smith tells GlobeSt.com. We spoke with Smith about the many ways the industrial sector could be affected by the advent of driverless trucks, including the delivery cycle, site location and building design and features.
GlobeSt.com: Where do we stand with the use of driverless trucks in the industrial delivery cycle?
Smith: The concept of driverless trucks is one of a number of technology disruptions within the industrial real estate sector that people are anticipating in the “near distant future.” Other disruptions include multi-level warehouses, ever-increasing ceiling heights, ever-improving supply chains, omni-channel, drones and more.
Despite all the speculation, it is unclear as to the exact timeline that fully autonomous trucks (SAE Level 5) will be ready, whether that be from a technological standpoint or from a legislative standpoint with the US Department of Transportation’s National Highway Traffic Safety Administration and/or state legislatures. As it stands, a number of state governments have already given the regulatory nod to fully autonomous vehicles; California is one of those states.
GlobeSt.com: How do you feel these vehicles will impact industrial developer and owner location choices for their buildings?
Smith: The potential for changing the industrial landscape with this technology alone is tremendous. Think of the savings in the supply-chain process that will occur: trucks that can run for 24 hours as opposed to humans who can run 11 hours and then need eight hours’ sleep, increased fuel efficiency from computer monitoring and reduction of labor costs of up to 75%. This means reduced drayage costs; therefore, developers can build further out from ports and other logistic hubs. Look at what we’ve seen with the explosion of e-commerce in the Inland Empire, the most dynamic industrial real estate market in America. Could we see the boom expand further out in the Inland Empire; Seattle; Houston; Oakland, CA; Norfolk, VA; and Savannah, GA? Most likely.
GlobeSt.com: How will driverless trucks change the design and features of these buildings?
Smith: While we can easily extrapolate that developers will be incentivized to build further from ports and other logistic hubs to save on land costs, it is not nearly as clear as to how this will impact design and features for new buildings. Will driverless trucks be 100% fully automated or will they require a driver to navigate the close obstacles and unknowns of loading/unloading and ingress/egress? Potentially, truck courts could expand. Then again with driverless trucks, more highly automated pick and pack, omni-channel systems, etc., we will likely see fewer employees; hence, less parking will be required for distribution warehouses and higher land coverages.
GlobeSt.com: What else should our readers know about driverless trucks and the industrial sector?
Smith: We could potentially stand to have a number of shakeups in industrial real estate with this technology. It might not be just long haul trucks that are affected; it could be the supply chain in general, with a preference to smaller autonomous vans for personal delivery to residences for e-commerce. It could also mean autonomous ride-sharing for employees.
It’s really an exciting time with all of the advancements the have been made in the distribution and warehouse segments of industrial real estate: higher ceilings, thicker slabs, energy efficiency, big-box spec development … and now driverless trucks. What’s next, drones?