Today there are over 3 million professional drivers in the United States. These individuals, who haul goods along the nation’s highways 24 hours a day, seven days a week, are integral to keeping our economy running. But what will the environment for truckers and the future of work 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 United States by 2030. The answers flew in in the Zoom chat…
People are pretty pessimistic about employment in the sector and make this simple calculation: autonomous vehicles are coming, so truck driver jobs are doomed. Like many simple conclusions, this one is the wrong conclusion for truckers.
Employment models are complex and involve many variables. When predicting the future of work, one must not fall into the tempting trap of quick answers. How new technologies will affect employment is nuanced and diverse, with each industry and function requiring its own analysis.
I believe that the number of truck drivers in the US will increase by almost 5% in 2030… and probably in 2040. I come to this conclusion by looking at three key drivers of employment in all industries, including trucking -Areas, look at: Technology, Infrastructure and Deployment.
First, we need to make assumptions about when autonomous trucks will be “road ready” (fully autonomous and able to drive without a driver). While technology continues to advance and autonomous vehicles have the potential to be much safer than most human-driven cars, the hurdles to a fully driverless vehicle remain high.
Those developing autonomous vehicles believe that 90% of the time they are ready to drive, the last 10% involves the incredibly complex work of solving edge cases. The “edge cases,” a technology term that refers to the problems that occur at the extreme ends of operations, are so vast for the technology (e.g. that autonomous trucks will NEVER be Road Ready.
I don’t take that position, but I don’t think there is a realistic scenario of Road Ready happening before 2025 and most likely not before 2030. Once Road Ready happens, we need to think about the necessary infrastructure for these trucks to actually be on the road. Charging stations, sensors, repair infrastructure and by far the most complex issue, the state and federal framework all need to be in place for the road to be finished.
What happens when an autonomous truck hits something or someone? What happens if the cargo is damaged or stolen? How is a flat tire repaired? All issues and infrastructure must be addressed before autonomous trucks can be widely deployed. My best case scenario is another ten years until the road itself is finished.
And then comes the action. So whether the autonomous truck is road ready (2025 or 2030?). The infrastructure is in place for the vehicle to actually be on the road (2035 or 2040?). Now the trucking companies have to buy them. That doesn’t happen overnight.
If Knight-Swift, the country’s largest trucking company, used a full 50% of its $500 million capital expenditure budget to buy new vehicles (i.e. forgo other investments it needs), it would still take 10 years until it spends the approximately $2.7 billion to completely replace its fleet of 18,000 trucks (assuming $150,000 per truck). History tells us they move slower and even then don’t replace every driver (2045-2055?).
There are more than 2 million trucks on the roads in America. $300 billion is needed to replace the entire fleet. That’ll take even longer since few truckers have Knight-Swift’s capital and the trucker isn’t overly profitable, with an industry average of 4% net margin. There’s also the possibility that many companies are not early adopters and will add a few more years while they wait and see the impact and true cost of change.
So the technology has to be ready, the infrastructure has to be in place, regulations have to be ironed out, and then hundreds of billions have to be spent to deploy the technology. In 15 years, and even 20 years from now, the likelihood of a mass displacement of truck drivers is very, very small.
Do you know that the real problem facing truck driver employment today is in the US? driver shortage! Many younger workers do not choose this profession. Perhaps because they are repeatedly told that truck drivers have no future. Our discussion should focus on how we are helping to fill the tens of thousands of jobs that are available today. That’s exactly what my friend and entrepreneur Jason Wang is doing with FreeWold, helping ex-prisoners get training and employment as truck drivers. This is the future of work.
Remember that the creation of a new technology does not lead directly to job losses. We need to look at the complex and industry-specific dynamics to make effective labor market forecasts of the future of work. Only with this analysis can we get a sense of how employment might adjust. Simple answers, while simple, are usually wrong.