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Abu Dhabi, UAEFriday 14 December 2018

Trucking on the road to a technological revolution

The development of platooning is set to change the face of road haulage

Dubai-based Agility says the logistics industry is excited by the latest tech developments, especially in road haulage. Here, a Mercedes-Benz tests its Actros truck self-driving system. Marijan Murat / AFP
Dubai-based Agility says the logistics industry is excited by the latest tech developments, especially in road haulage. Here, a Mercedes-Benz tests its Actros truck self-driving system. Marijan Murat / AFP

The information superhighway, the essentially invisible network that underpins modern life, could soon be featuring some very obvious examples of cutting-edge technology.

"Platooning" is one of the latest buzzwords in the overland freight industry. The technology is a system whereby a lead haulage lorry guides a convoy of drone trucks following behind at close quarters, and it is an area one of this region’s - and the world's - biggest operators is keeping a close eye on.

For Bassel El Dabbagh, the chief executive (Abu Dhabi) of the Kuwait-based logistics major Agility, the promise of such systems offers more than just the realisation of a sci-fi nerd’s dream.

“It is definitely an innovation that is keeping everyone in the industry very excited and trying to see how they can adopt it,” he says.

“There are improvements [via platooning] on several fronts; efficiencies, cost reduction, health – lower emissions, it’s great.”

And Agility’s research has resulted in some encouraging data. “Our close marketing of this development has produced some numbers: autonomous [platoon] driving will increase productivity by around 30 per cent; the fuel efficiency for the trucks is estimated at [an improvement of] around 15 to 20 per cent - with platooning it reduces the drag [platooning vehicles travel much closer to each other than usual], allowing the trucks to be more efficient than regular trucks." In addition, trucks will be able to leave and join an existing platoon as and when required, or form their own. And Mr El Dabbagh says there are societal benefits, too. “Accidents also will decrease. So a huge cost saving [to the economy].”

On that point, major players in the development of platooning agree: "Our accident researchers estimate that 90 per cent of injuries caused by trucks that involve physical injury could be avoided using automation systems in the future," says Kivanç Arman, the automotive aftermarket regional director for Middle East and Turkey at Robert Bosch Middle East. "The technology isn’t fully mature yet, but depending on how it is configured, automated platooning could be ready to roll out in the next five to 10 years."

The efficiency improvements could produce some eye-popping fiscal benefits for the freight industry in this country alone.

“We estimate that in the UAE that US$6 billion annually will be cut from the cost of transport through platooning,” says Mr El Dabbagh.

Other companies are actively involved in developing the technology including Daimler and the Swedish lorry builders Volvo and Scania. Scania is testing a system that is a sort of halfway house between today's haulage and fully autonomous platoon technology. Scania's semi-autonomous platooning system brings together a number of trucks on motorways using electronic coupling technology. The drivers in trucks coupled to the lead truck and its human driver can work or rest during autonomous mode. Any driver in any of the trucks can act as lead at any time, meaning the vehicles can effectively always be on the move.

However, the challenge is not in the innovation, the challenge is in the adoption of the technology and the regulation changes such a move requires to make it a reality, Mr El Dabbagh says adds.

“This is where people have to be very aware that a legal framework needs to be developed, an insurance framework in addition to new roadway infrastructure. Until this happens autonomous driving or platooning will not be a reality.

“For instance, in case of an accident who’ll be responsible? That’s a big question that needs to be solved."

From an autonomous, or driverless, trucking perspective, Mr El Dabbagh points out that the roads themselves will have to be a part of the technological revolution – and in most places that means the state will have to get involved. “On the government infrastructure - the autonomous vehicles that communicate with the roads - the government needs investment on that front before it becomes a reality,” he says.

So is Agility, one of the world's leading providers of integrated logistics with more than 22,000 employees in over 500 offices and 100 countries, considering putting cash into autonomous technology itself?

“No, frankly, on the driverless technology we are not currently investing,” admits Mr El Dabbagh

“But through our [India-based] technology board we have a two-pronged approach - disruption within and disruption without, this is where we are investing in companies coming up with new technologies and as disruptors.”

Platooning is not the only area of overland freight that is in the midst of a technological revolution and, as part of its push into the brave new world of logitics, Agility has been active in financially backing some cutting-edge companies abroad. One such is the Brazilian start-up CargoX.

“This company has been called the Uber for trucks, it is doing pretty much what Uber does but for cargo,” says Mr El Dabbagh.

Indeed the analogy might have been inevitable, since the Uber co-founder Oscar Salazar is also one of CargoX’s investors. He sees the fragmentation in the Brazilian trucking market as a major opportunity.

“They don’t have the tools to talk to each other,” he says. “There’s a huge information asymmetry playing an important role there. If you show me a market with information asymmetry, I’m going to show you a $1bn opportunity.”

CargoX connects businesses that need to ship freight to the trucks have excess capacity.

“We are seeing already that this company is disrupting the Brazilian market and we feel that this could be replicated in the freight market,” says Mr El Dabbagh.

Brazil reportedly has an excess of between 300,000 and 350,000 freight vehicles, with lorries running empty 40 per cent of the time. So the goal is to reduce the number of empty trucks on the motorway, increasing revenue for truckers and reducing costs for freight owners.

The start-up has raised in excess of of $14 million. The funding was led by Goldman Sachs, with participation from investors including Agility, Valor Capital Group, Lumia Capital, the former DHL Express US chief executive Hans Hickler and Mr Salazar – who said that ultimately, the company will remain valuable when and if trucking moves to the autonomous, self-driving model.

Agility has also invested in a US firm called Hyliiom. Hyliiom set out to bring the advantages of hybrid energy to tractor-trailers by installing an intelligent electric drive axle on the trailer. The system uses regenerative braking to capture and save energy created when the vehicle brakes, similar to the KERS system used on Formula One racing cars, and then to reuse that energy to provide auxiliary power when needed, such as when the truck is driving up hills.

The company says its system results in about a 30 per cent fuel-use reduction, saving an average $1,300 per truck per month. In addition, the kinetic energy recovery system only takes between 30 and 60 minutes to install, the firm says.

“The technology isn’t particularly new but it is now being applied to trucks,” says Mr El Dabbagh, because of advancements in battery storage technology..

Such developments now make it possible for batteries able to store the power for trucks. As Mr El Dabbagh points out: “Tractors and trailers have a much higher weight and much bigger power demand [than electric hybrid cars, for instance] and require bigger batteries. The older technology did not allow that, heat built up and they burned or even caught fire.

“But in the last year or so we have batteries that can actually store this excess kinetic energy safely and use it to power the truck. That reduces fuel consumption by 20 per cent – which is huge.

These are the kinds of companies that we’re investing in."

Agility believes that this technology will succeed commercially in its own right, and that “we can accelerate value creation by using the technology in our own fleets and promoting the technology with customers around the world. This philosophy of finding multiple points of leverage is at the heart of our tech strategy.”

On the amount of money involved in Agility’s investments, Mr El Dabbagh is understandably coy. “I can’t comment on the size of investments we are making in such companies, he says.

"But these are good stakes, serious investments."