How to dramatically accelerate a more efficient trucking future
- Andrew Berberick, Nate Robert, Cofounders Baton
Our mission is to accelerate the adoption of more sustainable and cheaper transportation in the freight industry.
Tractor-trailers move just about everything in the US economy from the foods we eat to the goods we consume. One might think that in the low margin, highly competitive landscape of long haul trucking, market forces would naturally squeeze out all remnants of inefficiency. However, trucking is not nearly as efficient as it could be and we are all paying the price.
Environmental: Class 8 tractor-trailers consume 22% of all fuel used in the transportation sector. [3] 20% of these trucks are driving empty, [6] and roughly 1 billion gallons of fuel is wasted per year while trucks idle. [7] Transportation is the largest contributor to greenhouse gas emissions by sector, which means long haul trucking represents one of the largest opportunities we have to reduce US carbon emissions.
Congestion: We’ve all been there, stuck in traffic trying to navigate around an 18-wheeler, unsure of whether or not the driver sees us. Despite representing only about 1% of vehicles on the road, [2] trucks have a disproportionate impact on road congestion and accidents. [1] Depending on the road, heavy trucks can have between 3 and 15 times the impact on congestion as a passenger car. [5] Freight volumes are expected to increase by more than 40% by 2045, [3] meaning truck-related congestion is only going to get worse.
Cost of goods: One element that everything has in common is that it was moved by a truck at one point. The cost of what you own and what you will own is ultimately impacted by the efficiency of transportation. Inefficient transportation means higher prices for everything.
Within the trucking industry, the story is even bleaker.
Driver lives: 3.5 million truck drivers (the most common job in America) are expected to spend months away from home, work 11+ hour days, and live out of their trucks, all while earning “per- mile” rates that can dip below minimum wage on days spent waiting at warehouses and sitting in urban traffic. It’s no surprise that the industry is facing a severe labor crisis with an industry- wide driver turnover rate of 100%. [2]
Trucking companies (carriers): Struggling to retain drivers, stay competitive on rates, and run a complex business at 5% margins, trucking companies are barely staying afloat (650 went out of business in the first half of 2019 alone). [8]
One of the major reasons for this inefficiency is that long haul routes are comprised of two completely different environments, each with its own unique operating challenges. Drivers load and unload in congested urban areas and drive long distances on highways.
A better operating model
This end to end delivery model hamstrings trucking operations. Paid by the mile, carriers and drivers are incentivized to maximize the amount of time their trucks are in motion. With thousands of drivers moving from appointment to appointment across long distances, it is nearly impossible to optimally time delivery windows such that drivers avoid traffic bottlenecks and congestion at delivery sites. As a result, long-haul trucks consistently have to drive through peak traffic, and end up waiting an average of 3 hours whenever they load or unload at warehouses.
With Baton, our goal is to divide long haul routes into two segments — an urban “final mile” segment, and a highway-only segment — by placing drop zones before every major congestion bottleneck in the US where loads can be transitioned from highway vehicles to final mile vehicles.
This model will enable long haul trucks to drop off and pick up loads just off highways, reducing the amount of time spent idling and reducing the number of empty return journeys.
Because they are local, urban drivers have the flexibility to deliver off-peak when there is less traffic, reducing the amount of congestion on the road at any given time. Additionally, local drivers can more effectively coordinate with warehouses to deliver when there is less dock congestion, reducing the time it takes to load and unload.
Baton enables long haul drivers to spend more time on highways allowing them to earn more money with greater predictability on working hours.
With decreased waste, happier drivers, and improved asset utilization, carriers can run a tighter and more profitable operation.
This is ultimately reflected in the reduced cost of transportation, a tax that is baked into everything we purchase.
Accelerating the adoption of more sustainable, safer, and cheaper transportation
Solutions exist today that could nearly double the fuel-efficiency of trucks, but the industry is not adopting these solutions fast enough, if at all. [2] The primary reason for this is that carriers cannot guarantee good return on investment for these solutions across the entire operating range of long haul trucking. One could imagine dramatically more aerodynamic trucks with zero gap between the tractor and trailer and skirts that wrap underneath and behind the trailer to improve airflow around the vehicle. Trailer volumes could extend into the gap between the tires, or a single tractor could carry two trailers to improve capacity per vehicle. Unfortunately, these modifications either provide no benefit in urban driving or are prohibitive when it comes to driving on narrow streets with weight limitations and tight turns. Similarly, hybrid engines and electric vehicles could save carriers billions of dollars in fuel while reducing greenhouse gas emissions, but these alternatives are expensive and relatively uneconomical at high speeds along highways. No single carrier has enough scale to afford the infrastructure that would be necessary to split long-haul trucking into these two specialized segments.
By aggregating long haul fleets, Baton offers carriers the agnostic real estate network needed to split long haul routes and enable the adoption of more efficient and sustainable segment- specific vehicles.
Autonomous trucks herald the promise of safer roads and hugely decreased transportation costs. However for “level 5” autonomy to happen at scale on highways, in cities, and everywhere in between, engineers must design for the entire range of trucking with all the edge cases and uncertainty of urban traffic. As a result, autonomous trucking will be possible for highway-only driving long before autonomy works for full end-to-end delivery routes. For highway-only autonomous trucks to be utilized, transition zones are needed just off highways to exchange autonomous highway vehicles for local drivers.
Baton will accelerate the adoption of autonomous vehicles by simplifying the problem. In the future, autonomous vehicles will be able to drop off and pick up at Baton drop zones and human drivers can take loads the rest of the way. We will also allow for the piecewise development of autonomous final mile routes by enabling developers to deploy autonomous trucks on predefined segments with known obstacles.
Ultimately, we believe all of this and more is possible if the industry as a whole is able to shift away from a paradigm that hasn’t really changed since the early 1900s. With Baton, we want to enable an “everybody wins” scenario where drivers get home earlier with more pay, trucking companies earn more profits, roads are less congested, the carbon footprint of trucking is dramatically reduced, and the price we pay for every physical good is lowered.
[1] Dewen Kong, Xiucheng Guo, Bo Yang, and Dingxin Wu, “Analyzing the Impact of Trucks on Traffic Flow Based on an Improved Cellular Automaton Model,” Discrete Dynamics in Nature and Society, vol. 2016, Article ID 1236846, 14 pages, 2016. https://doi.org/10.1155/2016/1236846.
[2] Steve Viscelli, “Make Big Trucks More Fuel Efficient With Smarter Infrastructure Investments,” Kleinman Center for Energy Policy, University of Pennsylvania School of Design, 2017
[3] U.S. Department of Transportation. 2016a. “2016 Freight Quick Facts Report.” Federal Highway Administration. https://ops.fhwa.dot.gov/publications/fhwahop16083/index.htm
[4] U.S. Department of Energy. “SuperTruck Leading the Way for Efficiency in Heavy-Duty, Long-Haul Vehicles.” Office of Energy Efficiency and Renewable Energy. https://www.energy.gov/eere/articles/supertruck-leading-way-efficiency-heavy-duty-long-haul- vehicles
[5] “Comprehensive Truck Size and Weight Study.” U.S. Department of Transportation, Federal Highway Administration, Aug. 2000, https://www.fhwa.dot.gov/policy/otps/truck/finalreport.cfm.
[6] “Truck Driving Jobs Empty Miles vs Loaded Miles?” OTR Truck Driving Jobs & Reviews, 13 Sept. 2016, https://otrdriving.com/CDL-Driver-Resource-Guide/what-is-the-difference-in-pay- between-empty-miles-and-loaded-miles/.
[7] “Long-Haul Truck Idling Burns Up Profits.” US Department of Energy, 2015, https://afdc.energy.gov/files/u/publication/hdv_idling_2015.pdf.
[8] Leonard, Matt. “Number of Trucking Companies out of Business in 1st Half of 2019 Exceeds 2018 Total.” Supply Chain Dive, 4 Sept. 2019, www.supplychaindive.com/news/trucking- companies-out-of-business-half-2019/561459/.
