Growing autonomously?

July 19, 2021

Despite the pandemic, the global commercial vehicle market is set for substantial growth, with the construction industry expected to play a pivotal part in these developments. This sector is also set to embrace automation.

According to the global market research store ResearchAndMarkets.com the global heavy trucks market is expected to grow from US$201,52-billion (more than R2 915-billion) in 2020 to US$221,85-billion (nearly R3 210-billion) in 2021 at a compound annual growth rate (CAGR) of 10,1%.

“The growth is mainly due to the companies rearranging their operations and recovering from the Covid-19 impact, which had earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that resulted in operational challenges,” it highlights in its piece “Heavy Trucks Global Market Report 2021: Covid-19 Impact and Recovery to 2030”.

It adds that the market is expected to reach US$330,32 billion (more than R4 775 billion) in 2025 at a CAGR of 10,5%.

“Growth in the demand for heavy trucks from end-users such as in construction, mining and other sectors is contributing to the growth of heavy trucks manufacturing market,” ResearchAndMarkets.com reports. “According to executives of leading truck makers, an increase in construction activities boosted the sales of tipper trucks, concrete mixers and other heavy vehicles.”

This sector is also set to reach autonomy before its on-highway counterpart as reported by Dr Jeremy Brown, venture capital investor at Foundamental – a global venture capital firm that backs technology advancements in construction and mining.

In his piece “Want a Glimpse Into The Future World Dominated by Autonomous Vehicles? Look No Further Than Off-Highway Construction Sites” Brown notes that, currently, vehicles do not fall neatly into two categories of “automated” or “nonautomated” because vehicles on the road today have some level of automation.

“What we are referring to are vehicles that are classified by the Society of Automotive Engineers International (SAE) as Level 4 and, perhaps even more so, Level 5. Vehicles sold today predominantly fall into Level 1 and Level 2 of SAE’s automation rating system.”

Level 1 vehicles have systems that can sometimes assist the human driver to conduct some parts of driving (such as assisted steering or acceleration/deceleration using information about the driving environment).

In Level 2 vehicles an automated system can conduct some of the driving, while the human driver continues to monitor the driving environment and performs most of the driving (examples: Tesla Autopilot, Volvo Pilot Assist, Mercedes-Benz Drive Pilot and Cadillac Super Cruise).

For Level 4 an automated system conducts the driving and monitors the driving environment without human interference, but this level operates only in certain environments and conditions (all aspects of dynamic driving with no human intervention).

And, with Level 5, the automated system performs all driving tasks, under all conditions that a human driver could.

“Some predict market-ready on-highway autonomous vehicles (AVs) of Level 4 and Level 5 within as little as five years,” says Brown. “We at Foundamental argue that it will take longer than that. We shouldn’t only consider technology but also the required regulation and policy that need to be legislated and enacted.”

He asks, will we see fully autonomous Level 5 vehicles this decade? “The answer is yes, but we have to look in another place: off-highway. An off-highway environment is more predictable, in a controlled setting, and requires less outfitted technology. We couple this with the fact that the industry will increasingly be impacted by labour shortages — placing the need for AVs front and centre.”

Brown notes that fully autonomous sites are already commonplace in Western Australia (capturing 75% of global demand for autonomous trucks), with some other large-scale activities in South America (Chile and Brazil).

“Compared to best-in-class manned operations, autonomous vehicles exhibit production, wage reduction and tyre life benefits. and tyre life benefit. We found an average increase in productivity of 30% via longer production hours (between 1 500 and 2 000 to 3 000 hours of operation by truck), reduced load and unit cost by 15% and improved tyre life to 40% since optimised controls reduce sudden acceleration and abrupt steering.

“The market is certainly there. The productivity gains are meaningful. Cost savings are realised. So, one might be wondering, is there a catch?”

The catch lies in the pricing. “Vehicle pricing is an important challenge, specifically from a pre-operational cash outlay perspective and the economic viability of new projects. In 2018, McKinsey and Company announced that they expect fully autonomous 250-tonne haulage vehicles to be priced at up to US$6 million. From our own analysis of data gathered from Australia, total implementation costs, assuming 10 trucks and 15 ancillary vehicles at a mine site, could be as much as US$13 million.”

Brown adds that this price would not necessarily be an obstacle for the larger mining operators, for example, those with more than US$50 billion market capitalisations.

But smaller operators would be slower to adopt at this price point, if at all. The task is made even more daunting by the fact that autonomous technology is simply a part of a larger vehicle, so this technology is an expensive addition to a global supply chain that is already costly and complex.

“Our cost-benefit analysis reveals that there are substantial monetary benefits related to productivity, wages and tyre life. While autonomous hauling system implementation would be on average US$13 million at a site with 10 trucks and 15 ancillary vehicles, the total benefits are calculated to be US$19 million. This indicates that investment into autonomous technology ultimately pays off. It’s increasing the overall productivity of the site and addressing the skills shortage that plagues the industry.”

The Technology Cards adds that another type of autonomous construction vehicle, called rovers, could also aid construction workers as they could follow them around carrying tools and materials. (The Technology Cards is an information portal that has been developed as part of a PhD project, of Dr Sidsel Ernstsen, with the Technical University of Denmark and NIRAS – a value-driven, multidisciplinary engineering consultancy.)

A few other benefits:

Improved safety, as the operator is detached from the machine and thereby is less exposed to shock, dust, heavy lifting and vibrations.
Improved labour productivity, as one operator can manage several machines.
Whereas autonomous cars are restricted by regulatory challenges before they can move to public areas, autonomous construction vehicles can be tested within enclosed industrial settings.
Tight construction schedules are enabled, as the machines can operate efficiently 24 hours a day.

With all of these benefits and possible innovation, it won’t be a surprise to see autonomous construction vehicles playing a pivotal part in the growth of the global commercial vehicle market.

It will be interesting to see how autonomy will grow in this sector and the market as a whole.