What Autonomous Vehicles Mean for Logistics Real Estate
Driverless trucks for long-haul travel are expected to front-run other autonomous vehicles, creating both risks and opportunities for the logistics real estate industry.
Long-haul trucking is forecast to move to autonomous vehicles first, as driving on a highway is easier to automate than navigating a complex urban environment. Also, there are significant business and consumer benefits to be realized that come with long-haul autonomous trucking, including more efficient supply chains and faster delivery to end consumers.
A major component of autonomous trucking is platooning, which is the linking of trucks together to create a train. Platooning enables trucks to coordinate their movements, thereby reducing wind drag and fuel costs. The growth of platooning will impact industrial real estate facility design.
Although full end-to-end autonomy is decades away, an intermediary step is closer: regional truck stops where human drivers step in to steer autonomous long-haul trucks through urban centers to their final destinations—the end consumer or retail store.
Platooning, which is being fine-tuned as it goes through regulatory scrutiny and approval, still feels like a distant possibility to many. Europe is likely to adopt platooning before the U.S, as the EU is ahead of the U.S. in addressing regulatory considerations.
When Will Autonomous Vehicles Become the Norm?
Research suggests that mass adoption of autonomous vehicles will start in 2030, reaching steady-state in 2045. This timeframe reflects a combination of the pace of development for underlying technologies and time entailed in addressing complex regulatory challenges.
In the case of autonomous cars, regulatory hurdles are considerable. Experts believe driverless vehicles are safer than traditional cars, but governing bodies don’t yet have data to support that sentiment. To prove that autonomous cars are safer than traditional cars, automotive companies need hundreds of millions of miles of data demonstrating improved outcomes.
The Math and Impact for Prologis
Autonomous trucks and cars are coming. They will impact our customers and ultimately Prologis. In 2015, logistics represented 8.3 percent ($1.4 trillion) of U.S. GDP. Trucking accounts for around half of that (~$700 billion). Advancements in autonomous technology will alter the math our customers use to make their site selection decisions. As transportation costs shrink, time may take precedence over money in location decisions, resulting in premium pricing and rising demand for infill locations.