From Silicon Valley to Detroit, a well-publicized race is on to develop self-driving passenger cars. Congress is looking to pass legislation to create a national framework for ensuring safety and facilitating testing and demonstration, among other steps. But policymakers have paid far less attention to potentially more consequential advances in freight transportation, which plays an integral role in the economy by ensuring that goods and inputs get where they need to go as efficiently as possible.
The freight delivery supply chain is comprised of several industries, including trucks, ships, railroads, airlines (and, in the future, drones), which simultaneously compete and cooperate to make the system hum. Each of these industries is undergoing its own form of rapid improvement as technologies develop to increase efficiency and reduce costs. Federal and state policy can play an important role in advancing adoption of these innovations. But properly supervising rapidly developing technology also presents regulators with significant challenges to effectively ensure both safety and robust innovation; especially given the fact that each freight industry answers to a different authority, lawmakers and regulators should carefully consider the knock-on effects of any rules they draft.
On February 12, 2019, the Information Technology and Innovation Foundation held an event to discuss the potential of automation and innovation on the freight industry.
First, ITIF Senior Fellow Joe Kennedy presented findings from his June 2017 report, “How Regulatory Reform Can Advance Automation in the Freight Transportation Sector.” He emphasized that automation does not reduce jobs in the medium- or long-term, that it boosts productivity (a necessary factor for raising living standards), and that it produces better safety and performance outcomes than humans can. Overall, Kennedy stressed that automation is a process, not a sudden result, and that if the United States doesn’t lead in these technologies, other countries will.
Kennedy then discussed automation in freight transportation specifically. Currently, freight industries are experiencing a shortage of qualified workers, especially in trucking and airlines. In addition, industries both compete and cooperate with each other to transport millions of deliveries across the country, and each industry is controlled by a different regulator. This can bring its own set of challenges.
Kennedy suggested seven principles for legislators to adopt in order to adequately welcome automation:
- Welcome technology and recognize its benefits
- Acknowledge the other forces encouraging companies to act responsibly
- Allow for different technology futures, and accept that change—including technology—is constant
- Distinguish between substantially different technologies (in other words, tailor regulation to specific technologies rather than treating all of them the same)
- Prioritize regulation according to safety and innovation potential
- Improve the decision process
- Provide regulators with the necessary resources to understand the latest technologies, make timely decisions, and do adequate enforcement
Following Kennedy’s remarks, Thomas F. Jensen, senior vice president of transportation policy at UPS, spoke. He emphasized the need for a national framework on a transportation policy. “We need a network, not a patchwork,” Jensen said, referring to the often-confusing differences in states’ regulations.
In addition, he outlined the innovation in trucking that UPS is exploring, including platooning, truck automation, truck electrification, and truck connectivity. Overall, he emphasized that automation is an “evolution, not a revolution,” and that these new technologies can increase both productivity and safety.
Adrian Arnakis, senior vice president of government affairs at the Association of American Railroads, shared her perspective on freight innovation. She highlighted that, much like trucking, the railroad industry is interested in automation. She stated that policy is needed to both maximize and utilize technology. However, she expressed doubt that regulators and legislators are ready for these new technologies.
To show an example of an effective regulatory mentality, she quoted current Federal Railroad Administration head Ronald Batory: “Technology will move faster than the ink can be applied or dried on regulations. And if we don’t use technology, it will pass it up.”
Regarding legislation, she believes that while it should address risk management, it should not require that new technologies have zero risk, since that is impossible to guarantee. In addition, regulation should be performance-based rather than prescriptive, in order to give different industries more autonomy. Lastly, she emphasized the need for a federal framework of transportation policies.
Finally, Greg Rogers, director of government affairs and mobility innovation at Securing America’s Future Energy, spoke on the “fear of the new,” which makes some hesitant to adopting innovative technologies. To address this fear, he thinks it’s essential to look at the human element behind automation, namely the positive impact it will have on safety. In addition, he highlighted the financial benefits that automation will yield.
He also addressed the allegation that autonomous vehicles will have devastating effects on employment. Research that he was involved in indicates that a lot of these concerns are overblown. Most truck and bus drivers don’t just drive but do other tasks—such as inspections—as well; as such, an automated vehicle won’t replace them. In fact, the increase in the unemployment rate will be “far less” than what happened in the Great Recession.
Following their remarks, the panelists answered questions on how freight automation will impact different industries and the country as a whole.