Mike Shedlock

Stiff License Terms

Yes, the terms of the license are stiff including $5,000,000 insurance against personal injury, death, or property damage. And a test driver has to be able to take immediate control of the car at all times.

Nonetheless, the licensing is a big step forward. Totally driverless cars are but a single step away. All that needs to happen is for California to eliminate the requirement that someone has to be in the car at all times to take control.

A big issue is that radar can detect size and shape of objects, but it does not have human judgement regarding danger. For example, a balloon blowing across the road is a much different thing from a hunk of metal the same size sitting in the road.

Such difficulties will be overcome.

Incentives and Implications

The implications on the shipping business are staggering. A full-time truck driver might cost as much as $100,000 a year. The incentive to get rid of millions of full-time drivers is massive.

A July 2013 Truckers Report headline reads ATA: Self-Driving Trucks Are “Close To Inevitable”

However, the article itself dismissed the idea totally.

“People come up with these grandiose ideas,” says Bob Esler, a commercial trucker for almost 50 years. “How are you going to get the truck into a dock or fuel it?”

And then there’s loading and unloading. Pre-trip inspections. Signing for drop-offs and pickups. Making sure cargo is properly secured. Making sure the cargo that’s being loaded actually gets loaded. The list just keeps going on and on.

The Last Mile

Many of the objections in the above article have to do with the last mile. Let's assume someone has to load the truck. Let's also assume an actual skilled driver has to dock the truck and make the final delivery (arguably a bad assumption).

Yet, even if those assumptions are true, nothing stops a trucking company from having distribution facilities right off an interstate near major cities, where local drivers deliver the goods the last mile.

Why can't all but the last few miles be driverless even if a skilled driver is needed some step of the way for safety reasons?

Technology marches on at a breathtaking pace. We might actually see commercial driverless vehicles on the roads within a few years.

Mike "Mish" Shedlock
Read more at http://globaleconomicanalysis.blogspot.com/#F8Z8U7guFdRSPuWI.99

Mike Shedlock

Mike Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management.

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