Sunday , February 25 2018

Truck automation

Summary:
Two bits from Marginal Revolution on truck automation are so good they merit passing on here. Dan Hanson writes this amazing commentI wonder how many of the people making predictions about the future of truck drivers have ever ridden with one to see what they do?One of the big failings of high-level analyses of future ...

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Two bits from Marginal Revolution on truck automation are so good they merit passing on here. Dan Hanson writes this amazing comment
I wonder how many of the people making predictions about the future of truck drivers have ever ridden with one to see what they do?
One of the big failings of high-level analyses of future trends is that in general they either ignore or seriously underestimate the complexity of the job at a detailed level. Lots of jobs look simple or rote from a think tank or government office, but turn out to be quite complex when you dive into the details.
For example, truck drivers don’t just drive trucks. They also secure loads, including determining what to load first and last and how to tie it all down securely. They act as agents for the trunking company. They verify that what they are picking up is what is on the manifest. They are the early warning system for vehicle maintenance. They deal with the government and others at weighing stations. When sleeping in the cab, they act as security for the load. If the vehicle breaks down, they set up road flares and contact authorities. If the vehicle doesn’t handle correctly, the driver has to stop and analyze what’s wrong – blown tire, shifting load, whatever.
In addition, many truckers are sole proprietors who own their own trucks. This means they also do all the bookwork, preventative maintenance, taxes, etc. These people have local knowledge that is not easily transferable. They know the quirks of the routes, they have relationships with customers, they learn how best to navigate through certain areas, they understand how to optimize by splitting loads or arranging for return loads at their destination, etc. They also learn which customers pay promptly, which ones provide their loads in a way that’s easy to get on the truck, which ones generally have their paperwork in order, etc. Loading docks are not all equal. Some are very ad-hoc and require serious judgement to be able to manoever large trucks around them. Never underestimate the importance of local knowledge.
... a fundamentally Hayekian insight: When it comes to large scale activities, nothing about change is easy, and top-down change generally fails...
I would add silicon valley software companies, and media commentators to the think tanks and government offices, on the list of pundits that tend to denigrate the skill, knowledge and intelligence required of what are very wrongly call "low skilled" jobs. I note several times the "paperwork" required in trucking as well.

The comment was on an earlier MR post covering Alexis Madrigal in the Atlantic on self-driving trucks. Automation in any industry reduces costs and increases quality. These mean the industry expands, so labor demand may even grow. Think of the computer you're reading this on. Labor gets to specialize at the things people are good at, which is higher productivity, and wages rise.
Uber does not believe that self-driving trucks will be doing “dock to dock” runs for a very long time. They see a future in which self-driving trucks drive highway miles between what they call transfer hubs, where human drivers will take over for the last miles through complex urban and industrial terrain.
And fill out that paperwork.
if the self-driving trucks are used far more efficiently, it would drive down the cost of freight, which would stimulate demand, leading to more business. And, if more freight is out on the roads, and humans are required to run it around local areas, then there will be a greater, not lesser, need for truck drivers. 
The article misses the second, more important effect. As low-cost trucking expands, other businesses that use trucks expand, and they hire people too.

And I just googled "truck driver shortage" to get the latest media story to rediscover this fact. From NPR "Trucking Industry Struggles With Growing Driver Shortage",
The trucking industry is facing a growing shortage of drivers that is pushing some retailers to delay nonessential shipments or pay high prices to get their goods delivered on time.
A report from the American Trucking Associations says more than 70 percent of goods consumed in the U.S. are moved by truck, but the industry needs to hire almost 900,000 more drivers to meet rising demand.
It's a tough job.  Young people aren't going in to it. There are competing opportunities. My last Uber driver just quit long-haul truck driving. He earns a bit less, but gets to see his family every night.

(Of course we don't use the word "shortage" in economics unless there is a government-imposed price control. This just means wages will go up.)

Update: Thanks to the comment from Unknown below, here is the response from Tom T in MRs comments
This comment reminds me of the guy in Office Space who ends up helplessly screaming at the downsizing consultants, “I have people skills!”
It’s trying way too hard. Sure, the truckers do all of these things. But is there any reason to think that the self-driving AI won’t be just as good, if not far better, at confirming that the load is secure, verifying the manifest, monitoring vehicle maintenance, and interfacing with the weigh station? Does anyone really think a computer can’t split loads and optimize returns? Even accepting the dubious premise that the poor driver is somehow providing effective security by sleeping in the cab in front of the load, the whole need for that sleep-time security disappears when the vehicle is self-driving and doesn’t have to sleep. Truckers who are self-employed and have to do bookwork, taxes, and customer relationships will have a lot more time to devote to that end of the operations if they don’t also have to drive the truck. Loading docks that are ad hoc will find themselves either standardizing or paying extra for failing to do so, like every other aspect of an industrial, computerized world.
I’ve been a litigator for 25 years. At one time, we saw our profession as so paper-based and quirky and fact-dependent that it would always be safe from automation. Sure enough, OCR text recognition, keyword searches, and predictive algorithms completely changed the economics of document review. No one is immune from automation.
I heard somewhere, I forget where, the quip that the ones who really should fear automation are accountants, book keepers, and other fairly routine paperwork office workers. It sounds awfully sensible. Of course our government is pretty good at expanding the demand for paperwork!



John H. Cochrane
In real life I'm a Senior Fellow of the Hoover Institution at Stanford. I was formerly a professor at the University of Chicago Booth School of Business. I'm also an adjunct scholar of the Cato Institute. I'm not really grumpy by the way!

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