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3 min. read
Many motorists cruising highways recently have likely found themselves stuck behind a truck that seems to be moving more slowly than usual. That perception is real. With diesel prices rising, truckers are dialing it back, trading speed for fuel economy, and in the process, subtly shifting the cadence of global supply chains.
“In the United States, trucks carry more than 70% of all freight,” says Penn sociologist Steve Viscelli, who studies the economics of trucking. “So, when diesel spikes, transportation costs rise, supply chains tighten, and everyday goods—from fresh produce to consumer electronics—become more expensive. But fuel is only part of the story.”
Viscelli talked to Penn Today about some of the challenges facing American truckers today.
Diesel’s incredible energy density makes it the lifeblood of logistics. A typical big rig weighs 40,000 pounds unladen, and legally, you can load an additional 40,000 pounds of freight on top of that. To move an 80,000-pound vehicle across the country, diesel is currently the only real way to do it.
When you look at energy-intensive, long-haul operations, diesel can make up over a third of your total costs.
When diesel prices spike by 20% or 25%, the effects cascade instantly. When those costs spike, logistics can account for approximately 8.8% of our GDP. A sustained spike has the potential to create a percent or two of inflationary pressure across thousands of categories of everyday items we all need.
It goes back to deregulation. We used to regulate trucking almost like a public utility to ensure a level playing field. Prices were collectively set, and the government made sure rural places didn’t get gouged by carriers.
Before the 1980s, trucking was a really good job where drivers easily made over $100,000 a year in today’s dollars.
Today, the baseline for new drivers is living out of the back of their trucks, driving around for weeks or months at a time, oftentimes making less than minimum wage.
Recently, we’ve seen a huge influx of drivers from all over the world, including undocumented workers and folks on visa programs. For example, sugar companies in Louisiana and Florida bring in workers from Latin America on visas, and states will issue them non-domiciled commercial driver’s licenses.
You also see a lot of domestic retail workers or laid-off manufacturing workers entering the industry in their 30s because they need a bump in pay or are unable to do the sort of physically demanding labor they were trained to do. They end up making a decent salary only because they’re working 14 hours a day, 12 days straight.
Self-driving trucks were developed because the military was spending a fortune—sometimes $100 a gallon—moving diesel to bases in Iraq and Afghanistan, and those fuel convoys were getting blown up.
Trains have done an incredible job more sustainably moving freight, offering labor efficiency and about six or seven times more fuel efficiency than diesel trucks. Because of that, moving goods by rail ends up being 10%, 15%, or 20% cheaper than trucking.
But if you take a third of the costs out of long-haul trucking (human labor) with robots and you pick up the extra speed and time of not having a driver who needs to sleep, suddenly trucks become more competitive than rail.
However, do we really want to see that much more freight pushed onto a much more diesel-intensive method, drastically increasing congestion, safety risks, and the wear and tear on our bridges and highways?
In the U.S., we just don’t plan transportation in an innovative way anymore, like the creation of the Transcontinental Railroad or the Eisenhower Interstate system; we just respond to where demand is by seeing where people are stuck and building around that to alleviate bottlenecks.
But because a self-driving 80,000-pound vehicle on a public highway really crystallizes the public’s anxiety about AI, this might be an easy political win.
There are alternatives, like having a human-driven truck lead a fully autonomous drone truck behind it. This doubles productivity while keeping a human there to do the hard stuff that computers aren’t good at.
The scale of this disruption is going to be tremendous. Self-driving technology started making headlines 10 years ago, and we still have no significant policy to respond to—let alone shape—the impacts.
Image: Jessica Kourkounis / Stringer via Getty Images
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