Labor Market Relief, Autonomous Vehicles & Fuel Tax | Weekly News Update

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Last week the news cycle was busy with everything from autonomous vehicle technology to taxes. Great strides have been made in autonomous technology from multiple companies, while controversy over the proposed fuel tax emerges. A dynamic oil market and attention to Mexican energy market were also prevalent. Meanwhile capacity remains tight keeping upward price pressure on freight rates, and trucking hires surge.

Truck Labor Market Gets Good News, Both Human & Robotic

There was plenty of good news for the tight truckload labor market last week. Starsky Robotics, Uber and Waymo made headlines with their respective autonomous  trucks, while trucking grew its labor force at its fastest pace since 2015. Starsky Robotics became the first player in the autonomous truck space to drive in fully autonomous mode without a truck driver present in the cab of the tractor. A remote driver more than 100 miles from a small country road near the Town of Clewiston in Hendry County, FL, placed a bobtail tractor in drive, centered the truck in its lane and then put the truck in full autonomous mode for a seven mile un-manned jaunt at highway speed. Starsky Robotics’ aftermarket retrofit kit robotically controls the throttle, steering and transmission, mirroring the driver’s input from an office, usually up to 500 miles away.

Uber and Waymo also made headlines for autonomous trucks this past week. Uber’s  autonomous trucks are now doing actual work for customers via Uber Freight, Uber’s commercial cargo shipping on-demand app. The first runs are being done in Arizona, with regular hauls operating with both human drivers and autonomous trucks working in tandem. Meanwhile, Waymo announced its self-driving trucks would soon begin delivering freight for Google’s data centers in Atlanta. The trucks will not be completely driverless, but will be operating on public roads during the pilot.

A Fuel Tax on the American Independent Trucker?

The American Trucking Association has publicly stated its support of a fuel tax increase to fund infrastructure and raise revenue for the federal government. The argument for the tax considers deteriorating transportation infrastructure in need of investment. The ATA’s support of the tax suggests the tax will ultimately be good for trucking but its effects will not likely be equally distributed. Owner operators and small operators receive little to no percent of their freight from the contract market and therefore end up paying 100 percent of the cost of fuel, including taxes, directly out of the freight contract. In contrast, large carriers may end up ahead if a fuel tax is implemented; a carrier operating more efficiently than the base fuel efficiency incorporated into their DOE-dependent fuel surcharge (often 6.0 MPG) would help larger carriers use a tax increase to build margin. The other reason to think large carriers will disproportionately benefit from the fuel tax is because they will be more likely to have the necessary capital for investing in alternative fuels, such as electric, hydrogen and hybrid trucks, perhaps altogether avoiding the tax.

In Other News

3/4

Reuters: Global oil players flock to Houston as OPEC, U.S. shale tensions ease

The oil industry’s biggest names gather this week at CERAWeek, the largest energy industry get-together in the Americas, at a time when U.S. shale production is booming, global demand is rising and crude prices are at a sweet spot for both big U.S. producers and OPEC.

3/5

FreightWaves: A fuel tax increase is a direct tax increase on the American independent trucker

The American Trucking Associations (ATA) has come out in support of a fuel tax increase to fund infrastructure and raise revenue for the federal government. The discussion around a $.25/gallon fuel tax will affect trucking industry costs disproportionately.

Reuters: IEA sees U.S. oil output surge stealing OPEC share in next five years

U.S. shale oil output is set to surge over the next five years stealing market share from OPEC producers and moving the United States, once the world’s top oil importer, closer to self sufficiency, the International Energy Agency said on Monday

Reuters: Oil demand growth to shift to petrochemicals away from motor fuels: IEA

Strong global demand for oil and gas will shift in the next five years toward petrochemicals and away from motor fuels gasoline and diesel, the International Energy Agency (IEA) said on Monday.

Reuters: Shale oil growth to overwhelm U.S. refiners, fuel exports

Rising U.S. shale oil production will overwhelm the nation’s refining capacity, with three-quarters of the additional oil produced in the United States by 2023 shipped to Europe and Asia

3/6

Tech Crunch: Uber self-driving trucks are now moving cargo for Uber Freight customers

Uber’s  autonomous trucks are now doing actual work for customers via Uber Freight, Uber’s commercial cargo shipping on-demand app. The first runs are being done in Arizona, with regular hauls operating with both human drivers and autonomous trucks working in tandem.

Freightwaves: Shell, AirFlow Truck Company introduce their long-awaited Starship

The Starship is a futuristic-looking, but completely road legal, Class 8 tractor-trailer unit built through a collaboration between Shell and AirFlow Truck Company. Designed with super sleek aerodynamic panels made of carbon fiber, the truck features a full suite of advanced technologies as Shell and AirFlow worked to design a truck that would improve freight efficiency as measured by ton-miles.

3/7

Argus: New offshore wind deals signal brighter prospects

Momentum is building for the development of the offshore wind sector in France, Poland and Italy with utilities gearing up to develop projects and governments taking steps to improve framework conditions.

Argus: BP, others banking on Mexico fuel market

BP plans to make the newly liberalized Mexican fuel market its second biggest in the world, just behind the US.  With over 765,000 b/d of gasoline and diesel sales, the country is the sixth biggest fuel retail market in the world, according to IEA’s rankings, after US, China, Japan, Russia and Canada.

3/8

Commercial Carrier Journal: Starsky Robotics completes first known autonomous run without driver in cab

Starsky Robotics became the first player in the autonomous truck space to drive in fully autonomous mode without a truck driver present in the cab of the tractor. A remote driver more than 100 miles from a small country road near the Town of Clewiston in Hendry County, FL, placed the bobtail tractor in drive, centered the truck in its lane and then put the truck in full autonomous mode for a seven mile un-manned jaunt at highway speed. According to Starsky Robotics co-founder Stefan Seltz-Axmacher, “in our case our system is reliable enough that we didn’t need a person in the vehicle.” Starsky Robotics’ system uses software, radar and camera systems for autonomous highway driving, but solves the issue of final-mile delivery by removing drivers from the cab entirely and putting them in an office where they can remotely operate the truck from terminal to delivery. Starsky Robotics’ aftermarket retrofit kit robotically controls the throttle, steering and transmission, mirroring the driver’s input from an office, usually up to 500 miles away.

3/9

JOC.com: US shippers face unprecedented truck, intermodal cost hikes

The US economy is accelerating and with it so too are truck and intermodal rate hikes. After three quarters of steady economic growth, shippers should not expect relief soon, as many experts anticipate upward market pressure will persist into 2019. According to the JOC.com article, shippers will have to rigorously rethink how they ship goods, gather detailed data on their operations, and collaborate in order to last through performance pressures of an upward trending rate environment.

The Verge: Waymo’s self-driving trucks will start delivering freight in Atlanta

Waymo is expanding the scope of its self-driving experiments, announcing Friday that its autonomous trucks would soon begin delivering freight for Google’s data centers in Atlanta. The trucks won’t be completely driverless, but will be operating on public roads during the pilot, the company said.

WSJ: Truckers Boosted Hiring at Fastest Pace Since 2015

Trucking companies hired new workers at the fastest pace in nearly three years in February as operators rushed to keep up with a red-hot U.S. freight market.

This weekly publication is designed to highlight relevant industry news to provide professionals in the transportation, supply chain, and energy sectors with up-to-date information in a rapidly changing marketplace. This update is purely a compilation of industry news and as such, does not necessarily reflect the opinion of Breakthrough®Fuel. We do not warrant or guarantee accuracy or completeness of information. For additional information, please contact us at info@breakthroughfuel.com.

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