Autonomous vehicles present a huge change in the way Canadians work and live, and how Canadian companies conduct their business. This new technology can drastically impact Canadian supply chains for the better, decreasing costs and increasing productivity. Automobiles will soon become smarter, making way for bigger and better processes.
The Canadian Stance on Autonomous Vehicles
Unlike our neighbours to the south, Canada as a whole has done little to prepare for this impending new technology. Several states have already been researching, developing, and testing driverless vehicles. Canada has a lot of catch up on.
Although we seem to be behind, the eastern side of the country is starting to dip its toes into this field. In January of 2016, Ontario announced a ten-year pilot project to test fully automated vehicles. The province has also set aside roughly $3 million dollars for research into this disruptive technology.
Throughout the pilot, evaluations will be conducted periodically. During testing, individuals will remain in the driver seat at all times to monitor the operations of the vehicle. Drivers and the autonomous vehicles they sit in aren't exempt from any rules of the road and are subject to penalties if there's any failure to meet said rules. Eligible to partake in this pilot program are auto manufacturers, academic and research institutions, technology companies, and manufacturers of automated driving components.
From a public policy standpoint, Canada has little to no legislation regarding driverless vehicles. This lack of action could prove to be a problem in the foreseeable future as the implementation of the technology picks up its pace. The government has yet to set any specific regulations or implement a regulatory framework. Barrie Kirk, Executive Director of the Canadian Automated Vehicles Centre of Excellence, says the country did set aside some money for Transport Canada to create a regulatory framework back in 2016. However, "the provinces and territories are responsible for the operation of vehicles. Driver licenses and the Highway Drivers Act are provincial and territorial responsibilities, so the introduction of autonomous vehicles will require the regulatory framework by both levels of government."
Why Invest in Automated Vehicles?
For the supply chain industry, automated vehicles are the answer to a lot of questions, but mainly how to reduce long-term and short-term costs. While the initial investment of an automated truck may be high—a kit provided by Otto costs roughly $30,000—supply chain carriers can eventually see decreased costs.
Fuel expenses alone can save carriers a huge amount of money. With autonomous vehicles, it's much easier to reach and maintain the constant speed necessary for efficient fuel gains. Drivers, on the other hand, may drive slightly faster. The inventory would still get to the warehouse, but the trucker would burn more fuel in the process. It's estimated fuel savings in this area could be as high as 10 – 12% for driverless trucks. With large fleets that spend up to $1 million per day on fuel, even a 1-2% savings in fuel cost is a huge benefit.
Driverless trucks also reduce the cost of physical labour. When Canada does permit fully autonomous vehicles, carriers have the potential to save money on trucker salaries. We'll use Transforce as an example. Transforce has the largest trucking fleet in Canada with around 6,700 units. According to Living in Canada, Canadian truck drivers earn $35,000 - $50,000 per year. If half the Transforce fleet were autonomous vehicles, the company would save over $115 million dollars in driver salaries on the low end of the scale. On a relatively smaller scale, smaller carriers can save $100,000 per year if they were to get two driverless trucks and would save that amount each year following.
Canada has a lot to do before autonomous vehicles make it onto our highways. Ontario is stepping forth as Canada's leader in this field with their pilot program. Once this technology is given the green light, though, Canadian supply chains will see a big decrease in overall costs.