Like other industries, trucking is suffering from something called marketing myopia – a nearsighted focus rather than seeing the “big picture” of what its business really is about. That warning was delivered by Troy A. Clarke, chairman, president and CEO, Navistar International, in his address, Reimagining the Future of Commercial Vehicles, to the recent 2017 Technology & Maintenance Council (TMC) Annual Meeting & Transportation Technology Exhibition.
Navistar is a holding company whose subsidiaries and affiliates produce International brand commercial and military trucks, proprietary diesel engines and IC Bus brand school and commercial buses. TMC is the only industry association focused solely on truck technology and maintenance to help improve trucking efficiencies across North America.
Clarke said businesses fail because they are “too tied to the exact way they have been doing things” and don’t pay attention to what their customers need. Moreover, businesses don’t foresee the impact of new technologies that do a better job of meeting those needs.
In 2004, the two leading mobile phone makers in the world were Nokia and Motorola, noted Clarke. In June 2007, Apple introduced the iPhone. The company – which wasn’t even in the phone business, but in the music player business – came along with something very different and major mobile phone players like Nokia, Motorola, Ericsson and BlackBerry became largely irrelevant.
“They are not alone,” he said. “Entire industries have been put at risk by the offerings of new players that disrupt the status quo and shift the paradigm.”
Complicating matters, technology “is outpacing our ability to understand it fully, and that gets in the way of seeing where it may lead,” added Clarke.
Trends
Another challenge, added Clarke, is that businesses are focused on solving immediate problems rather than developing a vision for the future, which is essential. In planning for the future, he cautioned not to be myopic or a business could be at “risk of missing a really big paradigm shift and failing to take advantage of it.”
To avoid that fate, he said it is necessary to think about some trends now converging on trucking that will shape its future.
- Greenhouse gases emissions. Emission standards, a major concern in urban areas, are getting tougher and “we’re are moving to a city-dominated world,” Clarke said.
“By 2025, cities will account for 80 percent of energy use and of CO2 emissions,” he added.
In response, an increasing number of urban areas in Europe and other places around the world are setting themselves up as “low emissions zones” or even “zero emissions zones,” he noted. These zones restrict vehicle access or else charge a toll for vehicle entry, and he said this trend is likely to come to North America.
Clarke speculated that this could lead to a regional hub delivery structure wherein high-performance diesel big rigs would deliver freight on automated superhighways to a network of regional hub and spoke facilities. There, the loads would be broken down for delivery by high-performance electric vehicles to low-emissions zones or zero-emissions zones.
- Traffic congestion. Vehicle access to urban areas is becoming more of a challenge due to “exploding” traffic congestion, Clarke said. By 2030, traffic congestion in the U.S. is expected to increase by roughly 50 percent, and “drivers stuck in traffic aren’t productive.”
- Automated and connected vehicle technologies. These are leading to “tremendous improvements” in collision avoidance and collision mitigation, reducing the severity of remaining accidents, Clarke said.
Vehicle-to-vehicle and vehicle-to-infrastructure will improve highway utilization by regulating traffic to avoid congestion, plus reduce the risk of accidents even more. That means vehicles can be lighter in weight because they’ll have less need for protection against crashes, which will make for greater fuel efficiency or load capacity.
- Electricity. Electricity is shaping up as an increasingly predictable and stable commodity for many years to come, and unlike natural gas or hydrogen, it already has a full-fledged distribution network in place, Clarke said. What’s more, electric vehicles are much easier to maintain, as they contain considerably fewer parts than conventional vehicles.
“Are we rapidly reaching a real inflection point for electric trucks?” Clarke asked.
No Small Changes
While it is necessary to worry about today’s concerns, the industry must be thinking about where it is going, Clarke advocated.
“All of us have businesses that we want to see succeed in the future and not taken out of the equation by disruptors – companies that are hovering around our space today and not limited by their knowledge of our industry, but poised to capitalize on parts of the value chain.
“Given the pace of change in technology – and all the new players who have gotten involved in recent years – I think the changes ahead are not going to be small, incremental ones. The people who see the paradigm shift coming are the ones who are going to win.
“The market today is dominated by the people who saw the new paradigm coming before it happened,” he continued. “As history shows, the opportunity for a paradigm shift often comes from the industry itself, from the people on the ground who invent the new technologies.”
The people who invent those new technologies, Clarke said, also create a long-term, more sustainable goal for the business.
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