In 2015, Daimler gained access to the State of Nevada to pilot trial 2 of its Freightliner Inspiration Trucks. The trucks can be used in autonomous mode to free up the driver\u2019s time to do higher level jobs, while the vehicle drives itself. [4]<\/p>\n
<\/h2>\nAutonomous Connected Trucks Features and Benefits<\/h2>\n
Autonomous Trucks will bring about multiple benefits to the consumers, road users and the logistics industry. [5]<\/p>\n
Consumers:<\/h3>\n\n- Freight will become drastically cheaper. There will be significant cost savings (~28%) from reduced drivers and fuel efficiencies from Autonomous Trucks as shown in Figure 1.<\/li>\n
- Consumers will be able to track shipment to greater granularity.<\/li>\n<\/ul>\n
Road Users:<\/h3>\n\n- Accident rates are expected to come down.<\/li>\n
- Route planning and optimization can be done automatically based on weather and road traffic condition.<\/li>\n<\/ul>\n
Freight and Truck Operators<\/h3>\n\n- Dynamic optimization of routes will be achieved.<\/li>\n
- There will be more maintenance alarms for the connected trucks with built in sensors.<\/li>\n
- Platooning optimizes fuel consumption.<\/li>\n<\/ul>\n
Environment<\/h3>\n\n- Emissions will come down due to better power consumption profiles.<\/li>\n<\/ul>\n
![\"\"](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-1-4.jpg\")
<\/a><\/p>\nFigure 1 Cost Savings due to Autonomous Trucks [5]<\/em><\/p>\n <\/p>\n
<\/p>\n
The opportunity<\/h1>\n
<\/p>\n
By introducing autonomous technology Daimler Trucks Division can strategically reposition itself in the logistics industry (Refer to Figure 2). It has the following 4 options at hand:<\/p>\n
\n- Operate as a Manufacturer (OEM)<\/em><\/li>\n
- Operate a manufacture and lease model<\/em><\/li>\n
- Operate a manufacture, lease and trucking business<\/em><\/li>\n
- Have a joint venture with a large logistic operator<\/em><\/li>\n
- such as FedEx, DHL, USPS etc. and cover the logistics supply chain<\/li>\n<\/ol>\n
![\"\"](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-2-2.jpg\")
<\/a><\/p>\nFigure 2 Logistics supply chain [5]<\/em><\/p>\n<\/h1>\nOption 1: Operate as a Manufacturer (OEM)<\/h2>\n
By playing in this field Daimler remains neutral to all downstream operators. This can help target a broad market. Daimler has a good brand name in this domain and projects quality.<\/p>\n
A downside can be if other players dominate the supply chain with joint ventures.<\/p>\n
<\/p>\n
Option 2: OEM + Lease Operator<\/h2>\n
This implies that Daimler will rent out its vehicles to Trucking Operators. The benefit is that Daimler is still playing in the field that is familiar in. This strategy works well if the number of truck operators increase.<\/p>\n
The downside of taking this position is that Daimler will have a lot of capital locked up.<\/p>\n
<\/p>\n
Option 3: OEM + Lease + Trucking Operations<\/h2>\n
Under this option, Daimler can bill the logistics company by miles booked. This can be a preferred choice for Daimler as the level of complexity in trucking operations goes down. By taking over Trucking Operations Daimler can build a Hubs and Spoke model (figure 3) for its trucking fleet and provide services to a lot of logistic companies.<\/p>\n
Additionally, by taking on trucking operations Daimler can get more field experience and enhance the software and hardware from the operator\u2019s lens.\u00a0In my view this may be Daimler\u2019s best option.<\/p>\n
![\"\"](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-3-2.jpg\")
<\/a><\/p>\nFigure 3 Hub and Spoke model for Autonomous Trucks [5]<\/em><\/p>\n <\/p>\n
Option 4: OEM + Lease + Trucking Operations + Logistics Operations<\/h2>\n
Daimler can enter further downstream into the logistics business as well by partnering with one of the major logistics operators such as FedEx, USPS, DHL etc. This will form a vertically integrated supply chain.<\/p>\n
There may be synergies as all information on the truck can be shared with the logistics operator and vice versa. This will enhance features like package tracking and real-time updates. The information can even be interfaced to the end consumers through electronic channels. Shipping costs can be shared in a live manner and better decisions on warehouse planning \/ truck load optimization. Additional freight can be added \/ delivered at hubs along the way. (Refer to Figure 4)<\/p>\n
There may be certain downsides such as limited potential to market the product beyond the Joint Venture partner.<\/p>\n
\u00a0<\/strong>![\"\"](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/Figure-4-2.jpg\")
<\/a><\/p>\nFigure 4 Freight matching information flow [5]<\/em><\/p>\n <\/p>\n
Outstanding Challenges<\/h1>\n
Daimler needs to select its strategic position in the market in the next 2-5 years so that it can establish all the relationships in the market, while pursuing it\u2019s 2025 goal of penetrating deep into the market. []<\/p>\n
However, there may be some regulatory hurdles as Daimler establishes into the future of autonomous technologies. [6]<\/p>\n
Truck drivers form one of the largest workforce in the US employing around 3 Million people across the United States. This raises ethical questions on replacing men with machines and reducing the number of jobs. [7]<\/p>\n
<\/p>\n
<\/p>\n
<\/p>\n
End Notes<\/p>\n
[1] Daimler AG, \u201cThe pioneer of autonomous driving – Mercedes-Benz Future Truck 2025\u201d,<\/p>\n
https:\/\/www.daimler.com\/innovation\/autonomous-driving\/mercedes-benz-future-truck.html<\/a>, accessed November 2017.<\/p>\n[2] Strategy&, Industry 4.0: \u201cHow digitization makes the supply chain more efficient, agile, and customer-focused\u201d, \u00a0https:\/\/www.strategyand.pwc.com\/reports\/industry4.0<\/a>, accessed November 2017.<\/p>\n[3] Danielle Muoio, \u201cHere’s how Tesla, Uber, and Google are trying to revolutionize the trucking industry\u201d, Business Insider, June 2017 http:\/\/www.businessinsider.com\/autonomous-trucks-tesla-uber-google-2017-6\/#these-projects-only-touch-upon-a-few-of-the-solutions-startups-are-pursuing-to-improve-long-haul-trucking-but-it-could-still-be-awhile-before-these-any-of-these-materialize-11<\/a>, accessed November 2017.<\/p>\n[4] Daimler AG, \u201cDriving autonomously through Nevada – Freightliner Inspiration Truck\u201d,\u00a0 https:\/\/www.daimler.com\/innovation\/autonomous-driving\/freightliner-inspiration-truck.html<\/a>, accessed November 2017.<\/p>\n[5] Strategy&, \u201cThe era of digitized trucking: Transforming the logistics value chain\u201d, https:\/\/www.strategyand.pwc.com\/reports\/era-of-digitized-trucking<\/a>, accessed November 2017.<\/p>\n[6] Conor Dougherty, \u201cSelf-Driving Trucks May Be Closer Than They Appear\u201d, New York Times, November 2017, https:\/\/www.nytimes.com\/2017\/11\/13\/business\/self-driving-trucks.html<\/a>, accessed November 2017.<\/p>\n
Road Users:<\/h3>\n\n- Accident rates are expected to come down.<\/li>\n
- Route planning and optimization can be done automatically based on weather and road traffic condition.<\/li>\n<\/ul>\n
Freight and Truck Operators<\/h3>\n\n- Dynamic optimization of routes will be achieved.<\/li>\n
- There will be more maintenance alarms for the connected trucks with built in sensors.<\/li>\n
- Platooning optimizes fuel consumption.<\/li>\n<\/ul>\n
Environment<\/h3>\n\n- Emissions will come down due to better power consumption profiles.<\/li>\n<\/ul>\n
<\/a><\/p>\nFigure 1 Cost Savings due to Autonomous Trucks [5]<\/em><\/p>\n <\/p>\n
<\/p>\n
The opportunity<\/h1>\n
<\/p>\n
By introducing autonomous technology Daimler Trucks Division can strategically reposition itself in the logistics industry (Refer to Figure 2). It has the following 4 options at hand:<\/p>\n
\n- Operate as a Manufacturer (OEM)<\/em><\/li>\n
- Operate a manufacture and lease model<\/em><\/li>\n
- Operate a manufacture, lease and trucking business<\/em><\/li>\n
- Have a joint venture with a large logistic operator<\/em><\/li>\n
- such as FedEx, DHL, USPS etc. and cover the logistics supply chain<\/li>\n<\/ol>\n
<\/a><\/p>\nFigure 2 Logistics supply chain [5]<\/em><\/p>\n<\/h1>\nOption 1: Operate as a Manufacturer (OEM)<\/h2>\n
By playing in this field Daimler remains neutral to all downstream operators. This can help target a broad market. Daimler has a good brand name in this domain and projects quality.<\/p>\n
A downside can be if other players dominate the supply chain with joint ventures.<\/p>\n
<\/p>\n
Option 2: OEM + Lease Operator<\/h2>\n
This implies that Daimler will rent out its vehicles to Trucking Operators. The benefit is that Daimler is still playing in the field that is familiar in. This strategy works well if the number of truck operators increase.<\/p>\n
The downside of taking this position is that Daimler will have a lot of capital locked up.<\/p>\n
<\/p>\n
Option 3: OEM + Lease + Trucking Operations<\/h2>\n
Under this option, Daimler can bill the logistics company by miles booked. This can be a preferred choice for Daimler as the level of complexity in trucking operations goes down. By taking over Trucking Operations Daimler can build a Hubs and Spoke model (figure 3) for its trucking fleet and provide services to a lot of logistic companies.<\/p>\n
Additionally, by taking on trucking operations Daimler can get more field experience and enhance the software and hardware from the operator\u2019s lens.\u00a0In my view this may be Daimler\u2019s best option.<\/p>\n
<\/a><\/p>\nFigure 3 Hub and Spoke model for Autonomous Trucks [5]<\/em><\/p>\n <\/p>\n
Option 4: OEM + Lease + Trucking Operations + Logistics Operations<\/h2>\n
Daimler can enter further downstream into the logistics business as well by partnering with one of the major logistics operators such as FedEx, USPS, DHL etc. This will form a vertically integrated supply chain.<\/p>\n
There may be synergies as all information on the truck can be shared with the logistics operator and vice versa. This will enhance features like package tracking and real-time updates. The information can even be interfaced to the end consumers through electronic channels. Shipping costs can be shared in a live manner and better decisions on warehouse planning \/ truck load optimization. Additional freight can be added \/ delivered at hubs along the way. (Refer to Figure 4)<\/p>\n
There may be certain downsides such as limited potential to market the product beyond the Joint Venture partner.<\/p>\n
\u00a0<\/strong><\/a><\/p>\nFigure 4 Freight matching information flow [5]<\/em><\/p>\n <\/p>\n
Outstanding Challenges<\/h1>\n
Daimler needs to select its strategic position in the market in the next 2-5 years so that it can establish all the relationships in the market, while pursuing it\u2019s 2025 goal of penetrating deep into the market. []<\/p>\n
However, there may be some regulatory hurdles as Daimler establishes into the future of autonomous technologies. [6]<\/p>\n
Truck drivers form one of the largest workforce in the US employing around 3 Million people across the United States. This raises ethical questions on replacing men with machines and reducing the number of jobs. [7]<\/p>\n
<\/p>\n
<\/p>\n
<\/p>\n
End Notes<\/p>\n
[1] Daimler AG, \u201cThe pioneer of autonomous driving – Mercedes-Benz Future Truck 2025\u201d,<\/p>\n
https:\/\/www.daimler.com\/innovation\/autonomous-driving\/mercedes-benz-future-truck.html<\/a>, accessed November 2017.<\/p>\n[2] Strategy&, Industry 4.0: \u201cHow digitization makes the supply chain more efficient, agile, and customer-focused\u201d, \u00a0https:\/\/www.strategyand.pwc.com\/reports\/industry4.0<\/a>, accessed November 2017.<\/p>\n[3] Danielle Muoio, \u201cHere’s how Tesla, Uber, and Google are trying to revolutionize the trucking industry\u201d, Business Insider, June 2017 http:\/\/www.businessinsider.com\/autonomous-trucks-tesla-uber-google-2017-6\/#these-projects-only-touch-upon-a-few-of-the-solutions-startups-are-pursuing-to-improve-long-haul-trucking-but-it-could-still-be-awhile-before-these-any-of-these-materialize-11<\/a>, accessed November 2017.<\/p>\n[4] Daimler AG, \u201cDriving autonomously through Nevada – Freightliner Inspiration Truck\u201d,\u00a0 https:\/\/www.daimler.com\/innovation\/autonomous-driving\/freightliner-inspiration-truck.html<\/a>, accessed November 2017.<\/p>\n[5] Strategy&, \u201cThe era of digitized trucking: Transforming the logistics value chain\u201d, https:\/\/www.strategyand.pwc.com\/reports\/era-of-digitized-trucking<\/a>, accessed November 2017.<\/p>\n[6] Conor Dougherty, \u201cSelf-Driving Trucks May Be Closer Than They Appear\u201d, New York Times, November 2017, https:\/\/www.nytimes.com\/2017\/11\/13\/business\/self-driving-trucks.html<\/a>, accessed November 2017.<\/p>\n
Freight and Truck Operators<\/h3>\n\n- Dynamic optimization of routes will be achieved.<\/li>\n
- There will be more maintenance alarms for the connected trucks with built in sensors.<\/li>\n
- Platooning optimizes fuel consumption.<\/li>\n<\/ul>\n
Environment<\/h3>\n\n- Emissions will come down due to better power consumption profiles.<\/li>\n<\/ul>\n
<\/a><\/p>\nFigure 1 Cost Savings due to Autonomous Trucks [5]<\/em><\/p>\n <\/p>\n
<\/p>\n
The opportunity<\/h1>\n
<\/p>\n
By introducing autonomous technology Daimler Trucks Division can strategically reposition itself in the logistics industry (Refer to Figure 2). It has the following 4 options at hand:<\/p>\n
\n- Operate as a Manufacturer (OEM)<\/em><\/li>\n
- Operate a manufacture and lease model<\/em><\/li>\n
- Operate a manufacture, lease and trucking business<\/em><\/li>\n
- Have a joint venture with a large logistic operator<\/em><\/li>\n
- such as FedEx, DHL, USPS etc. and cover the logistics supply chain<\/li>\n<\/ol>\n
<\/a><\/p>\nFigure 2 Logistics supply chain [5]<\/em><\/p>\n<\/h1>\nOption 1: Operate as a Manufacturer (OEM)<\/h2>\n
By playing in this field Daimler remains neutral to all downstream operators. This can help target a broad market. Daimler has a good brand name in this domain and projects quality.<\/p>\n
A downside can be if other players dominate the supply chain with joint ventures.<\/p>\n
<\/p>\n
Option 2: OEM + Lease Operator<\/h2>\n
This implies that Daimler will rent out its vehicles to Trucking Operators. The benefit is that Daimler is still playing in the field that is familiar in. This strategy works well if the number of truck operators increase.<\/p>\n
The downside of taking this position is that Daimler will have a lot of capital locked up.<\/p>\n
<\/p>\n
Option 3: OEM + Lease + Trucking Operations<\/h2>\n
Under this option, Daimler can bill the logistics company by miles booked. This can be a preferred choice for Daimler as the level of complexity in trucking operations goes down. By taking over Trucking Operations Daimler can build a Hubs and Spoke model (figure 3) for its trucking fleet and provide services to a lot of logistic companies.<\/p>\n
Additionally, by taking on trucking operations Daimler can get more field experience and enhance the software and hardware from the operator\u2019s lens.\u00a0In my view this may be Daimler\u2019s best option.<\/p>\n
<\/a><\/p>\nFigure 3 Hub and Spoke model for Autonomous Trucks [5]<\/em><\/p>\n <\/p>\n
Option 4: OEM + Lease + Trucking Operations + Logistics Operations<\/h2>\n
Daimler can enter further downstream into the logistics business as well by partnering with one of the major logistics operators such as FedEx, USPS, DHL etc. This will form a vertically integrated supply chain.<\/p>\n
There may be synergies as all information on the truck can be shared with the logistics operator and vice versa. This will enhance features like package tracking and real-time updates. The information can even be interfaced to the end consumers through electronic channels. Shipping costs can be shared in a live manner and better decisions on warehouse planning \/ truck load optimization. Additional freight can be added \/ delivered at hubs along the way. (Refer to Figure 4)<\/p>\n
There may be certain downsides such as limited potential to market the product beyond the Joint Venture partner.<\/p>\n
\u00a0<\/strong><\/a><\/p>\nFigure 4 Freight matching information flow [5]<\/em><\/p>\n <\/p>\n
Outstanding Challenges<\/h1>\n
Daimler needs to select its strategic position in the market in the next 2-5 years so that it can establish all the relationships in the market, while pursuing it\u2019s 2025 goal of penetrating deep into the market. []<\/p>\n
However, there may be some regulatory hurdles as Daimler establishes into the future of autonomous technologies. [6]<\/p>\n
Truck drivers form one of the largest workforce in the US employing around 3 Million people across the United States. This raises ethical questions on replacing men with machines and reducing the number of jobs. [7]<\/p>\n
<\/p>\n
<\/p>\n
<\/p>\n
End Notes<\/p>\n
[1] Daimler AG, \u201cThe pioneer of autonomous driving – Mercedes-Benz Future Truck 2025\u201d,<\/p>\n
https:\/\/www.daimler.com\/innovation\/autonomous-driving\/mercedes-benz-future-truck.html<\/a>, accessed November 2017.<\/p>\n[2] Strategy&, Industry 4.0: \u201cHow digitization makes the supply chain more efficient, agile, and customer-focused\u201d, \u00a0https:\/\/www.strategyand.pwc.com\/reports\/industry4.0<\/a>, accessed November 2017.<\/p>\n[3] Danielle Muoio, \u201cHere’s how Tesla, Uber, and Google are trying to revolutionize the trucking industry\u201d, Business Insider, June 2017 http:\/\/www.businessinsider.com\/autonomous-trucks-tesla-uber-google-2017-6\/#these-projects-only-touch-upon-a-few-of-the-solutions-startups-are-pursuing-to-improve-long-haul-trucking-but-it-could-still-be-awhile-before-these-any-of-these-materialize-11<\/a>, accessed November 2017.<\/p>\n[4] Daimler AG, \u201cDriving autonomously through Nevada – Freightliner Inspiration Truck\u201d,\u00a0 https:\/\/www.daimler.com\/innovation\/autonomous-driving\/freightliner-inspiration-truck.html<\/a>, accessed November 2017.<\/p>\n[5] Strategy&, \u201cThe era of digitized trucking: Transforming the logistics value chain\u201d, https:\/\/www.strategyand.pwc.com\/reports\/era-of-digitized-trucking<\/a>, accessed November 2017.<\/p>\n[6] Conor Dougherty, \u201cSelf-Driving Trucks May Be Closer Than They Appear\u201d, New York Times, November 2017, https:\/\/www.nytimes.com\/2017\/11\/13\/business\/self-driving-trucks.html<\/a>, accessed November 2017.<\/p>\n
Environment<\/h3>\n\n- Emissions will come down due to better power consumption profiles.<\/li>\n<\/ul>\n
<\/a><\/p>\nFigure 1 Cost Savings due to Autonomous Trucks [5]<\/em><\/p>\n <\/p>\n
<\/p>\n
The opportunity<\/h1>\n
<\/p>\n
By introducing autonomous technology Daimler Trucks Division can strategically reposition itself in the logistics industry (Refer to Figure 2). It has the following 4 options at hand:<\/p>\n
\n- Operate as a Manufacturer (OEM)<\/em><\/li>\n
- Operate a manufacture and lease model<\/em><\/li>\n
- Operate a manufacture, lease and trucking business<\/em><\/li>\n
- Have a joint venture with a large logistic operator<\/em><\/li>\n
- such as FedEx, DHL, USPS etc. and cover the logistics supply chain<\/li>\n<\/ol>\n
<\/a><\/p>\nFigure 2 Logistics supply chain [5]<\/em><\/p>\n<\/h1>\nOption 1: Operate as a Manufacturer (OEM)<\/h2>\n
By playing in this field Daimler remains neutral to all downstream operators. This can help target a broad market. Daimler has a good brand name in this domain and projects quality.<\/p>\n
A downside can be if other players dominate the supply chain with joint ventures.<\/p>\n
<\/p>\n
Option 2: OEM + Lease Operator<\/h2>\n
This implies that Daimler will rent out its vehicles to Trucking Operators. The benefit is that Daimler is still playing in the field that is familiar in. This strategy works well if the number of truck operators increase.<\/p>\n
The downside of taking this position is that Daimler will have a lot of capital locked up.<\/p>\n
<\/p>\n
Option 3: OEM + Lease + Trucking Operations<\/h2>\n
Under this option, Daimler can bill the logistics company by miles booked. This can be a preferred choice for Daimler as the level of complexity in trucking operations goes down. By taking over Trucking Operations Daimler can build a Hubs and Spoke model (figure 3) for its trucking fleet and provide services to a lot of logistic companies.<\/p>\n
Additionally, by taking on trucking operations Daimler can get more field experience and enhance the software and hardware from the operator\u2019s lens.\u00a0In my view this may be Daimler\u2019s best option.<\/p>\n
<\/a><\/p>\nFigure 3 Hub and Spoke model for Autonomous Trucks [5]<\/em><\/p>\n <\/p>\n
Option 4: OEM + Lease + Trucking Operations + Logistics Operations<\/h2>\n
Daimler can enter further downstream into the logistics business as well by partnering with one of the major logistics operators such as FedEx, USPS, DHL etc. This will form a vertically integrated supply chain.<\/p>\n
There may be synergies as all information on the truck can be shared with the logistics operator and vice versa. This will enhance features like package tracking and real-time updates. The information can even be interfaced to the end consumers through electronic channels. Shipping costs can be shared in a live manner and better decisions on warehouse planning \/ truck load optimization. Additional freight can be added \/ delivered at hubs along the way. (Refer to Figure 4)<\/p>\n
There may be certain downsides such as limited potential to market the product beyond the Joint Venture partner.<\/p>\n
\u00a0<\/strong><\/a><\/p>\nFigure 4 Freight matching information flow [5]<\/em><\/p>\n <\/p>\n
Outstanding Challenges<\/h1>\n
Daimler needs to select its strategic position in the market in the next 2-5 years so that it can establish all the relationships in the market, while pursuing it\u2019s 2025 goal of penetrating deep into the market. []<\/p>\n
However, there may be some regulatory hurdles as Daimler establishes into the future of autonomous technologies. [6]<\/p>\n
Truck drivers form one of the largest workforce in the US employing around 3 Million people across the United States. This raises ethical questions on replacing men with machines and reducing the number of jobs. [7]<\/p>\n
<\/p>\n
<\/p>\n
<\/p>\n
End Notes<\/p>\n
[1] Daimler AG, \u201cThe pioneer of autonomous driving – Mercedes-Benz Future Truck 2025\u201d,<\/p>\n
https:\/\/www.daimler.com\/innovation\/autonomous-driving\/mercedes-benz-future-truck.html<\/a>, accessed November 2017.<\/p>\n[2] Strategy&, Industry 4.0: \u201cHow digitization makes the supply chain more efficient, agile, and customer-focused\u201d, \u00a0https:\/\/www.strategyand.pwc.com\/reports\/industry4.0<\/a>, accessed November 2017.<\/p>\n[3] Danielle Muoio, \u201cHere’s how Tesla, Uber, and Google are trying to revolutionize the trucking industry\u201d, Business Insider, June 2017 http:\/\/www.businessinsider.com\/autonomous-trucks-tesla-uber-google-2017-6\/#these-projects-only-touch-upon-a-few-of-the-solutions-startups-are-pursuing-to-improve-long-haul-trucking-but-it-could-still-be-awhile-before-these-any-of-these-materialize-11<\/a>, accessed November 2017.<\/p>\n[4] Daimler AG, \u201cDriving autonomously through Nevada – Freightliner Inspiration Truck\u201d,\u00a0 https:\/\/www.daimler.com\/innovation\/autonomous-driving\/freightliner-inspiration-truck.html<\/a>, accessed November 2017.<\/p>\n[5] Strategy&, \u201cThe era of digitized trucking: Transforming the logistics value chain\u201d, https:\/\/www.strategyand.pwc.com\/reports\/era-of-digitized-trucking<\/a>, accessed November 2017.<\/p>\n[6] Conor Dougherty, \u201cSelf-Driving Trucks May Be Closer Than They Appear\u201d, New York Times, November 2017, https:\/\/www.nytimes.com\/2017\/11\/13\/business\/self-driving-trucks.html<\/a>, accessed November 2017.<\/p>\n
Figure 1 Cost Savings due to Autonomous Trucks [5]<\/em><\/p>\n <\/p>\n <\/p>\n <\/p>\n By introducing autonomous technology Daimler Trucks Division can strategically reposition itself in the logistics industry (Refer to Figure 2). It has the following 4 options at hand:<\/p>\n Figure 2 Logistics supply chain [5]<\/em><\/p>\n By playing in this field Daimler remains neutral to all downstream operators. This can help target a broad market. Daimler has a good brand name in this domain and projects quality.<\/p>\n A downside can be if other players dominate the supply chain with joint ventures.<\/p>\n <\/p>\n This implies that Daimler will rent out its vehicles to Trucking Operators. The benefit is that Daimler is still playing in the field that is familiar in. This strategy works well if the number of truck operators increase.<\/p>\n The downside of taking this position is that Daimler will have a lot of capital locked up.<\/p>\n <\/p>\n Under this option, Daimler can bill the logistics company by miles booked. This can be a preferred choice for Daimler as the level of complexity in trucking operations goes down. By taking over Trucking Operations Daimler can build a Hubs and Spoke model (figure 3) for its trucking fleet and provide services to a lot of logistic companies.<\/p>\n Additionally, by taking on trucking operations Daimler can get more field experience and enhance the software and hardware from the operator\u2019s lens.\u00a0In my view this may be Daimler\u2019s best option.<\/p>\n Figure 3 Hub and Spoke model for Autonomous Trucks [5]<\/em><\/p>\n <\/p>\n Daimler can enter further downstream into the logistics business as well by partnering with one of the major logistics operators such as FedEx, USPS, DHL etc. This will form a vertically integrated supply chain.<\/p>\n There may be synergies as all information on the truck can be shared with the logistics operator and vice versa. This will enhance features like package tracking and real-time updates. The information can even be interfaced to the end consumers through electronic channels. Shipping costs can be shared in a live manner and better decisions on warehouse planning \/ truck load optimization. Additional freight can be added \/ delivered at hubs along the way. (Refer to Figure 4)<\/p>\n There may be certain downsides such as limited potential to market the product beyond the Joint Venture partner.<\/p>\n \u00a0<\/strong> Figure 4 Freight matching information flow [5]<\/em><\/p>\n <\/p>\n Daimler needs to select its strategic position in the market in the next 2-5 years so that it can establish all the relationships in the market, while pursuing it\u2019s 2025 goal of penetrating deep into the market. []<\/p>\n However, there may be some regulatory hurdles as Daimler establishes into the future of autonomous technologies. [6]<\/p>\n Truck drivers form one of the largest workforce in the US employing around 3 Million people across the United States. This raises ethical questions on replacing men with machines and reducing the number of jobs. [7]<\/p>\n <\/p>\n <\/p>\n <\/p>\n End Notes<\/p>\n [1] Daimler AG, \u201cThe pioneer of autonomous driving – Mercedes-Benz Future Truck 2025\u201d,<\/p>\n https:\/\/www.daimler.com\/innovation\/autonomous-driving\/mercedes-benz-future-truck.html<\/a>, accessed November 2017.<\/p>\n [2] Strategy&, Industry 4.0: \u201cHow digitization makes the supply chain more efficient, agile, and customer-focused\u201d, \u00a0https:\/\/www.strategyand.pwc.com\/reports\/industry4.0<\/a>, accessed November 2017.<\/p>\n [3] Danielle Muoio, \u201cHere’s how Tesla, Uber, and Google are trying to revolutionize the trucking industry\u201d, Business Insider, June 2017 http:\/\/www.businessinsider.com\/autonomous-trucks-tesla-uber-google-2017-6\/#these-projects-only-touch-upon-a-few-of-the-solutions-startups-are-pursuing-to-improve-long-haul-trucking-but-it-could-still-be-awhile-before-these-any-of-these-materialize-11<\/a>, accessed November 2017.<\/p>\n [4] Daimler AG, \u201cDriving autonomously through Nevada – Freightliner Inspiration Truck\u201d,\u00a0 https:\/\/www.daimler.com\/innovation\/autonomous-driving\/freightliner-inspiration-truck.html<\/a>, accessed November 2017.<\/p>\n [5] Strategy&, \u201cThe era of digitized trucking: Transforming the logistics value chain\u201d, https:\/\/www.strategyand.pwc.com\/reports\/era-of-digitized-trucking<\/a>, accessed November 2017.<\/p>\n [6] Conor Dougherty, \u201cSelf-Driving Trucks May Be Closer Than They Appear\u201d, New York Times, November 2017, https:\/\/www.nytimes.com\/2017\/11\/13\/business\/self-driving-trucks.html<\/a>, accessed November 2017.<\/p>\n<\/a><\/p>\nThe opportunity<\/h1>\n
\n
<\/a><\/p>\n<\/h1>\n
Option 1: Operate as a Manufacturer (OEM)<\/h2>\n
Option 2: OEM + Lease Operator<\/h2>\n
Option 3: OEM + Lease + Trucking Operations<\/h2>\n
<\/a><\/p>\nOption 4: OEM + Lease + Trucking Operations + Logistics Operations<\/h2>\n
<\/a><\/p>\nOutstanding Challenges<\/h1>\n