Commercialization of Autonomous Vehicles in the Logistics Industry — Interview with Julian Ma, CEO of Inceptio Technology
Julian Ma, CEO of Inceptio Technology and President of G7 Networks, met with Robin.ly to discuss the commercialization of autonomous driving from a logistics perspective. Julian has had an esteemed career in business, previously working as a Corporate Vice President for the Chinese internet service Tencent, as well as being the Head of Communications at A.T. Kearney.
Inceptio is focused on using autonomous driving vehicles to solve logistics problems from a B2B perspective; making it a logistics-as-a-service (LaaS) company. The company is in the process of building and maintaining self-driving trucks. Inceptio Technology was co-founded by G7, the largest fleet management platform in Asia, Global Logistic Properties Ltd (GLP) and NIO Capital.
Autonomous driving trucks
Autonomous driving is one of the most interesting tech fields in recent years, with numerous companies working hard to build the safest and most accurate self-driving vehicles possible. It is fair to say that the industry receives a great deal of attention both from a media and a corporate perspective. One of the areas that Julian is currently focused on is how to build and distribute autonomous driving trucks while turning a profit. Running and using non-autonomous trucks is an expensive task in and of itself, and companies who need to use trucks often find those costs creep up rapidly. Julian noted:
“The cost for a heavy duty truck runs between 100, 000 to 150,000 US dollars. That is actually a fairly large number. Out of this number, roughly 25% of that goes to fuel, another 25 to 30% goes to drivers cost”.
Reducing costs in the logistics industry
The cost of using trucks can be decreased via the use of autonomous driving trucks, as the driver costs can get reduced drastically. This is because “the workload of the driver can be reduced by roughly 90%”. This would effectively turn the job of being a truck driver into something more akin to being an “administrator”. In many circumstances, such as for extremely long journeys, only a specific few drivers are currently capable of performing the task, as they are the only ones who have enough knowledge of the roads and of the truck itself. However, with autonomous driving, it would allow any driver to handle those journeys as the AI would be doing most of the hard work. “That would save roughly 12 to 15% of the labor costs on the project basis. This is a huge saving”. Fuel costs are largely diminished too. Julian explained”
“Fuel efficiency will always be kept at the best. That will give our customers another 5%, between 3 to 5% fuel efficiency. The depreciation for the equipment actually only accounts for 8 to 10% on an annual basis. So on the drivers, on the fuel, we will save roughly 15 to 20%”.
Autonomous driving as an industry
When discussing the business of autonomous driving, Julian explained that he considers it to be all about logistics. In regards to the industry, he noted that “all of the big ticket investment, the big news as of this year are very much related to logistics”. This is very true in regards to businesses such as Aurora, Nuro, and TuSimple. While there are companies trying to bring autonomous driving vehicles to the public, it is the logistics sector which investors are focusing on. This is because autonomous driving allows for goods to be transported at greater ease and at a cheaper cost. Any company which needs to ship or move goods can benefit from autonomous driving.
L3 and L4 areas
Most autonomous driving companies have chosen to turn their efforts towards getting trucks to work in places such as mines and docks. These are known as L4 areas. An L4 area is one where a self-driving vehicle is competent enough to fully navigate them without any intervention from the driver (however the driver must still be present and may be rarely called upon to take control). Inceptio Technology, however, has chosen to work on L3 areas, which includes highways. L3 areas are locations where the AI of the car is still making the majority of the decisions but still needs the driver to take control on a semi-regular/partial basis. When asked why he chose to focus on the highway, Julian said:
“Highway is a much, much larger market. On average, each interstate highway truck on an annual basis, their revenue on the per truck basis is 150,000 US dollars. And there are 6 million trucks in China. So 6 million times $150,000 per truck per year, that is actually close to 1 trillion US dollars. So this is a huge market”.
Additionally, Inceptio Technology is planning to build and distribute their own L3 trucks containing their software and hardware.
“The current plan is that by the end of 2021, we will start the volume production of those L3 level autonomous trucks. And then we’ll buy all of the trucks by ourselves, and we will run the fleet throughout China, mainly across the highway”.
Julian further noted that they have “already hired the best fleet managers and fleet operating professionals from the China logistics industries” allowing them to do this with ease.
Looking at autonomous driving from a logistics perspective reveals just how large the industry is, and how much scope it has for the future. With the speed at which the field is moving, it is not hard to envisage a time when roads and especially highways are filled with self-driving vehicles. It may even be that the next breakthroughs in the technology are brought about from the logistics sector in particular.
Julian Ma also discusses the topic of Truck platooning, and the challenges he has faced within his career during his full interview with Robin.ly. View more inspiring talks focusing on AI and entrepreneurship at Robin.ly.
