McKinsey & Co., New York, revealed five trends set to create change for the trucking, rail, warehousing and logistics companies that move America’s merchandise.

Autonomous trucks (ATs) will change the cost structure and utilization of trucking. That’s because 65% of the nation’s consumable goods are trucked to market. With full autonomy, operating costs would decline by about 40%, saving the U.S. for-hire trucking industry between $85-125 billion.

The sustained acceleration in e-commerce also continues to catch shippers by surprise. Today, between 12-15% of all purchases in the United States are made from the comfort of home. By 2025, that figure might be as high as 15%, cementing customers’ expectations for fast and free delivery.

Automation at every step of the supply chain is expanding logistics firms’ ability to flex with peak demand, take on heavier cargo and pick and pack individual products. The industry is shifting toward comprehensive automation through projects such as “warehouse of the future,” with collaborative robots, an advanced sorting system and indoor drones. As automation proceeds, logistics costs might fall by up to 40%.

Asset sharing unlocks unused capacity in capital-intensive assets, such as trucks and warehouses, and even trains and ships. Already, last-mile crowdsourcing models and other supply and demand-matching platforms are making their presence felt, particularly in the less-than-truckload industry.

Finally, leading shippers and carriers are using data and analytics to forecast demand and optimize their routes in ways not imagined even a few years ago. Some shippers have trimmed inventories by up to 75%, cut warehousing costs by 15-30% and reduced administrative costs by 80%. Even some already-efficient third-party logistics (3PL) firms are finding that, in some cases, new routing powered by connectivity and analytics can produce efficiencies of up to 25%. Developments in mobile internet, the Internet of Things (IoT) and other technologies are increasing the data available and helping reduce risk.

Fast forward

Any one of these five trends might seem like a distraction. But, taken together, these shifts clearly imply disruption across the logistics business system, including in trucking, rail, port and warehousing. To stay ahead, executives should ask strategic questions, such as, how might disruptive trends affect their companies? When will these trends begin to impact customers, suppliers and revenue streams? Do the trends present threats, opportunities or both? And, how can companies prepare?

ATs: Disruption on wheels

The industry moves about two-thirds of all goods shipped in the United States, with truck driving being the primary occupation in more than half of all U.S. states. And, the industry is deeply traditional, with few major or structural changes in the preceding decades.

However, today’s companies have struck alliances to operate ATs jointly. The rigs these companies are using are typically new medium- and heavy-duty trucks, outfitted with lidars, sensors and other technology to allow the vehicle to operate without human intervention.

Full autonomy is a long way off, however the McKinsey Center for Future Mobility researched the likely development of ATs, which can be best understood in four waves.

The first two waves feature “platooning,” a technique to wirelessly connect a convoy of trucks to a lead truck, allowing them to operate safely, closer together and realize fuel efficiencies. Platooning with drivers will still require a driver in each truck. Over the next 3-5 years, networks of these connected convoys will develop, utilizing algorithms to link up. With better aerodynamics that lead to fuel savings, these convoys could reduce the TCO of a truck by roughly 1%.

In about 5-7 years, the next wave, driverless platooning, will take hold. On interstate highways, these platoons will feature a driver in the lead truck and unmanned trucks following close behind. Upon leaving the highway, drivers will resume control of each vehicle. It’s estimated that the savings in fuel and labor will cut TCO by an additional 10%, dependent on the proportion of highways and surface streets in the route. In every wave, long-haul routes will offer greater savings.

In roughly 7-10 years, the study projected a third wave of AT development—constrained autonomy. Unmanned trucks will operate throughout the interstate highway system and other “geofenced” areas without a platoon, subject to weather and visibility conditions and developments in infrastructure such as the ability to communicate with traffic lights. Drivers will meet the trucks at the interstate exit and drive them to the ultimate destination, navigating city streets, local and pedestrian traffic, parking lots and loading docks. This constrained autonomy will produce total savings of about 20%.

More than 10 years from now, McKinsey expects the first fully autonomous trucks, operating at scale without drivers from loading to delivery. These ATs will reduce today’s TCO by 45%, though it will take many years for the autonomous fleet to displace the non-autonomous national fleet.

Assessing the impact

Lower costs are only the most obvious of the effects of ATs on the trucking industry, and trucking is the industry that will be most obviously affected. But, ATs will set new forces in motion throughout logistics. McKinsey’s research, which includes interviews with dozens of industry executives and a review of technology adoption patterns in other industries, suggests that cost structures, consumption patterns and operating models everywhere in logistics will shift, with trucking being the most affected sub-sector.

Railroad operators

For rail carriers of intermodal goods, ATs can become a fierce competitor or a valuable partner. The industry may see a shift in volumes from rail to road as the cost of trucking declines and the point of parity for shippers’ costs between rail and road extends from today’s 500 miles to nearly 1,000 miles. But, there is also an opportunity. If railway companies can seamlessly integrate with ATs, they could overcome the handicap of their fixed footprints by extending into drayage, and even beyond. In doing so, rail could dramatically increase speed and throughput as well as secure a critical and growing role in the overall ecosystem. In making these strategic decisions, rail operators will also have to consider their positions on highway funding through subsidies and taxes, since more ATs will further stress the capacity and maintenance needs of the interstate highway system.

Warehouse, distribution center and fulfillment center operators

Warehouses, as well as distribution and fulfillment centers, will experience game-changing impact. First, ATs will simplify 24/7 operations—a shift that will become more common as warehouses and fulfillment centers automate more of their operations. E-commerce fulfillment will move faster, as picking and shipping will be possible day and night and during shifts that are hard to staff with people. Second, ATs will reduce per-unit costs of warehousing through the ability to turn inventory more quickly.

Warehouses will likely need to invest in infrastructure changes, such as AT-compatible entrances and docks, to ensure seamless connections. Operators might be able to relocate warehouses to more remote areas as the cost of transportation falls. Alternatively, operators might be able to apply transportation savings to urban locations, improving their ability to meet rapidly growing demand for fast and free delivery.

Warehousing companies will want to ensure that ATs have easy highway access to their facilities. They might explore, perhaps with local governments, ways to limit surface traffic. The layout of parking lots should be reviewed with ATs in mind, as should dock access. And, companies will want to assess their ability to provide local drivers for Wave 2 autonomy.

Port operators

Ports will experience similar changes, as operations speed up and costs fall. Intermodal facilities, for example, will need to be always open to accommodate ATs. But, impact on ports will be even more substantial than on warehouses. Many ports already use AT technology to haul containers from the dock to the yard. Typically, these yards are active for only a few hours a day. But, with ATs, yards can stay active around the clock. Further, with advances in ATs, a port’s activities might extend deep into the country it serves. The port’s boundary might be defined by the delivery range of an AT that can seamlessly enter the roadway system rather than by a property line.

For now, ports will need to play a more active role in ensuring smoother trucking-traffic flows—especially those ports with known bottlenecks and those in heavily congested areas. Operators might need to expand gate infrastructure and consider alterations and expansions to highways, underpasses and bridges.


By themselves, ATs are unlikely to have a significant effect on the brokerage business. However, the technologies that enable ATs could introduce significant new opportunities. Consider that today’s trucks are typically less than 60% utilized, as many operate with excess space in trailers or run empty backhauls. The constant connectivity required to operate ATs—with telematics providing real-time information on location, route and available capacity—creates opportunities for brokers to monetize capacity that goes unused.

On the other hand, big swathes of the current trucking market are likely to become more concentrated. As seen in the market for ocean freight, consolidation might reduce demand for brokers, who should monitor these developments closely.


Shippers should consider the widespread ramifications ATs will have across the supply chain. Most notably, ATs will largely eradicate the cyclicality of supply chains, a feature created by human calendars. With ATs able to work 24/7, supply chains will be continually active, and daily, weekly and monthly variations will likely disappear. This will change the shipping and production schedules for factories and warehouses, as shipments will be planned around efficiency considerations rather than the availability of drivers. Warehouses will likely need more employees during off-peak hours to receive and send goods. These changes will reverberate throughout supply chains, causing them to operate with more efficiency and less slack.

What will ATs mean for the trucking industry?

Naturally, trucking companies will be most acutely affected by this technological shift. As ATs take to the highways, McKinsey predicts four main implications for today’s trucking companies.

First, ATs will cut operating costs—though capital expenditures will rise, which could alter companies’ balance sheets.

Second, the rise of ATs could spur consolidation of the national fleet, which is highly fragmented.

Third, ATs could alleviate the industry’s capacity crunch.

And finally, ATs could create an opportunity for truck OEMs to move downstream and enter transport markets.

Setting the pace of disruption

The following sets of factors will influence the rate of AT adoption:

  • Technology. Current testing indicates that ATs are ready to be deployed in many standard environments, but not yet ready to handle uncommon “edge” cases (such as construction sites). While recent incidents have shown that the algorithms and sensors have room to improve, deep learning (an artificial intelligence technique) will improve the software with each mile driven.
  • Economics. Economically, ATs could be more than 1.5 times more expensive than conventional trucks, requiring a higher initial investment by trucking companies and assurance of the total cost-of-ownership savings.
  • Regulation. The U.S. regulatory environment has been favorable, though not comprehensively. Small regions are advancing faster than others. There is little legal precedent on the nature and extent of liability for an unmanned vehicle, creating concern for OEMs, owners, operators and even nearby drivers.
  • Infrastructure. U.S. highway infrastructure is already in need of repair and expansion, with interstates near any major city clogged for hours each day. Ultimately, ATs can reduce congestion by traveling closer together, but models show that they would need to replace more than half of the national fleet to realize that benefit. Additionally, “platooning” might require depots to assemble convoys. Public or private highway access points would also ease the path to full autonomy.

A robust industry

U.S. trucks carry more freight than do all other modes, including rail, pipeline, water and air combined. In 2016, U.S. trucking companies collected $260 billion in revenues, or 20% of the worldwide total of $1.2 trillion. Other U.S. freight carriers collectively had $145 billion in 2016 revenues.

In 2016, about 3.7 million heavy-duty trucks were in operation in the United States, a figure that has grown by about 2.2% annually since 2011. The industry employed about 1.8 million drivers. That’s 10 times more than the country’s Class 1 railroads, which employed approximately 165,000 people in 2017.

Capacity crunch

Even so, the industry could use more drivers. Demography is a prime factor in the shortage. Truck drivers are, on average, about seven years older than the typical American worker. As they retire, they are not being replaced. Younger generations are opting for less-demanding careers in other industries.

Recent rule changes are also having an effect. For example, hours-of-service regulations and the electronic logging device mandate have limited the number of hours that a driver can be on the road. Runs that used to take a single day now take two, effectively limiting the supply of driver hours and decreasing available capacity. Difficult working conditions and stiff competition have resulted in annual attrition rates near or exceeding 100%, which have resulted in increased cost for carriers and rate increases for shippers.

Shippers often have a hard time finding carriers, which have become more selective about the loads they take, choosing those with the best margins. These dynamics have propelled an increase in long-distance truckload rates, which were 6-7% higher in September than a year earlier.

Operating costs down, asset prices up

For the first of four implications of ATs, consider the changes in operating costs. Initial savings will be small. But, McKinsey’s report estimates that, with full autonomy arriving sometime in 10-15 years, TCO will fall by 45% from today’s costs.

The biggest chunk of that savings will be on labor, as spend will fall to $61 billion from the current $85 billion. But, that doesn’t necessarily mean bad news for today’s drivers. Autonomy will first take root on long-haul trips, which are the least popular among today’s commercial drivers. The industry’s driver shortage is concentrated in these routes. Thus, many of the jobs filled by ATs are currently unoccupied. McKinsey anticipates an increase in technical jobs to service and maintain the IT infrastructure that ATs need. The research also anticipates job growth because of the need for local drivers to navigate ATs from the highways to their destinations and back.

Against those operating cost savings, however, companies must absorb the higher capital cost of ATs. Case in point: the industry’s fastest-growing cost in recent years has been the fleet. Purchasing or leasing new power units has grown about 10% per year since 2012. That will only accelerate as ATs take to the highway.

The higher cost of ATs also introduces uncertainty about the value of aging vehicles and depreciation of new ones. It is not anticipated to have an impact on prices of used non-autonomous vehicles over the next 5-10 years. AT substitution will come slowly, and in the meantime, demand for non-autonomous vehicles will continue. A large fleet of conventional trucks will still be needed, and it will be quite a long time before autonomous vehicles enter the secondary market. However, those investing in new technology will bear a risk of uncertain residual values. This risk, combined with more complex maintenance and open questions regarding liability, might accelerate the industry-wide trend to outsource fleet management.

Increased utilization of latent capacity

ATs are not subject to hours-of-service regulations. By increasing driving hours from 11 hours per day to 20, ATs will be able to move freight faster and more flexibly, which will also allow shippers’ supply chains to run faster. This increase in productivity could play out in a couple of ways. If demand grows, the national fleet could accommodate it without growing and remain about the same size. If demand does not grow, the fleet might shrink. Analysis suggests that in some likely scenarios, even as total miles driven increase, the fleet might shrink by 20%, though annual sales are likely to remain steady, as highly utilized vehicles are replaced more frequently.

Greater industry concentration

ATs might cause a greater share of the market to consolidate in the hands of the big trucking companies at the expense of owner–operator companies and other small companies. Three different kinds of scale economy will favor larger companies.

First, ATs can run longer, make faster trips and eliminate the need for rest periods. Those benefits will save costs. But, they will also impose a new need for an infrastructure to troubleshoot and attend to some of the problems that drivers currently handle. Companies will need a network of garages and shops to maintain vehicles and perform simple roadside maintenance. The largest companies are in a better position to build such networks.

Second, ATs are better able to take advantage of optimized routing software, which can identify backhaul opportunities and create preferential platoons. Autonomous technology uses constant connectivity to receive and transmit updates, creating a very high volume of data. Individual owner-operators are not as well equipped as large fleets to maintain, route or manage this torrent of data.

Finally, larger companies will create more efficient platoons. And, as things stand now, only the largest companies can organize the teams of local drivers needed when platoons leave the highway.

These factors suggest that the current full-truckload industry structure, in which about 90% of all carriers have fewer than 10 tractors, will come under pressure. ATs and their technologies will be most easily deployed and exploited by larger carriers, which might claim a larger share of the industry as a result.

OEMs could expand vertically

Vehicle manufacturers see the potential for growth in transport as a service, which represents a new kind of revenue stream beyond or instead of the traditional sale.

Transport as a service will become increasingly important as the value of vehicles shifts from their hardware to their software, and especially if that software is not written by OEMs. Additionally, in an autonomous world, if OEMs retain the liability for the vehicles they produce, they are further incentivized to control the maintenance and usage of their trucks. Although this shift requires changes to their balance sheets and the development of new business models, truck OEMs might easily pursue small pilot programs before digesting what they learn and expanding their operations. Many digital innovations start in consumer businesses, then transfer to B2B. McKinsey projects transportation as a service to do the same.

Getting out in front of ATs—not as dangerous as it sounds

The forces unleashed by ATs have the potential to change the ecosystem dramatically. Industry consolidation would transform a fragmented industry that struggles to attract sufficient drivers into a digitally enabled short list of providers. OEMs and new entrants might compete for transportation-as-a-service share. And, companies might tap their latent capacity through near-24-hour operations.

For carriers, ATs are likely to bring disruption to operating models, cost structures and economic models.