Is This the Answer to Supply Chain Woes?
It was only a few years ago that people couldn’t get enough details about self-driving and autonomous technology. It was going to change the world. It was touted as being the next technological revolution, and then all of a sudden I wasn’t hearing much about the technology.
I believe part of the silence was because the technology was going to need some time to develop and advance. It was still fairly new and some wrinkles needed to be ironed out.
As news of this technology began to emerge, people were expecting that they’d be driving in an autonomous vehicle in the next few years. The idea of having an easier commute to work was implanted into everyone’s mind. However, it became apparent that this technology was going to need more work before it could be available to the general public.
As more tests were conducted for the intention of using autonomous vehicles for everyday use by the public, including as public transportation, it became more clear that vehicles for those purposes were going to need more testing and the technology would need more tweaking to ensure that it would be safe for the public to use.
However, the technology was still advancing, which led some companies to find another angle when it came to autonomous technology: using it for transporting goods or deliveries through semi-trucks. This sector is known as autonomous trucking.
The truck features all of the major components of traditional trucks, but with a self-driving system installed that uses infrared radars, LiDAR (laser radar), cameras, sophisticated motion sensors, accurate sensors, and complex algorithms that help the truck drive itself. The self-driving truck market is set to experience remarkable growth in the next five years.
The Future for Autonomous Trucking
A recent market report conducted by Verified Market Research indicates that in 2020, the autonomous trucks market was valued at $460 million and is projected to reach $1.5 billion by 2028, which represents a strong CAGR of 22.4% from 2021–2028.
A self-driving truck or fully autonomous truck can operate on the road without any intervention from a human. There are semi-autonomous trucks, which means that a human driver has some level of assistance while driving but is still responsible for certain factors like monitoring the environment.
Embark’s Autonomous Trucking Software
Embark (NASDAQ: EMBK) has called itself the oldest U.S. self-driving truck software company. The company has partnered with shippers with the goals of bringing down carrier costs and making roads safer.
Embark has partnerships with prominent transportation players like Anheuser-Busch InBev (NYSE: BUD), HP Inc. (NYSE: HPQ), Werner Enterprises (NASDAQ: WERN), Ryder (NYSE: R), DHL, and Knight-Swift Transportation Holdings (NYSE: KNX). The company was founded in 2016 by Alex Rodrigues and Brandon Moak.
Embark’s software can convert current truck fleets into autonomous fleets. Instead of the company developing its own vehicles, it works with carriers and truck manufacturers to make self-driving trucks a reality.
According to the company’s website, the company’s autonomous tech can improve fuel efficiency by 10%, reduce delivery time by 40%, and increase revenue per truck by 300%.
These kinds of percentages from Embark make the case for the company’s software and could help alleviate the type of supply chain issues that are happening right now. Currently, the congestion at U.S. ports, the trucker shortage, and the increase of e-commerce traffic since the start of the COVID-19 pandemic are all paying a part in the supply chain issues.
Any attempts to help fix these problems or to prevent them from happening again is ideal and will be embraced. Embark CEO Alex Rodrigues had this to say:
What we’ve heard from investors is people are really understanding the need here and there is a huge amount of excitement about the potential to revolutionize the way logistics works. We are really at an inflection point now, where it’s really started to affect everyday people and you know when people can’t get their Christmas present, the need for a solution become a lot more urgent.
Embark Goes Public Through SPAC Merger
Embark recently went public through a SPAC merger with Northern Genesis Acquisition Corp. II on November 11 at a $5 billion valuation, which has put 26-year-old Rodrigues — one of the youngest CEOs of a publicly traded company— at an estimated net worth of $500 million.
Rodrigues commented this about the SPAC merger and going public:
The SPAC is just means to the end. The end is when you go to bed and there’s no one in the truck, and it’s driving to hundreds of destinations in the U.S. You wake up and it’s still driving.
Now that the company is publicly traded, it plans to use the funds it earned through its IPO to scale up operations and focus on its goal of fulfilling over 14,200 reservations for Embark-enabled trucks by 2024.
Embark joins TuSimple (NASDAQ: TSP) with its market debut, as both companies work in the same space of the autonomous trucking industry and have recently gone public. The next few years could be an extremely defining time for this sector, and both of these companies could become market leaders in this space.
Until next time,