5 ms·

You assumed that the trucking volume will stay the same when the cost goes down significantly.

by mertd 9y ago

vkou 9y ago
If the cost of electricity halves, will you start using twice as much electricity? Halving the cost of transporting goods will not double the demand for transporting goods. Consumer budgets are fixed, and transportation is a very small fraction of the price of goods that consumers buy. Dropping the cost of transport by 30%, because you only need to employ half the truckers, will not double demand. Unlike the before-after world of trucking, air travel, container shipping, etc, there isn't a mountain of businesses that suddenly become viable when long-haul costs get slashed by a third.
- dsfyu404ed 9y ago
  It won't double it but it will be close in some locales. It would also slightly decrease the cost of a heck of a lot of things.
  - vkou 9y ago
    Exactly which categories of businesses are sitting on their hands, going 'Golly - we'd make and sell so much more of our product, if only shipping & handling were 30% cheaper'? What fraction of the economy do they make up? What if efficiency gains are not 2x, but 10x? What if you'll only need to employ one trucker to do the job of 10? Do you think demand for trucking will go up 10x? This isn't a web framework.
    - TJ-14 9y ago
      Everything that you buy online, in a Walmart, or is otherwise manufactured a city away from where it's sold? Trucking costs are built into most products. My grocery store sells apples from California. If the cost of trucking them to me goes down, those apples will decrease in cost and they will potentially sell more apples.
      - Spooky23 9y ago
        Shipping probably cost less than the plastic container. Automation of driving is all about making people with lots of capital richer. Efficiency is just the dream -- this stuff will dramatically increase costs of shipping as capacity is constrained.
    - dsfyu404ed 9y ago
      The demand will not rise 1:1, that's a given. It will rise the same way that when gas is cheap people are more likely to take road trips. For example, I just requested quotes for waterjetting some stuff today. If LTL shipping were cheap enough to I'd look outside the high CoL sphincter of the country where I happen to reside but instead I'm stuck paying a premium because the local cost of everything is high. There's also a cylinder head in my garage for a 60s Ford I'd like to give to someone who needs it but nobody needs it bad enough to pay for me to ship it across the country. At the higher volume levels similar stuff happens. A construction company may source steel from farther away to undercut it's competition. You can bet the logistics people at Walmart (and anyone else with a big fleet) are drooling over all the optimizations they could implement if trucks could run like call centers.
      - vkou 9y ago
        > The demand will not rise 1:1, that's a given. This is the only point I seek to make. If salaries are 60% of the cost of shipping, and self-driving trucks make drivers twice as productive, costs will drop 30%. This will bring a demand increase of less then 30%. Let's say 15%. ... Doing the math, it looks like 42% of truckers just lost their jobs. But at least they can buy more apples with the money they no longer have. The bigger the productivity gain, the worse it will look for them.
        stale2002 9y ago
        Why would you think this? Lots of products have price elasticity of greater than 1. Shipping seems like a very elastic industry. If anything, demand would increase by more than 1% for every 1% decrease in cost. This is because shipping costs if shipping costs are low enough, then you can build something for cheap somewhere else and then ship stuff across the country to high cost of living locations. YOU wouldn't ship stuff more, but industry would. IE imagine if something costs 1/3 if it is made in China. If shipping costs are more then you save, then nobody would ship it. But if shipping costs go down, now you can easy get those cost benefits of across world or across country manufacturing.
        9y ago
- chaostheory 9y ago
  > If the cost of electricity halves, will you start using twice as much electricity? Possibly since not all my cars are electric yet. You can also see this happening for other resources https://www.gatesnotes.com/Books/Making-the-Modern-World https://www.gatesnotes.com/Books/Making-the-Modern-World
  - vkou 9y ago
    There's an obvious difference between various resources. If a cross-country airplane ticket cost $4000, instead of $400, air travel would be much less then 1/10th what it is now. A lot of people will fly somewhere for $400. Almost nobody will fly somewhere for $4000. On the other hand, if the price of that ticket dropped from $400 to $360, we wouldn't see a 10% increase in passenger volume. The set of people who will fly somewhere for $360, but won't for $400 is tiny. I posit that trucking is in the latter, rather then the former category. It's already cheap.
    - chaostheory 9y ago
      > It's already cheap. I disagree. Given companies like Amazon, it is currently not cheap enough. I would argue that it will take longer before it's 'cheap'. The appetite for 'free shipping' is still growing and it's very different from the demand for airplane tickets. Kind of like with your electricity example, you're missing parts of the big picture.
      - vkou 9y ago
        What's not cheap is the last mile. We're talking about long-haul trucking, here.
        chaostheory 9y ago
        For companies like Amazon and Walmart, there's no such thing as cheap enough especially when it's tied to shipping.
        9y ago
0xffff2 9y ago
If you're still paying the same number of truck operators the same wage, how are costs going to go down at all? Self-driving trucks certainly aren't going to be cheaper to buy or maintain than their non-sentient counterparts... What other factors drive the cost of truck transportation?
- stale2002 9y ago
  Because the same number of truck operators can now drive 3 trucks at once. Cost stay the same, but trucking capacity triples.
  - vkou 9y ago
    Precisely. Someone said that once driving is automated, truckers will only be responsible for cargo management, with a few people standing by for a fleet, ready to take over manually if autopilot breaks.

You assumed that the trucking volume will stay the same when the cost goes down significantly.

by mertd 9y ago

You assumed that the trucking volume will stay the same when the cost goes down significantly.

vkou 9y ago

If the cost of electricity halves, will you start using twice as much electricity? Halving the cost of transporting goods will not double the demand for transporting goods. Consumer budgets are fixed, and transportation is a very small fraction of the price of goods that consumers buy. Dropping the cost of transport by 30%, because you only need to employ half the truckers, will not double demand. Unlike the before-after world of trucking, air travel, container shipping, etc, there isn't a mountain of businesses that suddenly become viable when long-haul costs get slashed by a third.

dsfyu404ed 9y ago
It won't double it but it will be close in some locales. It would also slightly decrease the cost of a heck of a lot of things.
- vkou 9y ago
  Exactly which categories of businesses are sitting on their hands, going 'Golly - we'd make and sell so much more of our product, if only shipping & handling were 30% cheaper'? What fraction of the economy do they make up? What if efficiency gains are not 2x, but 10x? What if you'll only need to employ one trucker to do the job of 10? Do you think demand for trucking will go up 10x? This isn't a web framework.
  - TJ-14 9y ago
    Everything that you buy online, in a Walmart, or is otherwise manufactured a city away from where it's sold? Trucking costs are built into most products. My grocery store sells apples from California. If the cost of trucking them to me goes down, those apples will decrease in cost and they will potentially sell more apples.
    - Spooky23 9y ago
      Shipping probably cost less than the plastic container. Automation of driving is all about making people with lots of capital richer. Efficiency is just the dream -- this stuff will dramatically increase costs of shipping as capacity is constrained.
  - dsfyu404ed 9y ago
    The demand will not rise 1:1, that's a given. It will rise the same way that when gas is cheap people are more likely to take road trips. For example, I just requested quotes for waterjetting some stuff today. If LTL shipping were cheap enough to I'd look outside the high CoL sphincter of the country where I happen to reside but instead I'm stuck paying a premium because the local cost of everything is high. There's also a cylinder head in my garage for a 60s Ford I'd like to give to someone who needs it but nobody needs it bad enough to pay for me to ship it across the country. At the higher volume levels similar stuff happens. A construction company may source steel from farther away to undercut it's competition. You can bet the logistics people at Walmart (and anyone else with a big fleet) are drooling over all the optimizations they could implement if trucks could run like call centers.
    - vkou 9y ago
      > The demand will not rise 1:1, that's a given. This is the only point I seek to make. If salaries are 60% of the cost of shipping, and self-driving trucks make drivers twice as productive, costs will drop 30%. This will bring a demand increase of less then 30%. Let's say 15%. ... Doing the math, it looks like 42% of truckers just lost their jobs. But at least they can buy more apples with the money they no longer have. The bigger the productivity gain, the worse it will look for them.
      - stale2002 9y ago
        Why would you think this? Lots of products have price elasticity of greater than 1. Shipping seems like a very elastic industry. If anything, demand would increase by more than 1% for every 1% decrease in cost. This is because shipping costs if shipping costs are low enough, then you can build something for cheap somewhere else and then ship stuff across the country to high cost of living locations. YOU wouldn't ship stuff more, but industry would. IE imagine if something costs 1/3 if it is made in China. If shipping costs are more then you save, then nobody would ship it. But if shipping costs go down, now you can easy get those cost benefits of across world or across country manufacturing.
        9y ago
chaostheory 9y ago
> If the cost of electricity halves, will you start using twice as much electricity? Possibly since not all my cars are electric yet. You can also see this happening for other resources https://www.gatesnotes.com/Books/Making-the-Modern-World https://www.gatesnotes.com/Books/Making-the-Modern-World
- vkou 9y ago
  There's an obvious difference between various resources. If a cross-country airplane ticket cost $4000, instead of $400, air travel would be much less then 1/10th what it is now. A lot of people will fly somewhere for $400. Almost nobody will fly somewhere for $4000. On the other hand, if the price of that ticket dropped from $400 to $360, we wouldn't see a 10% increase in passenger volume. The set of people who will fly somewhere for $360, but won't for $400 is tiny. I posit that trucking is in the latter, rather then the former category. It's already cheap.
  - chaostheory 9y ago
    > It's already cheap. I disagree. Given companies like Amazon, it is currently not cheap enough. I would argue that it will take longer before it's 'cheap'. The appetite for 'free shipping' is still growing and it's very different from the demand for airplane tickets. Kind of like with your electricity example, you're missing parts of the big picture.
    - vkou 9y ago
      What's not cheap is the last mile. We're talking about long-haul trucking, here.
      - chaostheory 9y ago
        For companies like Amazon and Walmart, there's no such thing as cheap enough especially when it's tied to shipping.
        9y ago

0xffff2 9y ago

If you're still paying the same number of truck operators the same wage, how are costs going to go down at all? Self-driving trucks certainly aren't going to be cheaper to buy or maintain than their non-sentient counterparts... What other factors drive the cost of truck transportation?

stale2002 9y ago
Because the same number of truck operators can now drive 3 trucks at once. Cost stay the same, but trucking capacity triples.
- vkou 9y ago
  Precisely. Someone said that once driving is automated, truckers will only be responsible for cargo management, with a few people standing by for a fleet, ready to take over manually if autopilot breaks.