COVID-19 "a huge industry wake-up call that puts many jobs at risk", claims tech expert

The COVID-19 pandemic is a “huge wake-up call” for the transport and logistics sector and will provide the catalyst for automation, putting many jobs at risk.

That’s the view of technology expert Paul Cuatracasas (pictured) who said the outbreak was a new form of disruption that will speed the development of “fully autonomous end-to end logistics operations starting with robots working in completely automated factories”.

The outbreak will also hasten the transition towards 3D printing, drones delivering directly to site and a reduced need for warehousing, he claimed.

Founder and chief executive of investment banking firm Aquaa Partners, Cuatracasas helps companies mould their strategies to available technology and claimed the outbreak showed “disruption can happen - that disruption will happen”.

“Let’s hope it’s the wake-up call that we need to automate our systems before, God forbid, the big one - an Ebola-type virus - comes along,” he told motortransport.co.uk.

“It’s also a wake-up call to people who realise their jobs are now vulnerable – that it means upskilling and retraining and that they might not have their job in the future.

“Thank goodness industry education and training can be done online relatively cheaply because new skills will be required in the world of automation with all types of new supply chain apps and new developments in transport and warehouse management systems and 3D printing.”

Cuatracasas predicted the pandemic would hasten the development of real-time visibility on tracking: “There will be very few humans involved,” he said. “They will design and manage the systems but not operate them. So more and more jobs will go and they won’t be coming back. We’ll lose a lot more jobs than in 2008 that will be replaced by automated systems and robots.”

While accepting that heavy duty cargo would be “the last thing replaced by drones or some automated system”, he warned that the direction of the sector could be predicted by the technology it was now investing in.

“If you’re running a trucking company you’re going to be awakened by COVID-19,  but really you’re going to say, ‘we want to automate but our business isn’t running trucks, it’s getting goods from one party to another as safely and as quickly as we can at the best possible cost for our customer. That’s the bottom line, that’s the economics of it.

“So it comes back to drones to a certain extent. Drones will be the fastest, the most environmentally friendly way of moving goods and given the awareness of the viral crisis we’re going to see the government and regulatory authorities agree to allow them.”

Asked if the pandemic would speed innovations in truck technology, Cuatracasas said: “Absolutely, look at [American automotive retailer] AutoNation. Its entire business is going to change completely with self-driving electric vehicles. And they can see that every traditional established company operating in the automotive or trucking industry has to get on board.

“The Tesla evidence should be enough on its own, not just how they’ve developed all their trucks, and not just going electric but being automated. And being automated in ways that [founder] Elon Musk would say is different to how other companies are doing it. That should be enough evidence. That’s the way we think it’s going.

“If you’re running a company you must invest or you’ll end up extinct.

“Can you imagine if that heavy cargo is transported in an automatic way without humans? It would be dramatically more attractive to government, if not the companies themselves.”

Returning to drones, Cuatracasas admitted there was still a concern over safety but that robot vehicles would be used in major cities.

He cited online giant JD.com in China as a great case study of a company that uses drones to deliver to remote locations, often hospitals, but has also begun using robot vehicles in places like Beijing.

“They’re 500kg, can go 100km remotely and carry 100kg of goods,” he explained. “It has been easy for these motor vehicles or robots with the streets being empty - they can roam free. The experiment has gone very well. It’s a dollar per delivery cost to distribute.

“The fact that we’ve had the real experience of this in addition to the drones means we’re going to see real change. When a new technology takes off and works is when it starts to take off in other places.”

Cuatracasas said parcel drones would become accepted in the UK because the cost of delivering goods to a home or building is “probably 90% less than delivering through a van or truck”.

“So there’ll be greater acceptance from the regulatory authorities to fast-track drones being used. And in terms of cargo, there are many cargo drone companies that have raised money for this. We’ll see all kinds of new cargo drones being used in an automated end-to-end eco system.

“Ten years from now I would expect to see fully autonomous end-to-end logistics operations starting with robots working in completely automated factories with autonomous telehandlers and forklifts loading goods with robots.

“We’ll have robots delivering these goods from an automated storage factory into an autonomous truck or a drone that then delivers it autonomously and electrically to its destination, which doesn’t even have to be a warehouse. So we now have a reduction in dependency on warehouses because these drones can deliver directly to site.

“It will be from the Amazon lobby probably more than anyone, but you‘ll also get FedEx and UPS lobby government and suggest now’s the time. We have the technology and it works perfectly. Anything that’s new will have accidents but we have to move forward now and rely on less people.

“Look at Ocado in the UK, it’s a competitor to Sainsbury’s but it has technology that sells its systems to supermarkets all over the world. It automates everything as much as it can. It’s even building pipes underground to transport goods to stores or regional centres.”

Cuatracasas also stressed that the COVID-19 outbreak would speed the growing emergence of 3D printing.

“Up to know it has been used to do prototype designs very quickly,” he said, “but over the next five years this will evolve into mass producing certain types of products that will save huge amounts of cost if you can do it on site near the warehouse or end customer without having it transported by truck or rail.

“It’s a total game changer. More and more companies are looking at that, and we’re going to see a real pick up in additive manufacturing, 3D printing. That will replace a lot of how the production process is done today.”

He also predicted that Europe and North America would become less reliant on China as a source of products in the wake of the pandemic.

“That isn’t just due to coronavirus, it’s due to all the issues and threats that have arisen from claims of theft of intellectual property, from terrorists, and from China holding a lot US debt which is increasing.

“It will become, because of technology, more economically attractive to make goods locally. It will fundamentally change the dynamic of why Europe and North America have outsourced products to China. We’ll see the base of suppliers broaden and diversify."