Truck-as-a-Service Business Model Creating Sustainable Revenue Opportunities and Transforming Both Developed and Mature Markets

1. Emerging
Business
Opportunity
Technology
Advancements
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
North
America
South
America
Europe China India Russia Next 11 RoW
Units
MCV HCV
2016 Key Highlights 2017 Top Predictions
Global Medium Duty (MD)-Heavy Duty (HD) truck sales recovered by 5% over
2015 levels driven by demand recovery in China, India and Europe.VW’s equity
stake in Navistar marked the group’s entry into North America
Global Medium and Heavy Truck Market
Forecast 2017
Levels of Automation
In 2017 OEM Focus Will be Primarily on Platooning and Level 3 Automation
What are the Services Mobile Apps can Offer?
Big Data and applications such as traffic prediction, sensors and terrain/weather
mapping, ITS through mobile integration and social media integration will make
decision making faster and proactive rather than reactive.
TruckoftheFuture
Platooning
CV Market: Levels of Automation, Global, 2016–2030+
2030+
2015
EnablingTechnology: None
Driver Involvement: Very high
Vocational Application:
Long haul, regional, vocational
EnablingTechnology:
V2X:V2V+V2I, DSRC, integrated safety
systems (ISS), cameras, sensors,ACC
Driver Involvement: Moderate Vocational
Application: Long haul, regional, vocational
EnablingTechnology:
Electric power steering
(EPS), electric braking
systems (EBS), electronic
throttle control,ACC,ADAS
Driver Involvement: High
Vocational Application Long
haul, regional, vocational
EnablingTechnology: Inter-section
assist, redundancy back-up for
connectivity, self-driving capability until
driver takes over control
Driver Involvement: Moderate-low
Vocational Application:
Long haul, regional, vocational
EnablingTechnology:
Multiple redundancies
(hardware) and artificial
intelligence (software) Driver
Involvement: None
Vocational Application:
Long haul, regional, vocational
2018
$5,000
Incremental Costs
$15,000
$25,000
Driver Hygiene
Occupation
Support
“Green”
Eco-friendly•
Fuel-efficient•
Connected•
Business-ready•
Crash-free•
Driver-friendly•
Autonomous•
“Smart” “Safe”
Cost
Optimization
Asset
Monitoring
3PL/ Brokerages
LoadboardsOn-demand
(Uber ofTrucks)
$30,000+
1
2
3
4
2022
2028
Driver Utility
Apps
Fleet Optimization
Apps
Freight
Mobility
Apps
Global MD-HD truck market is expected to absorb 90,000 additional
units in 2017; MCV’s share will increase by 2% on account of slumping
demand in HD-heavy markets such as North America and Europe
Digitization Enabling Industry Evolution towards Service/Solution Model
Confluence of technologies in the Industry Providing Platform for Various Stake Holders to Build Service and Solution Based Revenue Models
Why Digital Freight Brokerage
Freight brokerage can be automated using digital technologies thereby driving greater transparency between
shippers-carriers and supporting d-hoc and planned freight demands at lower brokerage rates
Trucking Challenges Propelling Digitalization
Capacity underutilization, escalating operational
costs, driver retention and rising GHG regulations
are the key challenges that fleet managers face
globally that can be addressed by digital technologies.
Key Challenges for Trucking Industry,
Global, 2017
Shipper calls and/or
faxes shipment
details to freight
broker
Traditional
Freight
Broker
Automated
Freight
Broker
Freight broker negotiates
rates before calling
potential carriers in their
network to find a match
Carrier negotiates
transport rates with
broker
Carrier is notified of
load match digitally,
freight rates are fixed
(5%-10%)
Increases Efficiency / Shortens Supply Chain
Reduction in Cost / Increase in Profitability
Automated solution
automates the load
matching process and
finds the best carrier
Shipper enters load
details into digital
platform
Global MD-HD Truck Powertrain
Technology Forecast
Diesel expected regain some of the lost market share to alternatives
with diesel truck sales accounting for 94.6 percent of total sales in 2017
as opposed to 93.1 percent in 2016
CV Market: Medium and HeavyTrucks-Unit Shipment, Global, 2016 and 2017 CV Market: PowertrainTechnology Split by Region, Global, 2017
Powertrain Split (%)
0.0
94.6 1.9 0.6 2.9
100.0
3.2%YoY Growth 2016 Regional Shares
Next 11 includes the following countries: Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan,
the Philippines,Turkey, South Korea,Vietnam, and Bangladesh.
MCV: 6T to 16T
HCV: 16T and above
GasolineHEVNGDiesel
2.78 MILLION
2016
62%
38%
2.87 MILLION
2017
60%
40%
As sales increases by 90,000 units in 2017, industry will increasingly focus on
offering integrated service based solutions to fleets and owner-operators to
maintain and grow margins
Recovery in China and India was Overshadowed
by Weakness in the Americas
Truck sales recovery in China, India and Europe propelled global truck sales by 5 percent;
Truck demand hit historical lows in South America as economic environment remains
precarious in Brazil
ValueTruck Platforms Attracting Maximum
Traction Globally
More than 60% of new platform development in the next 2–3 years is expected to be in
the value trucks segment.This is largely driven by the growing demand for value trucks in
emerging markets, especially China and India.A majority of the trucks built on such
platforms is expected to fall in the price range of $65,000–$86,000
Freight Mobility
Connectivity Technologies
Online Mobile Ecosystem
Big Data/IOT
Autonomous Technologies
CoreTrucking
Industry Challenges
Digital Transformation
Telematics/
FMS
Trucking Apps
Freight Mobility
Autonomous
Trucking
Business Model Change:Truck as a Service
Automated freight brokers are able to take lower commissions (5%-10%) than traditional brokers (15%-20%) due to the usage of
algorithms which streamline the process and pass on the savings
Autonomous Trucking
Confluenceof
Technologies
Truck as a Service
Fleet
Operations
Freight
Efficiency
CO2/GHG
Challenges
Driver
Management
Trucking Apps