Why Truck OEMs are excited about Trucking-as-a-Service

TECHNOLOGY is transforming the logistics companies we’re so used to working with.

Autonomous trucking, artificial intelligence (AI), and the internet of things (IoT) are really making a big dent in the way the industry works, but they’re also fuelling other changes in the industry, all aligned with the ultimate goal of moving to a Trucking-as-a-Service (TaaS) or Transportation-as-a-Service (TaaS) model.

In its simplest form, TaaS is about supply chain operators gaining access to trucks on-demand, be it an autonomous truck or one that is driven by a human.

In either case, however, the truck will need significant telematics and support to ensure tracking, mapping, management, and optimization of routes.

In fact, according to Frost & Sullivan, the surge in service and solution based revenue streams following the rise in digital transformation, autonomous trucking, urban trucking, platformization, and dealership evolution is expected to propel the US$11.2 billion TaaS market toward US$79.42 billion in 2025.

Further, according to the team, digital freight brokerage is expected to be the biggest market segment with revenue potential of US$54.2 billion, while the telematics devices segment is anticipated to grow from 25.7 million units in 2018 to more than 73.1 million in 2025.

What’s most interesting to note, however, is that the rise of TaaS will make life much easier for small businesses looking for new, innovative, and cost-effective ways to transport their goods, within the city and outside the country.

With the e-commerce boom in the APAC coming quickly, TaaS will be a game changer for small and mid-sized businesses looking to reduce costs and provide more timely and better delivery experiences to customers.

Truck OEMs keen on helping TaaS take-off

Truth be told, truck original equipment manufacturers (OEMs) such as the Traton Group (formerly Volkswagen Truck & BUs), Daimler Trucks, and Volvo Trucks are driving the industry’s move to TaaS as a result of their investments in connected, autonomous, digital, and smart services,

Volvo, for example, recently introduced Volvo Connect, a new customer portal that offers a single interface for digital services and functions, Volvo Trucks makes it even easier for customers to access the full benefits of digitalization and connectivity.

“Volvo Connect will also contain a marketplace where additional services can be subscribed to and activated. Users can adapt the interface so that the information and services most important to them are quickly and easily accessible,” explained Volvo Connect Product Manager Carina Holm.

Traton and Daimler are making similar efforts and also trialing subscription services in certain localities and regions.

In the future, Frost & Sullivan believes Truck OEMs will generate new sources of income as a result of the digital services they offer.

“OEMs will be looking to deliver new services, such as automated freight aggregation, as a value-addition to their fleet customers,” said Frost & Sullivan Mobility Analyst Silpa Paul.

Here are five new revenue opportunities that TaaS will create for OEMs (and dealers):

# 1 | Collaborate with startups

Investing in start-ups involved in digital technologies. This will help OEMs cope with a highly integrated ecosystem of real-time diagnostics, online booking of services and repairs, remote repairs, assisted repairs, remote diagnostics, and prognostics.

# 2 | Build a better omnichannel CX

Leveraging omnichannel customer touchpoints to develop a seamless, personalized customer experience across digital and brick-and-mortar channels.

# 3 | Score bigger deals online

Developing a robust CRM program that can convert digital sales leads, build customer loyalty, and sell after-sales services and maintenance.

# 4 | Collect customer data post-sale

Differentiating through a connected after-sales offering. This will enable OEMs and dealerships to gain additional insights into customer behavior.

# 5 | Offer new technologies as upgrades

Servitizing new technologies such as advanced driver assistance systems (ADAS), safety, health, wellness and wellbeing (HWW), and driver training.

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