TRANSPORTATION AND LOGISTICS BRIEFING: Waymo, GM eye monetizing self-driving technologies — White House announces new commercial drone program — Blockchain's place in agricultural supply chains

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WAYMO, GM LOOK TO ACCELERATE SELF-DRIVING EFFORTS: General Motors (GM) and Waymo, Alphabet’s self-driving car spinoff, each made announcements this week regarding their new efforts to accelerate the development of their self-driving systems.

Waymo announced it will start testing its self-driving Chrysler minivans in the Detroit area before the start of the winter. However, the company didn’t specify an exact date when the vehicles would hit the roads. The company will store the cars when they are not being tested in its facility in Novi, a Detroit suburb, which it opened in May 2016 to map the area’s roads and work more closely with Fiat-Chrysler, one of Waymo’s major partners. The state will be the fifth in which Waymo is testing its self-driving cars, after California, Arizona, Texas, and Washington. However, the tests in Michigan will mark the company’s first significant trials in a cold weather climate, giving it new insights on how well its cars handle the 32 inches of snow that Detroit averages every winter, and the ice that frequently comes with it.
GM is preparing to launch the fourth generation of its self-driving test vehicles in San Francisco, Detroit, and Phoenix, and plans to test the car in New York starting early next year, CEO Mary Barra told analysts on the automaker’s Q3 2017 earnings call. However, Barra did not offer any details on exactly when these test vehicles would hit the roads. The company just recently announced the third generation of its Cruise self-driving test cars, calling the vehicle the first self-driving car it has designed that can be mass-produced for public use. But Barra said the company is fully focused on developing the next version of its test vehicles, showing GM is rapidly iterating as it expands its self-driving program.

GM and Waymo are already at the forefront of the race to put self-driving cars on the roads. Waymo’s test cars have driven more miles on public roads than any other company’s. Meanwhile, GM is already trialing a self-driving taxi service for employees of its Cruise division in San Francisco, and has laid out plans for building fleets of self-driving cars for ride-hailing services. Moreover, a recent Deutsche Bank analyst note predicted that GM is only quarters away from deploying self-driving vehicles.

These announcements reflect each company's determination to get their self-driving technologies to market before their competitors. In addition to its own potential ride-hailing service, GM has a major partnership with ride-hailing company Lyft, and might also be contemplating one with Uber. Additionally, the company purchased LiDAR sensor manufacturer Strobe to mass produce the expensive sensors that help self-driving cars view the world around them. Waymo, meanwhile, also recently struck a partnership with Lyft, which could be expanded through its parent company’s recent investment in the ride-hailing firm. These new developments indicate that both companies are looking beyond the development of their self-driving technologies to figure out how they will monetize them.

Autonomous Car Shipments

WHITE HOUSE PROPOSES NEW FRAMEWORK FOR DRONE TESTS: The White House launched a new program earlier this week to expand commercial drone tests by urging state and local governments to partner with companies to test drones in their airspace, Reuters reports. The Department of Transportation (DoT) will evaluate applications from state and local governments looking to test commercial drones in their airspace, and will grant approval for at least five tests.

The White House said it hopes the program will open up testing of new commercial drone use cases, including deliveries. Such tests have been restricted by Federal Aviation Administration (FAA) commercial drone regulations in the past. Companies can apply to the FAA for a waiver from certain regulations, such as rules that prohibit drones flying at night, over crowds, or beyond the sight of their pilots. However, many companies, including Amazon, have found it easier to test overseas rather than to obtain the necessary waivers for their tests. The new program will provide an alternative avenue for companies to test drones without having to gain such a waiver.

The program also aims to give federal, state, and local agencies more clarity around how they should work together to regulate drones. Until now, the FAA has held oversight responsibilities in the US. However, some state and local governments have passed their own drone regulations, which have on occasion conflicted with the FAA's stipulations. Recent media reports suggested the FAA has been looking for ways to draw distinct areas of jurisdiction for different levels of government in regards to drones. That would greatly simplify compliance for companies launching drones by giving them clear guidance around which regulatory bodies they must deal with.

Lastly, the tests will help government agencies evaluate how to manage drone traffic for new applications like drone delivery. Law enforcement agencies have expressed concerns about allowing commercial drones to fly over public crowds or in densely populated areas. That is because air traffic control systems that can track and manage large numbers of drones remotely are still in the testing and development phase. The White House said the program will collect information on possible solutions for tracking and managing drones flying at night or beyond the sight of their pilots. If that information can accelerate the development of remote tracking and management systems for drones, it would remove an important barrier for commercial drone adoption in the US.

AGRICULTURAL CONGLOMERATE TESTING BLOCKCHAIN FOR SUPPLY CHAIN TRACKING: Agricultural conglomerate Cargill is testing blockchain technology to let consumers trace the origin of their Thanksgiving turkey back to the farm, The Wall Street Journal reports. The test pilot will involve Cargill’s Honeysuckle White brand, and will use blockchain technology to store tracking data on turkeys from four of the brand’s Texas farms through its processing plants to grocery stores. Consumers will be able to access information about the specific turkey they purchase and the farm where it was raised by texting a code on the turkey’s packaging.

Blockchain technology has specific appeal for supply chain tracking in the food and agriculture industries. Blockchains are distributed data ledgers stored and shared across a network of different computers. Once data is confirmed and added to a blockchain ledger, it cannot be changed or tampered with, and it can be viewed by any member with access to the ledger. This can be incredibly valuable for tracing items through highly complicated agricultural supply chains that involve many partners, including farmers, transportation providers, and grocers. For example, companies can make food tracking data stored in a blockchain ledger easily available to regulatory auditors to confirm they are properly following food safety regulations, cutting time and costs spent on compliance.

Cargill’s use of blockchain is unique in that it is sharing the tracking data with customers to better inform them about the food they’re purchasing. In its press release, the company cited a Nielsen study last year that found 73% of consumers feel positively about companies that are transparent about the origin and source of their products. That sentiment was later confirmed in focus groups the company conducted, leading it to explore new ways to provide transparency to customers about its products, the release said. Blockchain technology, with its ability to easily share tamper-proof data records, provides a unique tool for giving consumers more confidence about their purchases by revealing more information about specific products, particularly in the food industry.

IN OTHER NEWS

Toyota will cut production of its Tacoma pickup truck at its plant in Guanajuato, Mexico by half to only 100,000 vehicles by 2019, according to The Wall Street Journal. This will allow it to start producing the trucks at the facility a year earlier than it had initially planned. That should help Toyota meet the rapidly rising demand for the trucks in North America, as the other two plants that assemble the vehicles are already at capacity.
Southeast Asian ride-hailing company Grab is testing a new membership subscription program in Singapore that eliminates surge pricing for customers for a $50 monthly fee, according to Today Online. The company didn't specify exactly how many customers it is testing the service with, and told Today in an email that it is trying to determine its customers' openness to the service before potentially scaling up the tests. In addition, the company announced it hired former Google and Microsoft executive Theo Vassilakis to serve as its chief technology officer (CTO) after the position was vacant for nearly two years.
UPS plans to test cargo bikes to conduct last-mile deliveries in Toronto sometime in the next few weeks, according to The Star. The company will conduct the tests in a small area in the city around York University, which is near the firm's main Toronto distribution center. The logistics giant said the bikes will be similar to ones that other logistics providers are currently using for last-mile deliveries in Vienna, Frankfurt, Rome, and Hamburg. Conducting last-mile deliveries via bikes could help UPS' couriers avoid time-consuming traffic jams, which lengthen delivery times and can prevent logistics providers from meeting consumers' expectations for fast shipping.

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