APU Business Careers Careers & Learning Intellectible Podcast

Podcast: The Automation of Logistics — How the Pandemic Has Spurred Growth

Podcast with Dr. Gary L. Deel, Ph.D., J.D., Faculty Director, School of Business, American Public University

and Dr. Larry D. Parker, Jr., Program Director, Transportation and Logistics Management and Supply Chain Management, American Public University

The coronavirus pandemic triggered many changes in the business world. In addition, the pandemic has greatly accelerated the development and application of automation throughout the supply chain.

Start a transportation and logistics management degree at American Public University.

In this episode, Dr. Gary Deel talks to Dr. Larry D. Parker Jr., APU’s Program Director of Transportation and Logistics Management and Supply Chain Management, about technological advancements like driverless semi-trucks and robotics. Learn how organizations are prioritizing automation deployment to lessen person-to-person contact during the pandemic and discussion about the pros and cons of such a fast deployment.

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Read the Transcript:

Dr. Gary Deel: Welcome to the podcast, Intellectible. I’m your host, Dr. Gary Deel. Today, we’re talking about the automation of transportation and logistics. My guest today is Dr. Larry Parker. Larry currently serves as the Program Director of Transportation and Logistics Management and Supply Chain Management with the School of Business at American Public University.

In this position, Dr. Parker leads a phenomenal team of faculty in the delivery of world-class instruction of logistics and supply chain management. An experienced educator, Dr. Parker also served 24 years in the United States Marine Corps as a supply officer, coordinating logistics around the world.

Dr. Parker holds a Ph.D. in organization and management from Capella University, a Master’s in Business Administration from Liberty University and a BA in History from Wittenberg University. Larry, welcome to Intellectible and thank you for being our guest today.

Dr. Larry Parker: Gary, I appreciate it. Thank you. And I appreciate all the little background there. I’m excited to be here and really this is my topic that I enjoy talking about.

Dr. Gary Deel: Absolutely. We appreciate it. And let me start off by saying thank you for your service. We appreciate your contribution to the military and to our country.

Dr. Larry Parker: Thank you for saying.

Dr. Gary Deel: So we’re here today to talk about automation and transportation and logistics. And I think this is a pertinent topic, both in general, but also specifically now in the age of COVID and everything that’s happening with that. So I wanted to touch base with you on this because it’s something I’ve been talking about for years in different contexts.

My background is hospitality and hotels and tourism and travel, but I see the transportation industry as perhaps being the most dramatically affected over the next five, 10, 20 years, depending on how long the timeframe for transition takes to a driverless, conductorless, pilotless, operatorless, system of moving people and goods from place to place.

Are you seeing that as well? Do you think that this is something that the transportation logistics industry needs to be as worried about as I think they do?

Dr. Larry Parker: You actually hit right on it. I mean, this is something that really needs to be at the forefront of most leaders of organizations. And that’s speaking beyond just those that are primarily logistics organizations. When people think logistics, they think just the big names in the industry, but because we have global economy, transportation is important to everyone and this really affected everyone, every industry.

Dr. Gary Deel: Absolutely. And to me it’s most apparent in transportation logistics only because there are so many people working there. And when I walk into for example, to a Walmart or Target, and I see — it seems like week after week, month after month — another traditional checkout counter has been replaced with an automated kiosk. And I say to myself, this is the end of the retail environment as we used to know it or the beginning of the end.

But in transportation logistics, I follow closely what’s happening with technological advances and for example, on the road, I mean, I guess we could start there. I know that you’ve been involved outside of academics in trucking logistics, and I happen to own a Tesla that has Tesla’s autopilot system equipped. So I’m pretty familiar with what the bleeding edge is there and the horizon for that according to experts like Elon Musk, who has his entire company devoted to this effort.

Seems to be that we’re looking at, sooner rather than later, an entirely driverless environment on the road that would ostensibly be available, not just to consumer vehicles, but to transportation and logistics, vehicles, trucks, and rigs of all kinds.

Dr. Larry Parker: You hit right on it. I got personally into the industry about five years ago and started my company and quickly learned that the most critical component was the driver. The most difficult thing to get for any company was a driver.

And the unfortunate thing is finding individuals that were qualified, capable of driving and sustaining that, that was the driver. And so now, as this technology has come on, as you said, global economy, there’s no shortage and need, but the one component that is in greatest shortage is drivers.

And so this automation is right on time in trying to meet that demand. And the funny thing is that as much as everyone was trying to push it before — and I can’t say funny — I will say it’s because of the pandemic, people just see the need now.

So automation right there in itself is showing that it can solve that problem, that we’re having. You have a shortage of drivers, and that might succumb to something as much as an illness like this and some of the other issues that we have with it. So yeah, this is something that I’ve been watching.

Dr. Gary Deel: Yeah, I think there’s long been a motive for corporations and companies to transition wherever possible to automation, for the reasons of better, faster, cheaper, where possible. And I think in automation and logistics, you could also start to make an argument today about being safer.

In the sense that, I just read an article the other day that said that the rate of vehicle crashes per so many miles in Tesla as well, operating on autopilot. And this is of course just in their consumer fleet; they don’t, as far as I know, have any of their commercial rigs that they’re building out in circulation just yet. But that the rate of car crashes or incidents of collisions of any kind is roughly 10 times lower or 10% that of the rate of collisions among the average population where just the human is behind the wheel.

And so I can certainly attest to the fact that the autopilot in a Tesla is not perfect yet; that’s been my personal experience. But I can also attest to the fact that in many regards, it is better, faster and safer than a human being, because it’s never distracted by a text message or reading the newspaper, doing any other thing, well, in a car that you shouldn’t be doing while you’re behind the wheel.

And electrical circuits are so much faster than biological ones, that the reaction time itself to an instance of something running out in the road or a car cutting you off is dramatically different in a better way. It’s better than the human reaction time could ever hope to be, even in the best circumstances.

So I think that that was always a factor, but now, of course, as you pointed out with COVID, there’s a new component to that, which is that we’re trying to keep people safe from exposure to each other. Frankly, we don’t know who has it and who doesn’t, and so everyone’s practicing or trying to practice social distancing.

And any humans that you can remove from the stream of commerce to get things from place to place, I think is an effort or it could be sold in a way, in an effort to try to limit that potential exposure.

Dr. Larry Parker: Hey, that’s a great question, Gary. As I start to think about the impact of automation and the benefits of it as this pandemic has taken hold, it truly is, I guess, the critical nature of removing the human element out of transportation.

From just the trucking aspect, the driver is the most critical component. And when you can increase the efficiency or the safety of the operation of the vehicles and keep them rolling when drivers are no longer available or in short supply, that is truly the benefit of automation moving forward.

And I can tell that a number of individuals in leadership of organizations — not just transportation-specific organizations, but organizations as a whole — are now seeing the value in automation. And where they may not have been believers or supporters before, COVID has truly opened their eyes for it to be something that they’re interested in now.

Dr. Gary Deel: Absolutely. I think that that’s fair across all industries, as well, as I mentioned earlier, you’re seeing it a lot in retail and even in hospitality, my primary focus and discipline, where you have hotels and theme parks and restaurants that are finding creative new ways to automate and to eliminate people in the chain. Again, with the express intent of trying to, at least in this time of a global pandemic, limit the exposure of people to people.

It also of course, has the ancillary effect unfortunately, of creating what I think is quickly culminating in an economic crisis where a lot of these positions I don’t think will return. That was already happening before COVID, but now the acceleration to that, I don’t think there’s any reason to think that these jobs will come back after the COVID pandemic has subsided.

Dr. Larry Parker: I agree. That’s a great assessment. From our perspective in the industry, what we’re seeing in supply chain, slight different in logistics, logistics at a lower level, at supply chain, when you’re looking across how things are being delivered, COVID has caused leaders to look at where the weakness is. And the weakness right now is, unfortunately, that human aspect of it.

And so we’re going to automate; we’re going to bring in robotics. And because individuals were taken away from their job, it gave the industry an opportunity to hit pause and say, now is the time to invest in it.

And you’re absolutely correct, after investing in any kind of automation or any kind of application, the next thing is to have a trained workforce, someone who’s going to be able to do that. And it only makes cost benefit to reduce workforce, that’s the only reason we’re automating.

We automate in order to save labor and increase efficiency somewhere. So that’s a spot-on assessment, that is something that we’re seeing in the industry and we can expect.

Dr. Gary Deel: I think it’s important to note that obviously this extends far beyond trucking too, because we’ve been focusing on the proverbial roadway. But robotics as used in warehousing and distribution, I’ve seen in depth exposes into the Amazon distribution centers or fulfillment centers and how they have, I’m not sure what else to call them other than robo-shelving units, that line up. And when something is ordered, they make their way to the front of the warehouse where the people awaiting can pick parts or products off.

And so there’s less time in transit, walking up and down the shelves of a huge warehouse to find what you need and to put it in a box. And that, to me just is okay, doing more with less people and I think that’s going to be a big component of it too. Would you agree?

Dr. Larry Parker: Absolutely, Gary. We have moved away from just doing trucking or being concerned with automation and where it’s affecting or where it can actually benefit the logistics industry. In warehousing as you were alluding to, it’s scalable from the very first level of things that can assist pickers, individuals who are actually going through the warehouse. There’s robots who just assist with moving things around.

And then there’s a full-level robotics where they actually go and pick. There’s another layer that’s been tossed on of wearables. Things that the actual individuals who are in the warehouse, if it’s complicated, difficult, or things need to be put together or packed in a certain way that robotics doesn’t lend itself, or it’s not cost-effective for the company.

Just imagine a virtual headset, something that has an overlay to the warehouse, and it shows the most efficient way to pick depending on the order. So now you’re eliminating a lot of wasted steps, a lot of wasted efforts, and so that’s just an indication of what you just said.

Dr. Larry Parker: There’s a lot of solutions that are out there that are on the horizon to make individuals more efficient. But to draw it back to an earlier discussion that we just had, likely reduce the workforce or need the workforce to be more comfortable working with technology.

Dr. Gary Deel: Definitely. And I hadn’t considered all the different ways that that might reveal itself in the industry.

I guess the elephant in the room — we touched on this a moment ago for a minute — is with respect to the economic impact for workers. What does that future look like for people currently employed in transportation and logistics and perhaps even in a warehouse and distribution of goods? Is there a light at the end of the tunnel? Is there a hope for some type of retraining?

It would seem to me looking from the outside in, that the jobs that will be required in the future as it pertains to this are so technical in nature when it comes to the design development, manufacture of these machines that will do most of this manual labor for us. Is it reasonable or realistic to expect that the transportation and logistics workers, which I believe more people around the world are employed in that industry collectively than in any other, that there’s a reasonable hope that they will be able to retool to maintain some sense of livelihood and ability to earn an income?

Dr. Larry Parker: Great point. As automation starts to take hold and we see the benefit, because as supply chain management overlooks the entire realm of logistics or the span of moving products from one place to another, it’s the human element that we see in different places. And so we recognize that individuals will have to be trained, will have to be comfortable with utilizing these tools.

So that is going to require them to go back and become subject matter experts or learn how to work along and coexist. There are certain things we can’t get away from, for example, port masters or individuals that are working on the docks.

There’s certain things that it’s hard to predict within a sense of automation or artificial intelligence, the movement of the seas and the actual on-the-ground movement, that will require someone to be there. The actual movement of the trucks, there’s a human, and there’s a real-world element to that.

And for a while there, there will still need to be people who are familiar with the real impacts, depending on the level of automation that’s brought in. The individuals that are closest to the products may have some of the greatest impact because once robotics comes in, once certain other things come in, yeah, it will be a reduction in personnel.

And then the engineering, the individuals who are hiring management, those individuals may likely increase slightly because you need someone to be able to decipher, be able to tell the real-world impacts, the analytics that comes from it. So that’s my feeling on the job or the employment aspect.

I recognize there will certainly be a technical need for maintenance of equipment and of general technical work in the field, whether that’s production of machines that perform the work or maintenance of machines that perform the work.

But I think it’s also interesting to note the advances in technology. And I think you had alluded to this earlier, Larry, is for example, with electric motors, to the extent that they can be built in a way that is comparable and makes them competitive with the traditional use of like a diesel engine for either a ship or a truck going down the road, the lack of moving parts and the lack of complexity to say, like a brushless electric motor would dictate that there would be far less maintenance on those components than what currently exists.

Dr. Gary Deel: Some of these are anticipated to be million-mile motors with virtually no need for any kind of intervention or maintenance. So I think even in the technical world, I’m curious to know if you would agree that there’s probably going to be a reduction in that labor force, just based on the fact that the technology will get more reliable and less complex over time.

Dr. Larry Parker: I would agree with that. And as we mentioned, I actually own a company in this realm and it made me think about it. Some of my major costs were call-outs, call-outs for repairs and I’ve thought about the type of repairs, transmissions, other things that we mentioned that would not likely be an issue with the advancements that we have.

But then I thought about it: Should there be a technical issue just like we said in the testing, there’s an engineer and a driver that’s in the vehicle. What does the call-out truck look like in the future? Is that an engineer that’s on call for as long as there’re still tires that are susceptible to being flat, because I actually had those issues.

Beyond that, is there a diagnostic reset that that individual can do on the ground and is that totally different equipment set? And does he call back to someone? So that is very interesting. I can agree with you. Certain tools won’t be required, and it may not be that same old tow truck or something that’s needed now.

Dr. Gary Deel: Absolutely. We’ve spent a lot of time focusing on trucking and over-the-road transportation in this episode so far. Do you think it’s just as likely to see that for, I think trains is a given if I can, because I know that a lot of that already operates in a very automated way. Not necessarily with freight trains, there’s still a conductor, so to speak, but with some forms of people-moving transportation, that don’t require the intervention of someone.

I know here at the Orlando Airport near where I live in Central Florida, there are trams and terminal monorails that run to and from the terminals. And there’s no driver; they are just an automated system that goes back and forth.

So I think given that these trains and trams run on a track that doesn’t require navigation of road signals or turns and twists, and there’s very little worry about obstructions or pedestrians walking out in front of you on an elevated train track, at least, then those are fairly simple.

But how about ships and planes? Do we think that at sea, there will be the same automation that is already taking place on land?

Dr. Larry Parker: Yes. And to be quite frank, actually the adoption of a great bit of automation, is, it depends on the level of comfort that humans have with giving up control. And you spoke on it when you said at airports, and there are certain rails and things that are controlled and closed systems.

And a lot of that has come from individuals being okay, they can accept it. I think people would be surprised to see how much of their flights is actually on autopilot.

And I had friends in the industry that said until people can get comfortable with turning over control, there will always be someone sitting in that seat. Because really once they take off and they get on their designated routes, it’s really just monitoring systems and a great deal of the flight is being handled by that automated system.

And they’ve already tested it, taking off and landing some of the larger planes, in the same way with shipping. And to be quite frank, when it gets back to the transportation and logistics, we’ve actually got an approval within the industry to see package delivery and that’s being tested.

Dr. Larry Parker: So just as we know in trucking, and there was a little buzz, there for a little bit about receiving certain packages from industry, that’s actually been approved and it’s actually being tested. So just out in Arizona, there’s testing of the trucking; out here in Virginia, there’s testing of packages being delivered and that’s being tested this year.

And that just coincides with how things are going with the virus. And the timing is now to not have to utilize people for those things.

Dr. Gary Deel: Absolutely. And I think you bring up a good point and that is the adoption rate of consumers and users of this technology. I think in a lot of the chain of logistics and in transportation, some of that may be a moot point because of course, your average person isn’t necessarily involved with the B to C or even A to B transportation for businesses, that’s all just in the supply chain.

But you’re right, in that technology needs to be adopted en masse by the users, whoever they are. And I think about when I invite people into my Tesla and we go places, whether we’re just driving down the road or whatnot, if autopilot is on and they’ve never been exposed to that, there’s almost invariably a reaction of nervousness, of uncertainty. Even despite my reassurances that I’m familiar with the system, I know what it’s capable of, and we’re fine, as long as you’re operating it safely, there’s this little bit of apprehension that comes from that.

And I think you pointed out earlier, same is true with the idea that airplanes are flying themselves and that there’s no one behind the “wheel” so to speak.

But I think now the catalyst that’s interesting is that these businesses no longer need to lean on the sole motive that they’re doing this to reduce their overhead expenses and to increase their profitability. But now there’s the excuse that we’re moving in this direction so rapidly and so drastically, because we’re trying to keep people safe in the COVID era.

And I wonder how that’s going to play out in terms of people understanding this change to a new technology. Whether it’s, I mean, you could look at Target and Walmart and where these automated kiosks are going in, which is not so much transportation logistics, but it’s at the very end, obviously of the supply chain.

And I wonder if that’s going to have an effect on the empathy that customers have, that the general public has toward these transitions saying, “Okay, well, I may not be super comfortable with the technology, it may not be my first choice, but I understand why we’re going in this direction because of public safety, essentially.”

Dr. Larry Parker: You raise an interesting point, and really we can have a completely separate conversation just on the emotional or social aspect of replacing individuals for the sake of costs. Because, unfortunately, we could probably point out a number of situations that if it were not for cost, certain jobs would still exist, that certain industries may still be in existence.

But, ultimately, for the sake of cost, reduce costs, because consumers eventually just want to pay the company that’s going to provide them the product that they want at the best price. And if by way of automation it’s happening, sometimes they look past that; you hit right on it.

Using our old business sense, one of the most expensive things in any kind of business typically is labor. And one of the fastest ways to improve a bottom line is to reduce labor. And that’s an uncomfortable thing. No one wants to hear about reducing jobs.

And this pandemic caused both a safety issue and a labor issue and it gave a real-world, I won’t say that they utilize it as an excuse, but it was a real-world reason to reduce force, reduce structure, or at least cause structure to leave. And because the impact it had on it economically, they said, okay, we can’t sustain it as, as is, and now this is all the reason why we need to speed up automation and move to something else.

Dr. Gary Deel: Sure. Well, speaking of the speed of automation, I know that it’s difficult to gauge because a lot of this is conditioned upon not just development of technologies that may not be in existence or perfected at the moment we’re having this conversation, but also on the mass market availability of those eventual technologies and the affordability to where they make sense for businesses to invest their capital and time in making the switch to.

So I guess if I had one point of curiosity from your perspective on the industry, as someone who follows this as a professional career, what do you think that timeline horizon looks like to a future where all of our big rigs and all of our airplanes and all of our ships at sea are operated with the same comfortable automation that we, as we walk through an automatic door, we don’t worry about it crushing us to death. Are we decades away; are we years away?

Dr. Larry Parker: No, actually many would say we’re a decade away. Again, going back to you and I being fans of automation in this way, we see that the different levels of automation are improving each year, but many would say 10 years, most in the industry say 10 years. There’s a smaller component that says five years, because we’re really on the cusp of some of the other technology.

But really accepting it, I think because of this pandemic and there is such a greater push from everyone to do things safer and more cost-effective. I would say we’re probably in that mid-range of five years, three to five years, where we’re really getting that bow wave, that area that you need to be when something is totally accepted, in a consumer base, we are closer because of the pandemic.

People will understand it, organizations are willing to invest in it. And we see how within the matter of two to three months, there’s a total culture shift in how you go into stores now and things. That’s the type of thing that needs to happen.

Dr. Gary Deel: Yeah. And I think to be fair, there probably will be stages of this. I had read articles previously that had discussed how, with respect to going back to trucking.

The first, the initial stage might be to have auto trucks handling the highway routes, the main hauls, and then that these trucks would stop and dock somewhere at a parking station at the end of their journey. And often exit somewhere, whether that’s a highway, rest stop or wherever, and the drivers would then step inside the cab and take the truck from its highway route to the final destination, through the service roads that are more difficult to navigate and less precise.

Because most of our highways are obviously clearly marked and fairly well maintained, and there’s on-ramps and off-ramps to keep things moving. There’s no red lights; there’s no stop signs; there’s rarely people crossing a highway on foot. So those obstacles or those challenges are largely eliminated on the highways, but the service roads are what are more complicated.

So I’ve seen proposals that perhaps a middle ground or a stepping stone to full automation will be highway auto trucking, and then some version of manned driving on that last little bit, both out of the point of origin and into the point of destination.

Dr. Larry Parker: And that’s a good assessment of what’s likely to be most accepted by the general public. And if you think about it, take a step back, doesn’t that similar approach, or at least it simulates or replicates the air example.

The pilots, they get it off the ground and as my colleague once said, people want to see a pilot in the seat for the takeoffs and for the landing. And for whatever reason they seem to feel once they’re in that open space and like you alluded, the highway if you will, with less encumbrances, they’re okay with it for now.

And so I can see why that was such a more palatable scenario for automated trucks. Traveling either at a time at night as well, that is less busy until they just get to a point where there’s percentages. There may be a slide, a scale of so many shipments per day can go automated trucks for that last mile at some point.

And so that’d be that final transition, I believe. But I think the air is an example of those that will need to see it down the road.

Dr. Gary Deel: Sure. Any closing thoughts before we wrap up, Larry?

Dr. Larry Parker: Well, the one thing I would say is this is an exciting time. We can learn a lot from the changes that we’ve had to make due to the pandemic and the economic situations here. The challenges that we see now, I know a number of people see getting online, getting not enough bandwidth, these are the things that now as we’re moving into a more automated, data-driven world, those are some of the challenges we’ll see in the future.

So I say, just stand by. These are exciting times. Logistics is one of the last industries to really take advantage of this, but we’re really going to see some exciting things during this time.

Dr. Gary Deel: Perfect. Well, I want to thank you for sharing your expertise and perspectives on these topics. And thanks for joining me today for this episode of Intellectible.

Dr. Larry Parker: Absolutely. I appreciate it. Thank you.

Dr. Gary Deel: Perfect. And I also want to thank our listeners for joining us. You can learn more about these topics by visiting the various APU-sponsored blogs that our university produces. Be well and stay safe, everyone.

About the Speakers

Dr. Gary Deel is a Faculty Director with the School of Business at American Public University. He holds a J.D. in Law and a Ph.D. in Hospitality/Business Management. Gary teaches human resources and employment law classes for American Public University, the University of Central Florida, Colorado State University and others.

Dr. Larry D. Parker, Jr., currently serves as the Program Director of Transportation and Logistics Management and Supply Chain Management with the School of Business at American Public University. He serves as an adjunct faculty for various universities around the world. Dr. Parker is a native of Temple, Texas, a certified Inspector General by the Association of Inspector Generals, and a proud member of professional organizations advancing knowledge and professionalism, such as the Association of Supply Chain Management and the National Naval Officers Association.

Dr. Parker is a published author, inspirational speaker, consummate entrepreneur and consultant who speaks worldwide on the value of education. He holds a Ph.D. in organization and management from Capella University, an MBA from Liberty University, and a B.A. in history from Wittenberg University. Dr. Parker has a long history of passion and interest in local communities and is a proud member of Kappa Alpha Psi Fraternity, Inc.

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