July 7, 2018

Autonomous Vehicles and Agri-Food Value Chain

Robotaxis, shared autonomous vehicles (AV), will transform the future of international trade especially the agri-food value chain within a country and across borders. In few years, people will board robotaxis by scanning a Quick Response (QR) Code with a standardized app such as Alipay or WeChat pay, or a prepayment through the company website or app. Farmers, processors, and vendors can easily car pool and the delivery of processed and raw foods will be done by stakeholders coming together to work jointly to get to the farm, share delivery like my family friends’ organic coop, and import and export produce together at a reduced rate through profit sharing. This is especially important where freight is transported across borders via land. According to Fagnant and Kockelman, autonomous vehicles may lead to safer roads, reduce traffic congestion, and a maximum of $US4750 societal benefit per AV in a year. The associated costs are liability and privacy concerns.

Autonomous Vehicle
Autonomous vehicles, driverless vehicles, are becoming popular though with reservation from certain quarters on the issue of employment and the limits of automation. In order not to be a laggard, most automobile companies have started working on their AV. Though research and development is at intense level the first set of AV will probably be shared by consumers as ride hailing and ride pooling services – to recoup the cost of production until the innovation becomes cheap to procure. Examples are Waymo’s activities in Phoenix, Arizona, Uber’s in Phoenix and Pittsburgh – though temporarily stalled as result of a fatal accident, Voyage’s services in retirement homes in San Jose, California and Florida. Navya, a French company is already shuttling downtown, Las Vegas. Another French company, Easymile, is operating in 20 countries (Asia Pacific, Middle East, North America, and Europe) with it’s EZ 10 driverless shuttles.

The market has few players so it is oligopolistic and new players may be disinterested because of entry barriers associated with AV. The leader in the market is Waymo, which is active in both hardware and software development. Nvidia, Mobileye are other big players in the hardware sector while Aptiv is a top software developer. The degree of automation varies. Some, for example, Shenzhen Haylion Technologies, have tested only a few kilometers. Players in Sweden, such as Nobina and Ericson, are not completely autonomous because of regulation while Waymo is already using its mini-vans to transport people in Phoenix, Arizona to their daily activities.

Limits of automation
As we explore the use of artificial intelligence (AI) and machine learning in the mobility of people, we should take in to consideration that people drive for many reasons including their freedom, convenience, as a signaling device and to be respected by their friends and family. Furthermore, AV will create a disruption in the trucking business and enable little or no need for professional drivers. My interactions with several people including students (in business schools and development programs), professionals and, friends come with a little bit of reservation. Concerns include “what will people do?” “Why do we need AV?” “What are the ethical implications?” “You guys are just interested in creating unemployment and underemployment!” I don’t have answers to all these questions, but I am positive we need the disruption to enhance our quality of life and guarantee safety in mobility and specifically the agri-food value chain. Logistics will be enhanced, transaction costs reduced and corruption discouraged. Drones now deliver parcels in villages in China courtesy of JD.com even though Amazon started the idea but implementation has been delayed. Imagine what will happen if an AV can pick up coffee from Moshi (Tanzania) and transfer the product to Kilimanjaro airport for export to other parts of the world. Traceability will be better because data must be entered correctly before the AV commences the journey. Monitoring will be via satellite and global positioning system (GPS) – very easy nowadays.  Maybe there is an ethical dilemma but we need to advance and create a safety net for the people who will be affected. We should also try to prepare people who might lose their jobs on how they can retrain or acquire appropriate skills as their displacement becomes imminent.  As this sector develops, policy makers need to catch up with workable policies. For example, who should be liable when an accident is caused by an autonomous vehicle? The insurance policies required are an as yet unresolved issue.

Disruption: Niche market
The mobility market is ripe for disruption. Already there are challenges with traffic congestion and pollution in big cities – this is a global phenomenon. When I sweat and I wipe my face with my handkerchief, it’s brown in small cities and towns but black in big cities. To reduce the impact of our lifestyle on climate change, people are already carpooling and using public transit. Based on the recent trend, I think AV will take carpooling and sharing to a more ideal level in terms of ecological footprint. Locally in our alternative food market, friends order online from an organic coop and delivery is to one of the members for distribution or pickup at a selected place. People order for organic food and veggies for delivery on platforms such as my fresh city farms (veggies, organic salad and smoothies and other locally grown produce) and goodfood2u. Efficiency may be enhanced if these organizations have access to AV, they rely on volunteers to reduce cost and not all volunteers are altruistic. The resuscitation of the silk road, also known as the one belt one road (OBOR), coupled with AV will transform the way we order, move and consume agricultural products globally.

Trucking business with AV
Locally, ordering online is growing in the ethnocultural food and alternative agriculture market. The use of AV will strengthen these markets. Furthermore, the use of mobile abattoirs will make slaughtering more appropriate and consistent with the tenets of halal. With mobile abattoirs, animals don’t need to travel and face the associated stress and all activities will be done on the farm. Monitoring is easier. Autonomous (driverless) mobile abattoirs will create an environment where lovers of halal (or kosher) will access their authentic preferred meat. With cross border trade, trade facilitation will be enhanced. This is expected because trade facilitation concepts such as single window, one stop border posts, publication of information about customs, automation, and harmonization of processes and procedures which remove non-tariff barriers will be easy to implement with driverless trucks because all the necessary data are inputted and transmitted before the trucks leave the exporting country.

With the introduction of AV community plots owners can share MOIA to their community garden. Waymo can be involved with the delivery of fresh and locally produced fruits and vegetables and Uber and Starsky can scale up and improve their services across borders starting with US, Canada and Mexico.

To conclude, it is important to mention the impact of long distance driving on the health and social life of the drivers. I have interacted with people who asserted that driving a truck leads to health complications later in life often coupled with breakdown of relationships with friends and family members. If this turns out to be true, driverless trucks will enable drivers to spend more time on activities that will increase their life expectancy and strengthen their social interaction.

Bamidele Adekunle, ECVOntario, SEDRD, University of Guelph

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