Paccar uses predictive technology to stock its shelves and repair its trucks

[ad_1]

In the future, the 18-wheelers that crisscross the country with packages and other goods could end up becoming more like large, rolling computers. 

That’s one theory at Paccar, according to Bart Lore, a senior director at the Bellevue-based truck manufacturer.

Lore, who is based in Texas but visited Seattle for the company’s annual shareholder meeting Tuesday, is leading Paccar’s global connected services, a combination of hardware and software that helps trucking companies analyze data about their fleets.

The new system will eventually allow companies to use that information to make decisions about operations and predict maintenance needs before they interrupt a long-haul route.

“That is the future,” Lore said. “But it’s not too far away.” 

Paccar, like many companies today, is looking for high-tech ways to make trucking safer for drivers, more efficient for customers and more environmentally friendly. 

A lot of companies are banking on self-driving trucks to ease some of the burdens on drivers and help staff up as the industry increasingly has trouble recruiting new hires. In the first half of 2021, investors committed $5.6 billion to autonomous trucking companies, according to PitchBook. Funding for logistics startups, the part of the trucking business that focuses on moving goods through the supply chain and from one place to another, is also growing, with the majority of funds headed toward companies developing solutions for the last-mile of a delivery, according to the consulting firm McKinsey and Co.

From electric trucks to self-driving trucks, Paccar has invested $7.3 billion in new facilities, products and technologies over the last 10 years. This year, it expects to spend up to $400 million on research and development, according to its most recent financial data released Tuesday. 

“In this business, with good people, you figure out ways to solve things,” CEO Preston Feight said in an interview Tuesday. “All of us, across every element of our business, are using technology to move forward in big ways.” 

The financials

The first quarter of 2022 — the three months between January and March — was the fourth-best quarter in the company’s history, Chair Mark Pigott told shareholders visiting Paccar’s distribution center in Renton. 

That quarter, Paccar reported net income of $600.5 million, or $1.72 earnings per diluted share. That’s up 28% from the same time last year, when Paccar recorded net income of $470.8 million, or $1.35 earnings per diluted share.

Revenue also jumped to $6.47 billion that quarter, compared with $5.85 billion the year before, with Paccar’s parts business accounting for the majority of the funds and its financial services business bringing in about $147 million. 

In the first quarter of 2022, Paccar spent $113.5 million on capital investments, including $78 million on research and development. Feight said it was hard to break down how much of that $113 million went toward infrastructure, since a lot of that overlapped with dealers and other Paccar customers. 

It estimates sales for Class 8 trucks, one of the ways to classify heavy duty trucks, in the U.S. and Canada will reach somewhere between 260,000 and 290,000.

Before sending shareholders to poke around Paccar’s trucks and dig through a goody bag under each chair that held a complete car washing kit, Pigott said he wanted to address the numerous questions he got on one topic: Russia.

Paccar does not have a factory in Russia, he said, and there are “no operations ongoing at this time.” 

The company has 18 distribution centers in 11 countries. In Washington, it has eight facilities, including its complex in Renton, its headquarters in Bellevue, a technical center and test track in Mount Vernon and a division devoted to its Kenworth trucks in Kirkland.

It has 28,000 employees globally, and 3,000 in the Puget Sound region.

The technology

Paccar’s tech investments range from an app store designed specifically for trucking companies to electric and autonomous trucks to software systems meant to harness data and analytics. 

In 2019, Paccar announced it was expanding its assembly plant in Ohio, adding new technology that would measure the vibrations of some machines. 

By keeping track of what vibration activity is normal — and what isn’t — Paccar can more easily pick up on machines that need maintenance, making the repairs before it affects the rate of production. 

Paccar also uses predictive technology to stock its shelves, Feight said, anticipating what the customer needs and the trends of the industry. 

On its trucks, it has offered a connected solution for one of its models — DAF trucks — since 2014. In 2021, it rolled out Paccar Connect, a next-generation connected truck system, in Europe. In spring 2023, it plans to launch that system in North America. 

The connected platform offers customers a batch of data every 20 minutes, according to Lore, the senior director for connected services. Right now, Paccar offers similar analytic tools in an “ad hoc” way, Lore said. The new system will ensure the “analytics are happening in the background.”

It’s meant to maximize “uptime,” Paccar’s lingo to describe the minutes when the driver is actively behind the wheel, moving goods around the country. With the predictive technology piece expected to come, Lore said, customers can then use drivers’ “downtime” for maintenance, so they don’t have to pull over 50 miles into a 500-mile route.

Meanwhile, Paccar is investing in new ways to make its trucks electric and autonomous. 

Aiming to reduce vehicle C02 emissions 30% by 2030, Paccar is focusing on three solutions for its electric trucks: batteries, hydrogen fuel cells and hydrogen combustion. 

So far, Paccar has seven battery electric vehicle models.

“There’s much ado about companies that are going to bring trucks to the zero-emissions vehicle world but haven’t done so yet,” Feight said. “It’s early days in the market because of infrastructure and cost and everything else, but Paccar’s got the technology on the road with our customers.”

When it comes to autonomous trucking, Paccar is positioning itself to be ready “when the market’s ready, when society’s ready, when regulations are ready and the technology is ready,” Feight said. 

It has partnered with many of the big names in the autonomous tech competition, including Aurora, Embark, Kodiak and Waymo, Google’s self-driving project.

In Texas, it is testing its autonomous trucks with Aurora’s self-driving technology and FedEx loads on a 500-mile round trip between Dallas and Houston.

In the race to develop autonomous trucks, Paccar is jockeying with its trucking counterparts, including Daimler and Volvo, as well as startups and tech companies like Tesla, San Diego-based TuSimple and Pittsburgh-based Locomation.

Feight estimates Paccar has 100 autonomous trucks on the road today. In those test runs, there’s still a driver behind the wheel, hands off but ready to intervene. 

Other companies, including Waymo and General Motors’ Cruise, have started testing autonomous vehicles without a driver, but Feight expects it will be some time before that becomes the norm.

Instead, there will be a “step change.” In a few years, a truck driving on a specified route in Texas might not have a driver at all, but one on a snow-covered road in Minnesota might still have a human behind the wheel.

Right now, technologists are still working on the best way to get a vehicle to think like a human, Feight said. For example, if a human driver sees a ball bounce into the road, they expect to see a child running after it. A truck wouldn’t make that same assumption. 

“The truck has to get to where it anticipates those kinds of things,” Feight said.

At the same time it’s working on futuristic autonomous tech, Paccar is also developing an app store, according to Lore. 

Just like Google Play or the Apple App Store lets users customize their phones, the app store will let drivers and fleets integrate apps into their routine, Lore said. Those apps can help with things like finding parking, finding the most efficient route or managing video that comes from the inward- and outward-facing cameras on the truck. 

It’s also helping companies harness the latest trend in trucking, Lore said: driver wellness.

From finding ways to encourage healthy eating and exercise to finding ways to connect with family while on the road, “driver well-being has emerged as the new frontier,” he said.

[ad_2]

Source link