What would Chicago-area businesses and governments do with an extra 7 and a half billion dollars a year?
As business owners know, there are hidden costs everywhere, and not always in the most obvious places. One of the most significant hidden costs is caused by something people already hate regardless of its financial impact: traffic congestion. And according to a report authored by Toni Preckwinkle, President of the Cook County Board of Commissioners, congestion costs could be as high as 7 and a half billion dollars per year.
That’s such a huge number, it’s almost hard to believe. But when you think about it a bit, it starts to make sense. Sitting in traffic burns gas and causes wear and tear on vehicles, which is obviously worth money, and also wastes time, which is also valuable, if slightly harder to quantify. When you have entire counties gridlocked in traffic all at once, that’s a lot of money going down the tubes at once. And businesses are forced to pass part of this cost on to the customer in order to remain profitable, so even if you aren’t a business owner or an elected municipal official, this problem affects you.
Cook County is the most-affected county in the nation by the total cost of congestion. The statistic bears repeating: 7.5 billion dollars a year lost in a county of 5.2 million people. That’s around fifteen hundred dollars per person every year! Of course, the cost isn’t distributed evenly — much of the brunt falls upon business owners that need to move goods through the country, and executives, whose time is worth quite a bit dollar-wise, who have to make it to meetings and get stuck in traffic when they could be fulfilling time-sensitive duties. Milwaukee County is also in the top 10 counties in the US when it comes to the dubious distinction of “most money lost to congestion”. When you consider the fact that fuel and wear-and-tear costs are exponentially worse as congestion gets worse, being in this particular top-ten is a really unattractive place to be.
And it’s not expected to get better on its own. In fact, it’s expected to get a lot worse on its own. Consider the following factors: A 3.8 percent increase in police-reported crashes this past year — the largest percentage increase in nearly 50 years. Annual GDP growth of 2.5 percent. Massive growth in e-commerce sales. An anticipated 2 billion people added to metro areas around the world by 2050. And ever-more dramatic weather impacts.
The answer to this lies, at least in part, in autonomous vehicles. We can’t know the exact numbers of how much will be saved when all vehicles are autonomous, we can only say that most — if not all — of congestion costs will disappear. But that’s a long way off from now. We can, however, take heart in a recent study covered by the MIT Technology Review. The study showed that just one autonomous vehicle controlling its speed intelligently in a traffic jam “reduces the standard deviation in speed of all cars in the jam by around 50 percent, and the number of sharp hits to the brakes is cut from around nine per vehicle per kilometer to around 2.5 — and sometimes practically zero.” What difference does that make? “Because fuel use increases when cars slow down and have to get back up to speed, the presence of the AV reduces fuel consumption … In fact, the savings is as much as 40 percent when averaged across all the cars in the traffic flow.”
By the way, 40 percent of $7.5 billion is $3 billion. And that’s just the expectation of the change caused by one AV in a traffic jam. What would be the difference with dozens of them driving along a smart corridor? That’s a figure that could be game-changing when the dollar amount is known. And why not start with the county that loses more than any other to congestion issues?
Let’s look at the trucking industry for a good perspective on this. The industry currently loses 996 million hours in delay per year. That delay is the equivalent of 362,243 commercial drivers sitting idle for an entire working year. Trucking costs per hour average around $64, so when you put the numbers together, the losses the industry takes as a result of congestion amount to roughly $63.4 billion. That’s close to $6,000 a year per truck.
When truck routes go through Illinois, the industry loses $2.67 billion a year — fourth-worst in the nation. The Chicago metro area accounts for $2.1 billion of those losses. Wisconsin takes a big hit, too — $1.74 billion a year.
The trucking industry, luckily, has a head start when it comes to automated and connected vehicle technology. The truck platooning model, which was deemed “near-market ready” by ATRI early last year, was found by that group to reduce fuel use by about 10%. That alone already represents savings that more than make up for the loss per truck per year in congested traffic. But that’s just for first-gen platooning, where the following-truck gap remains fairly conservative, in light of the new technology and lack of 5G communications. Studies have shown that closing that gap increases efficiency, though they’re not entirely certain what the exact figure will be when platooning can be optimally employed. Even as dictated by current numbers, though, the $6,000 per truck per year lost by these companies turns into a significant surplus of up to $15,000.
Even going by the conservative estimate, though, we’re talking millions of gallons of fuel saved per year. That’s not only a statistic that would come as wonderful news to trucking companies, to whom fuel represents a staggering 41% of operational costs, it’s also a savings that gets passed on to the companies’ clients — American businesses and manufacturers. And, no less importantly, it makes a major positive impact on the environment — trucking represents a full 10% of total US oil use.
So we know that platooning, in its most basic form, saves more than enough money to make up for the trucking industry’s congestion-related losses. And we also know that a single AV in a traffic jam cuts those costs almost in half for all vehicles involved.
What we don’t know exactly is how much more money, on top of those amounts, would be saved on a corridor with dedicated lanes for platooning, for autonomous vehicles, and equipped with low-latency V2I communications capabilities to help connected vehicles maximize current systems like automatic emergency braking and adaptive cruise control. But the upside is so high, especially in a region hit hardest by congestion’s costs, that the time has come to find out.
Sources used in this article include ATRI’s “An Analysis of the Operational Costs of Trucking, September 2016”
The American Transportation Research Institute’s White Paper: “Heavy Truck Cooperative Adaptive Cruise Control: Evaluation, Testing, and Stakeholder Engagement for Near Term Deployment, Phase Two Final Report”
Rob Fischer is President of GTiMA and a senior advisor to Mandli Communications’ strategy team. GTiMA and Mandli Communications are both proud partners of the Wisconsin Autonomous Vehicle Proving Ground.
Heath Davis-Gardner is a professional writer and editor who currently serves as Strategic Communications Specialist at Mandli Communications.