UPS and Teamsters face off over the future of autonomous logistics (UPS)

As part of negotiations over a new collective bargaining agreement, the Teamsters trucking union is demanding that UPS agree not to use drones or self-driving vehicles to automate deliveries, The Wall Street Journalreports.

The two organizations are seeking to hammer out one of the largest collective bargaining agreements in the US, covering more than 260,000 UPS employees.

The negotiations could have critical implications for the spread of automation in the transportation and logistics industry, and beyond.Although the Teamsters’ demands are just the starting point for negotiations, this is the first time that a US company of UPS’ size has faced such demands from a union as influential as the Teamsters, which boasts nearly 1.5 million members.

UPS, along with competitors in the logistics space like FedEx and DHL, are struggling with growing deliveryvolumesdriven by the rise of digital commerce, and a worseningshortageof truck drivers is making it more difficult for them to cope with that growing demand. This is pushing these companies to explore automated delivery options like drones, delivery robots, and autonomous trucks to alleviate this pressing issue.

Last year, UPS conducted drone delivery trials in Florida in partnership with delivery vehicle manufacturer Workhorse Group. The drones launched from the roof of delivery trucks after the trucks’ drivers loaded packages on to them and confirmed the aircrafts’ flight paths. UPS stated that, if drones cut just one mile per day from each of its drivers’ delivery routes, it would result in $50 million per year in fuel savings.

And, once regulations open up and autonomous navigation technology improves, drones will be able to deliver packages on their own from warehouses, as Amazon is testing in the UK, eliminating the need for a driver and leading to even further cost savings.

However, this push toward further automation means transportation and logistics will likely be one of the first industry sectors forced to deal with public anxiety over workforce automation. Sixty-five percent of 2,000 US consumers surveyed by Pew Research Center in 2016 believed that, in 50 years, most of the work done by humans today would “definitely” or “probably” be automated by robots and computers.

Meanwhile, a separate Pew survey of 4,135 US adults last year found that 72% of the respondents were worried about a future where many jobs are automated by technology, and 58% supported government restrictions on the number of jobs businesses can replace with machines. The advent of autonomous vehicles and drones threatens to displace millions of jobs involved in transporting people and goods, including the 3.5 million trucker jobs in the US.

While new advancements will solve the many technology barriers to autonomous vehicles and drones over time, public and regulatory concerns over their impact on the workforce will likely only intensify as these technologies come to market. That could lead to massive labor strikes or punitive regulations that could disrupt businesses, making it crucial for companies to work with labor unions and government agencies to mitigate those risks. UPS’ negotiations with the Teamsters will provide an early case study in handling this emerging industry challenge.

Peter Newman, research analyst for BI Intelligence, Business Insider's premium research service, has written a detailed report on autonomous trucking that: