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00:00This is a story about featuring the things we thought we needed to fix.
00:04The pandemic focused all of us on the need to fix our supply chains.
00:08But what if we could use technology not just to fix our supply chains, but to rethink them altogether?
00:14Could we use them to transform our markets, our workforce, and our economy itself?
00:20Stopping the spread of the deadly coronavirus has meant stopping the spread of more than just germs.
00:26Good spots and people have been halted in place.
00:30I think the pandemic sort of brought logistics to the limelight from this, like, tucked in the corner industry to really be in the forefront of all of us, of consumers and society.
00:41And when supply chains stop, economy stop.
00:45Going back to the COVID days in 2020, we started buying online like we had never seen before.
00:51And so what happened then with all of that cargo rushing in, it was like taking 10 lanes of L.A. freeway traffic and squeezing them into five.
01:00But what if we could use technology not just to fix supply chains, but to rethink them altogether?
01:07Could we use them to transform our markets, our workforce, and our economy itself?
01:12Logistics is the largest cost for the manufacturing and retail economy.
01:19And if you drive that cost down, like anything else we have seen in the history of economy, you unleash the next epoch of economical activity.
01:30Lior Ron recently became COO of autonomous trucking company Wabi after co-founding Uber Freight back in 2017.
01:39The cost of goods moved is sometimes 30, 40% of the cost of operation.
01:45It's a prohibitor for them to scale and to be bigger.
01:49If you take the cost down, you essentially democratize access to logistics.
01:55You encourage more economical activity if you reduce the friction, and then there's friction in the system.
02:01If you reduce the friction in the system on manufacturing, on distribution, on moving those goods around, you just unlock a bunch of new economical opportunity.
02:11You unlock manufacturing strength, you unlock new productability back to COVID, you unlock resiliency, and that set the stage for a rapid economical activity.
02:24The stakes are enormous, but how to get from here to there?
02:29Ron says the answer lies, in part, in that artificial intelligence everyone's talking about.
02:35I think AI allows you, the way I think about it, really like three levels of optimization and supporting function.
02:46One is logistics is a highly fragmented, highly manual ecosystem.
02:52You have hundreds of thousands of operators acting as glue, overcoming all those information challenges, doing a lot of repeated manual tasks, which is really sort of like taxing the system from a cost perspective and from an efficiency perspective, and more importantly, just from a time perspective.
03:14The second level is optimization, can we now actually start looking at the supply chain holistically and start driving smarter decisions?
03:24Can we optimize those empty miles?
03:26Why does it need to be 40% empty miles if we know everything and we could connect everything together and we can actually start smartly designing the network so you can actually minimize those empty miles?
03:40And the last level is using AI to truly drive better decision-making.
03:46Let's have a chat GPT for my supply chain.
03:49And the most important one is unleashing AI to the physical world with physical AI and self-driving, which I think is really sort of the deepest disruption and the most profound change that we'll see with AI in supply chain in the next decade.
04:06Part of what Ron envisions for the future is happening right now in the Port of Los Angeles.
04:12There's so much here and I think we're just scratching the surface.
04:15Gene Soroka is the executive director of the Port of Los Angeles, the busiest container port in the United States.
04:23One of the areas that we stepped into right away was digitalization of all the port's information.
04:29How many ships are coming in, containers, what trucks and trains need to be planned?
04:34How do we get our great skilled labor at the right place anticipating the cargo that was coming in?
04:40So we worked with the Wabtec company to develop the first information sharing system for a port here in the United States.
04:47We call it the Port Optimizer.
04:49We can now see cargo 40 days before the ship arrives into Los Angeles, giving us ample time to plan all those things, the skilled labor, the land, the machinery, and just that intuitiveness about how we're going to handle things if something doesn't go to schedule.
05:06And normally that's the case.
05:07There's always an adjustment that has to be made in the supply chain.
05:11So now we can see things every morning, a dashboard of information about the velocity, the vital statistics of the port, and I can tell you after about 90 seconds of a review how we're doing and what we need to do next.
05:24That digitalization started to introduce prescriptive and predictive analytics.
05:30Then we start to get into really, really interesting engineering work.
05:35We're going to have a project here on the Vincent Thomas Bridge to resurface it.
05:39So we're using geospatial mapping and great companies like Esri and the Jet Propulsion Lab to help us now simulate traffic patterns ahead of time and in real time allow drivers to move around with much more knowledge than they had before.
05:56It's going to help this trucking community out in a tremendous way.
06:00What Soroka is pursuing within the Port of Los Angeles, Roger Penske is doing on roads coast to coast and even around the world.
06:07We do 500,000 vehicles.
06:10We're in four continents and nine countries and we have our truck leasing, rental and logistics and we have 44,000 people.
06:17So it's a real enterprise from artificial intelligence.
06:21What we're using in the truck leasing business, we're taking, downloading 200,000 vehicles a night with operating data.
06:29When I look at the amount that we capture on an annual basis, it's a billion units of data.
06:34We run 5,600,000 miles with our trucks.
06:38And when you take that, we need somewhere to aggregate it.
06:41So we're starting to use what we call Catalyst AI.
06:44It's an AI product where we look at the data, we diagnose the data, we go to our customers and we use this as a connection.
06:53The Penske company's use of AI is not limited to monitoring its massive fleet.
06:58It also uses it in the maintenance required to keep that fleet on the road.
07:03We then become to build a process where we have predictive maintenance.
07:08So AI is telling us this truck should come into our shop.
07:11You might have the same truck but a different duty cycle.
07:14So when that truck comes in our shop, what happens is the mechanic goes to the computer,
07:20he scans the barcode or the VIN number on the truck,
07:23he puts on a headset with a mic and what we call guided repair.
07:29And that guided repair takes him through the whole maintenance process on the trucks.
07:34And then that data, because it's live, goes into our SOS center, which is our call center for breakdown.
07:40This whole avenue, downloading the data, taking it, making it real.
07:46Then we take it and for the customer, we'll go back to you as a fleet and we'll take and give you your data live
07:55and how we compare location to location you have.
07:59And we can look at that and then determine what are the things that we have to do to take action.
08:03We have 15,000 customers and many of them don't have the opportunity to have this kind of data.
08:09So it's sticky, it's important, and it's taking all the technology that we can get.
08:14Whenever we begin to talk about automation and AI, people raise questions about jobs.
08:20What's the effect on jobs?
08:21Are you going to eliminate a lot of jobs in supply chains?
08:25It's a hard job.
08:27And many folks, many young folks do not want to take on this job.
08:30Being 300 days on the road, not being able to raise a family, not being able to have predictable access to sleep and food.
08:39I think for the foreseeable future, as you start rolling self-driving gradually, you augment those jobs.
08:46You fulfill the empty spots in the demand for those jobs.
08:51You don't replace those jobs.
08:53There's going to be plenty of time for the existing population to retire over the next few decades.
09:00As the truck replacement cycle, again, it's like 4 million trucks in the United States.
09:05It's going to take a while until self-driving will actually sort of make an economical dent to the driving population.
09:11So I see that as a gradual job transition on self-driving.
09:14I think if you look at knowledge workers, I think we'll see a faster transition because the digital AI is even more prevalent and will scale potentially even faster.
09:26I think there it's about an opportunity to up-level.
09:31So at Uber Freight, we've automated a bunch of those manual repetitive tasks, but then those folks have been up-leveled and they're now more sort of an orchestrators of an orchestra.
09:40They are the brain behind actually orchestrating all those agents because those AI agents can now do this job and that job and that job.
09:50And I'm sort of more the integrator.
09:51There is no replacement for the human connectivity.
09:54So I can spend my time focusing on customer needs.
09:58I think in the idea that people think that jobs will disappear, that it'll be just talking to AI.
10:04I think it's overhyped.
10:06Chris Kaplis is the executive director of MIT's Center for Logistics and Transportation.
10:12I think there's a lot of overhype in that it can truly take over a human's full job when in fact jobs are tasks and it'll take over some tasks.
10:21And so then there are certain tasks that each one of us in our jobs do that cannot be done by AI to include the person filming us right now.
10:29It's more the mundane things that get automated and then the things that can help enhance what a human does.
10:36I think there's a continuum on how you automate things.
10:39We've been automating stuff forever, right?
10:42But there's a line of this is mundane and over here I still need a human.
10:46That line keeps moving as AI gets smarter.
10:49I don't think it'll go all the way.
10:50Artificial intelligence may well transform our supply chains, but to get there, it's not enough to have AI alone.
10:58It has to be linked to autonomy.
11:00What is AI without autonomous vehicles?
11:02What are autonomous vehicles without AI?
11:04I fundamentally see the next decade really about building the autonomous infrastructure of an industry and I view self-driving as the most profound help in driving efficiency and safety into supply chain.
11:19The whole digital infrastructure in the end of the day can drive 10, 15% optimization of the network.
11:26When you start actually moving assets in a self-driving way, when you can move an asset from six hours a day of being utilized with a human driver to 20 hours, 24 hours,
11:39when you can drive safety into our roads with thousands of unnecessary deaths and half a million related incidents in the U.S. every year on trucks,
11:50you can make a profound change and a profound help to the industry.
11:56This is the time.
11:58I think it's a confluence of many things really coming together to make the next year, not even five years, the next year transformative from self-driving in the industry.
12:09Like this is game time.
12:10This is real now.
12:11It's happening.
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