A driverless truck leaves a Loblaw office in Brampton, Ont., on Oct. 4.Christopher Katsarov/The Globe and Mail
Sylvain Charlebois is a professor of food distribution and policy and the director of the Agri-Food Analytics Lab at Dalhousie University, and co-host of The Food Professor Podcast.
Loblaw’s L-T debut of its driverless delivery trucks this week points to two major phenomena affecting the food industry: how the battle for the proverbial “middle mile” in delivery is heating up, and the sector’s persistent labour crunch.
Both issues underscore a stark reality: that while such driverless trucks are a first in Canada, according to Loblaw, they certainly will not be the last.
Since January, 2020, Loblaw Cos. Ltd. and its project partner Gatik have made an astonishing 150,000 autonomous deliveries between Loblaw facilities, in trials with a “safety driver” on board who can take over to prevent accidents. Not one occurred, and the project received an extensive third-party safety assessment.
Loblaw runs one of the largest logistical food networks in the country. The fleet has about 400 commercial trucks, and with third-party companies, it delivers more than 500,000 loads each year. The company’s announcement on Wednesday that five trucks would be driverless caught the attention of pundits in the industry.
A focus for many players in the food industry, especially in terms of investment, has been the “last mile,” which refers to the movement of products in the final leg of transportation - that is, to our homes. On Thursday, Loblaw announced a deal with DoorDash Inc. to expand home delivery for its stores, with Loblaw’s chief executive saying that area of its business is set to grow.
While there is a growing focus on the last mile, the one leg that can actually give an outsized competitive advantage to a company, especially in a vast country like Canada, is the overlooked “middle mile,” in which goods are hauled from warehouses to retail outlets. Even though that middle leg is not as costly as the last mile, the ability for anyone to make that connection more efficient will be key in this competitive space.
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Meanwhile, the labour trend since the beginning of the pandemic has been often called the Great Resignation, or the Great Attrition. Many are simply leaving the work force. Food processing in Canada has more than 38,000 unfilled positions. The food-service industry is operating with 250,000 fewer people compared with 2020. The overall food industry is hemorrhaging employees, which are proving incredibly hard to replace.
In trucking, it’s the same picture. The most recent labour-market data from industry group Trucking HR Canada suggests record-high driver vacancies across Canada, with at least 25,000 vacant truck driver positions. And farming would be in deep trouble without the 65,000 foreign workers we hire yearly. It has become incredibly hard to find anyone these days to do labour-intensive, monotonous work, at both ends of the food supply continuum.
And the labour shortage is not just in blue-collar positions. Employees to fill white-collar positions, particularly in technology, are also in demand. Analysts suggest all these shortages could last for more than a decade.
Some claim we should just pay food industry employees more. Perhaps, but in a high-volume, low-margin environment, paying more in these positions will only lead to much higher food prices. When food inflation is already at 9.8 per cent, such an option is not so simple.
Driverless trucks are the perfect solution. They will bring more predictability and consistency to supply chains. For refrigerated and perishable products, this is huge, since it will likely reduce waste and increase quality and freshness.
Such a move will bring some criticism from unions, which is to be expected. But going driverless doesn’t mean food-supply chains will operate without any humans – just ones with different skill sets. Jobs in analytics, modelling, maintenance and forecasting will become key in the future. Colleges and universities will need to pay attention to what is going on, so the appropriate programs are set up to better support the industry in need of highly qualified personnel. Humans will always remain involved.
We will see more companies embracing high-tech solutions to diminish any labour vulnerabilities. It is clear the pandemic has pushed many companies to think differently about their labour force, and how they protect and manage it. This was happening before 2020, but at a much slower pace. Now, companies are just beginning to get smarter about logistics and how it can make our food supply chains more resilient.
It shouldn’t be a surprise to anyone that the current buzzwords in the food industry are robotics and automation.