A micro-economic model of the market uptake of truck platooning

Truck platooning is a technology allowing trucks to travel in convoy formation using wireless communications and advanced driver assistance systems. This technology is expected to increase road safety and capacity, and to decrease fuel consumption and GHG emissions; it comes with apparently important financial benefits and positive externalities. However, forecasting the market uptake of platooning is a complex economic issue, requiring a dedicated methodology. From a micro-economic standpoint, several features of truck platooning are important. First, forming a platoon implies a coordination cost. Second, platooning requires trucks with specific and costly equipment. That makes platooning a two-layer problem. Third, the decision of one carrier depends on those of other carriers: truck platooning, as a market, is characterized with network externalities. Fourth, road freight transportation is a heterogeneous system: different vehicles follow different operation patterns. This paper submits a micro-economic model of the uptake of platooning which accounts for all of the above points. First, a conditional sub-model of platoon formation is designed, where two trucks decide whether to form a platoon or not based on the net monetary benefits of doing so. Then, platoon formation is modeled in a simplified, single road context, as a Markov chain. At that stage, the share of platoonable trucks entering the market is obtained with a numerical, dynamic model. Upgrading conventional trucks to become compatible with platooning is assumed impossible. The paper concludes that due to the positive feedback loop of network externalities, market uptake is very sensitive to the economic assumptions. In addition, due to the equipment and coordination costs induced by platooning, the overall financial benefits for carriers are much lower than what they would initially appear to be; third, energy savings can be significant on the long run if the technology spreads widely.