California Embraces The Autonomy Economy
By Grayson Brulte | September 24, 2023
On Friday, September 22, 2023 history was made in California. Governor Newsom stood up to special interests and paved the way for The Autonomy Economy in California.
If AB 316 was signed into law, jobs would have been lost, companies would have relocated and an entire industry would have shuttered overnight. It would have the makings of economic armageddon, as investors would think twice about investing in California.
Why invest and create jobs when special interests can for all practical purposes bankrupt an entire industry one legislative bill? This is what would have happened if Governor Gavin Newsom did not veto AB 316.
By vetoing AB 316, Governor Newsom put the citizens of California and the California economy first. His veto demonstrated that he cares about the State, it’s citizens, businesses and overall economic viability.
Autonomous trucks will contribute to the California economy. It is estimated that autonomous trucks will have an annual $6.5 billion to $7.9 billion economic impact on California’s GDP according to a 2021 report commissioned by the Silicon Valley Leadership Group.
The forecasted economic impact will only grow as autonomous trucking operations in California scale and are eventually integrated into port and drayage operations.
Port of Los Angeles is the busiest container port through the first-half of this year, with 4,137,379 loads and empties, followed by The Port Authority of New York & New Jersey with 3,740,272 according to Pacific Merchant Shipping Association. While the Port of Los Angeles remains the largest container port in terms of volume, East Coast and Texas ports are seeing significant gains in cargo volume.
From 2019 to 2023 Port Houston saw a 39.4% increase in Inbound Loaded TEUs, PortMiami saw a 23.8% increase and Port Everglades saw a 8.2% increase. Shipping patterns are changing and shifting east as companies are diversifying their supply chains and applying lessons learned from the global pandemic.
Port Houston, PortMiami and Port Everglades are all located in States where autonomous trucks are currently operating and hauling freight on public roads.
Autonomous trucks are able to operate commercial operations on public roads in Texas and Florida because of sound policy that puts the safety of residents, health of the economy and job growth ahead of special interests.
In Florida, Kodiak Robotcis is hauling freight.
As autonomous trucking companies grow, they will expand into port operations beginning in Texas and Florida, hopefully followed by California.
When autonomous truck operations begin at ports, jobs will be created. Ports are economic engines. In Florida, PortMiami contributes $43 billion annually to the local Miami-Dade economy, supporting more than 334,500 jobs in South Florida.
Soon autonomous trucks will contribute to and accelerate this economic engine. When they do, the economies where they operate will benefit as new jobs will be created and the cost of goods will be lower because of the economics that autonomy is able to unlock.
With consumer inflation currently at 3.7%, down from the peak of 9% in June 2022, The Federal Reserve Board will continue to remain hawkish as they work to achieve their 2% inflation goal without causing a recession.
The outlook is for The Fed to hold the federal funds rate at 5-1/4 to 5-1/2 percent for the foreseeable future. The Fed is doing its job of tamping down inflation, but things are starting to break as consumers are suffering under the high interest rate environment.
U.S. credit card delinquencies have hit 3.8% and 3.6% of consumers have defaulted on their car loans, according to Equifax. Both of these figures are the highest in more than a decade.
Consumers need help in terms of cost savings, as they are being squeezed by higher costs caused by inflation. Autonomous trucks can deliver cost savings through lower shipping costs benefiting the U.S. consumer and the U.S. economy.
As shippers begin to integrate autonomous trucks into their operations, it’s important to highlight two facts:
- Professional drivers will always play an important role in autonomous trucking. An individual who wants to start a career as a professional driver today will retire as a professional driver.
- Autonomous trucks will create jobs.
- Autonomy is good for the economy.
The Newsom Administration clearly understands these facts as they were not intimidated by special interests. Governor Newsom represented the people of California and not special interests when he vetoed AB 316.
By vetoing AB 316, Governor Newsom signaled to the markets that California is open to innovation, new ideas and most importantly open for business — California Welcomes the Autonomy Economy.
With this veto, investors will now look at opportunities to invest in California and autonomous trucking companies will look to expand operations. Investing in California will create jobs and a robust economy. Autonomous trucks will have a long-term positive economic impact on California’s economy.
The Golden State is now well on its way to joining the Autonomy Economy.
Thank you, Governor Newsom for doing what was right. The California economy is now poised to prosper long-term because of your bold decision.