Some observers contend that with the advent of autonomous vehicles, the job of truck driving will soon be automated. Warren Buffett seems to disagree. His Berkshire Hathaway Inc. on Tuesday made a deal to acquire nearly 40% of the operator of Pilot and Flying J travel centers (known as Pilot Flying J), according to Nicole Friedman in The Wall Street Journal.
She quotes Buffett as saying, “There will be more goods moving to more people as the years go by in the United States—that I would bet a lot of money on.” He didn’t disclose how much he’s betting, but it does seem he expects an increasing number of truckers to stop at Pilot Flying J’s 750 locations in the United States and Canada.
Friedman writes, “The deal runs counter to the long-term growth in electric vehicles and self-driving cars and trucks expected by some analysts.”
You might say that even an autonomous truck must stop for fuel. But fuel doesn’t seem to be where the money is. Friedman explains that trucks are becoming more fuel-efficient, reducing demand for diesel. That coupled with low crude-oil prices have cut Pilot’s revenue from about $30 billion in 2012 to $20 billion today
Nevertheless, Pilot’s profit has grown in recent years. Friedman quotes Bryan Maher, analyst at FBR Capital Markets & Co., as saying, “They make their money on nonfuel stuff” like food, which an autonomous vehicle wouldn’t need.
So it seems Buffett and Pilot Flying J are expecting human truckers to continue stopping at their centers. Friedman quotes Pilot Flying J’s chief executive, Jimmy Haslam, as saying, “We personally believe—and we spend a lot of time talking to both truck and car manufacturers—that it will be a long time before there’s not a person in the truck. I think diesel fuel will power trucks for a long time to come, and there will be a person in that truck for a long time to come.”
Further, she writes, “Federal limits on the time drivers can operate behind the wheel and a new requirement to electronically log hours could help the business by prompting drivers to stop more frequently, increasing the need for parking spots, food, and other amenities.”
