Prospects and Risks in the Autonomous Freight Market: Interview with Andrey Bolshakov, Co-Founder of Megawatt

Transportation costs are rising, and the market increasingly faces a shortage of skilled drivers. As a result, delivery times are increasing, and business growth is slowing down. Autonomous vehicles, which operate 24/7 and require fewer personnel, can address these challenges. Andrey Bolshakov, founder of the autonomous freight platform companies Evocargo and Megawatt, discusses the current state of the autonomous freight market and the challenges that the industry may face in the future.

StartUs Insights analyzed over 2,000 companies developing warehouse automation solutions and included Megawatt in the top 10. Can you tell us about the advanced solutions that earned you this recognition?

I’ll start by providing some context. The autonomous transport sector is developing very rapidly and has come quite a long way in terms of solutions: driverless taxis and buses have already been developed. However, it’s one thing to create the technology, but another to implement it and make it profitable. This is where many have failed.

From this perspective, transporting freight is simpler. The logistics mainly consists of a chain of routine processes, which artificial intelligence handles very well. This area also has more distributed load — while people tend to travel more during rush hours, freight transport operates 24/7. Also, most of the people you will meet during your route will be trained employees, not random passengers. So, after spending several years in autonomous buses tech,I decided to apply my skills specifically to autonomous freight transportation.

There are also challenges here, as not all roads allow autonomous vehicles. At Megawatt, we understand this, so we are focusing on areas where automation is already applicable — such as large, closed logistics hubs: parks, ports, etc. In other words, our equipment works within a closed environment. Our advantage is its eco-friendliness. Logistics parks are located near cities, so it is crucial to minimize CO2 emissions there. Our equipment runs on electricity, reducing environmental pollution.

The typical lifespan of a yard truck is more than 20 years so we’ve become quite skilled at retrofitting diesel engines into electric drives. If a client doesn’t want to replace their fleet with our platforms, we offer them a transformation option. At the same time, we can install sensors on the vehicles to monitor driver performance. Based on these data, we can give recommendations for optimizing roads or routes. The client can see for themselves that, for certain simple routes, it would be more efficient to deploy robotic vehicles, reducing driver costs.

To scale the business, technology investments must align with the business model — so we had to think about how to sell them. We decided not to insist on replacing the entire fleet for our clients. Instead, we guide them through several stages of introducing autonomous platforms. This way, the client can evaluate the benefits of automation themselves and decide whether they need it. And we, for our part, allow the client to increase efficiency without the need for a complete business overhaul.

What are the main benefits of autonomous logistics for businesses, and how do they impact cost reduction and efficiency improvements?

First, automation reduces non-productive downtime. This is when your driver goes off to talk to someone, takes a break, etc. According to consulting agencies, this takes up about 10-15% of working hours. A vehicle, however, doesn’t take breaks and works 24/7 if necessary.

Second, operational costs are reduced. For 10 vehicles, you need 10 drivers, plus a dispatcher to assign tasks, a medical worker for certification, and other support staff, all for just one 8-hour shift. Often, businesses run 24/7, meaning you need three times more staff. A large staff requires a large back office. But if you replace conventional vehicles with autonomous ones, you only need one operator to manage them. This means operational costs can be reduced by 50% or more.

I know that as CEO of your previous company Evocargo, you worked extensively in the UAE and signed several government-level agreements. How far has the country advanced in implementing autonomous logistics compared to Europe and the USA? Which cities and countries are currently leading in this area?

The situation in Europe is complex because business processes there are often slow and not always straightforward. The U.S. has a developed venture market that can support startups. In the Gulf countries, there is a venture market along with state support willing to invest in technologies. For example, Saudi Arabia has adopted the large-scale development concept of Saudi Vision 2030, and Dubai has the Dubai 2040 Urban Master Plan, which pays special attention to modern technologies. Also, modern universities like TII and Khalifa University with pretty sophisticated high-tech learning programs are established.

In my view, the leaders in autonomous logistics in the Gulf are Dubai and Abu Dhabi. Saudi Arabia, particularly Riyadh, is also making serious efforts. Logistics companies, like Evocargo, Megawatt, and Einide — a company at the forefront of autonomous freight — are entering the region. I believe that the technology in the Arab region will develop rapidly.

I also think that besides the Gulf region, tech startups are likely to thrive in the U.S. and the MENA (Middle East and North Africa) countries.

What infrastructure and regulatory barriers must be overcome for the mass deployment of autonomous vehicles?

For autonomous vehicles to be deployed on public roads, many issues must be resolved — for example, determining liability in accidents, who compensates who for damages, etc. Without these solutions, autonomous logistics will not progress. For example, a driverless vehicle cannot even travel from one building on a factory site to another if part of the route goes via a public road.

Developing unified laws for autonomous transport is difficult because different conditions may exist even within one country. For example, braking distance requirements in Alaska in winter will differ from those in Florida, where it never freezes. Some countries are opening roads for autonomous transport, but the process is still very slow.

There are two solutions to this problem. The first group advocates creating large-scale infrastructure to manage the vehicles — with cameras and sensors. The second group argues that the focus should be on the “intelligence” of the vehicles themselves. Each country decides for itself which approach to take.

If we look at the other side of the process — entrepreneurs and logistics companies — what should they do now to prepare for the widespread application of such technologies?

They can start restructuring business processes right now. If they are not ready to move to autonomous vehicles, they can sign contracts with transport companies already using this technology and work with their equipment. The processes will remain the same — only robots will replace the regular drivers.

A recent McKinsey report on autonomous freight suggests that for wide adoption, these technologies will need to prove significantly higher safety compared to human-driven trucks. What are Megawatt’s safety results, and how much work remains to be done in this area?

There have been no incidents with our autonomous systems. The vehicles are designed to avoid even the slightest risk of an accident. And according to many companies, if we trust their statistics, autonomous vehicles perform better than the average driver.

We notice that accidents involving autonomous vehicles receive a lot of media attention. However, regular car accidents are much more frequent, but the media doesn’t report on them because they are simply not as interesting to readers as an accident involving a billion-dollar company’s car.

It is still unclear who will bear the responsibility for accidents involving autonomous vehicles. In a regular accident, drivers can negotiate and come to an agreement, but in the case of autonomous vehicles, it’s unclear whether the responsibility would fall on the owner company or the software developer.

At Megawatt, we have even lower risks, as we operate in closed areas, where the speed is lower, and the environment is more predictable than on highways.

What other potential risks related to autonomous freight do you foresee in the near future, and how can they be minimized?

The main risk is the loss of millions of jobs. First of all, drivers will be affected. This is a very popular profession worldwide, and if autonomous technology continues to develop, many people will be left without jobs. There will also be less demand for driver-related infrastructure — roadside hotels, rest areas, cafes. Consequently, employees in those areas will also lose their jobs.

What to do about this is still unclear. Drivers can be retrained as operators of autonomous vehicles, but there will be far fewer such positions. So, most likely, society and business processes will have to adapt to the new technology. Still, that transformation will take a decades, so I’m sure we figure out how to handle that.

We’ve already gone through the industrial revolution — many professions disappeared, but society adapted to the new reality. Now, we’re on the verge of the next revolution related to artificial intelligence, and I’m sure we’ll come up with new professions that will allow people to find fulfillment.

What are your forecasts for the adoption of autonomous freight over the next 5–10 years, based on current trends and technological developments?

I think that in 5–10 years, autonomous vehicles will be firmly implemented in closed environments. There will also be the possibility of traveling between hubs on public roads. After that, autonomous vehicles will start entering cities.

In my opinion, the bottleneck here won’t be the development of technology itself but the need to regulate this field. Therefore, it will take 5–10 years to create rules for using autonomous vehicles and establish accountability algorithms for incidents.

As for Megawatt, I see potential in creating machines for the agricultural sector — for example, autonomous combine harvesters and tractors. Our control technology is universal, so it can be easily adapted to any hardware — and that’s our advantage.The post Prospects and Risks in the Autonomous Freight Market: Interview with Andrey Bolshakov, Co-Founder of Megawatt first appeared on Warehouse & Logistics News.