The Imminent 3G Sunset Could Leave Over 350,000 U.S. Trucks in the Dark (and Further Snarl the Supply Chain)
Wednesday, February 23, 2022
The 3G sunset stands to negatively impact the freight industry, which moves roughly 72.5% of the nation's freight by weight
NEW YORK, Feb. 15, 2022 /PRNewswire/ -- On February 22, 2022, AT&T plans to sunset its 3G network, meaning that modules and devices that request 3G voice and data-only services from the AT&T network will no longer work. According to global technology intelligence firm ABI Research, this could have a crippling effect on more than 350,000 Class 8 vehicles and many connected cold-chain trailers--vehicles that are essential to the already strained supply chain.
Of the estimated 3.97 million Class 8 trucks in the United States, approximately 3.8 million are employed by smaller fleets. These smaller fleets are more likely to have delayed the transition from 3G to 4G devices, many of which require Federal Motor Carrier Safety Administration (FMCSA) compliance via Electronic Logging Devices (ELDs).
"It is entirely likely that many fleets that have not yet transitioned will be unable to purchase, remove, and replace devices prior to February 22. This will result in serious compliance, safety, vehicle health, and operational capability challenges to an industry that moves roughly 72.5% of the nation's freight by weight, and during a time of rolling, crucial shortages of consumer and business products," warns Susan Beardslee, Supply Chain and Logistics Principal Analyst at ABI Research.
The transition also has significant ramifications for cross-border trade with Canada and Mexico, as both countries have delayed their 3G sunsets to mid-decade. Should these North American partners enter the U.S. after February 22, the fleets using current AT&T 3G devices will no longer be able to transmit or receive data between drivers and dispatch. This will also include linked devices, such as video telematics. "Essentially, when the devices no longer function, drivers cannot digitally track their Hours of Service (HOS). Considering that driver fatigue tops the list of road dangers, this sunset severely impacts ELD compliance and road safety," Beardslee explains.
The 3G to 4G transition has come at a time of tremendous constraints and exponentially higher prices for the global semiconductor supply. "Some telematics providers have leveraged their engineering resources to redesign products multiple times to align with available product. Others have allocation challenges and six-month lead times from their suppliers," Beardslee explains. Legacy commercial telematics suppliers have the largest fleets to transition (many top 10 globally).
The 3G sunset is a multi-organization, public, and private issue. Beyond a reprieve from the carrier, other options include a temporary ELD exemption from the FMCSA as they did for pandemic-related needs. Longer-term, as connectivity and ADAS advance, more telematics will come factory/line-fit/OEM-grade with the unit pre-installed. Future scenarios to consider are modular hardware designs and hardware upgradeability, eSIM software, and greater inventory planning in advance.
"Let's hope that when an inevitable 4G shutdown occurs in the future, telematics companies and fleets will be better prepared," Beardslee concludes.
About ABI Research
ABI Research is a global technology intelligence firm delivering actionable research and strategic guidance to technology leaders, innovators, and decision makers around the world. Our research focuses on the transformative technologies that are dramatically reshaping industries, economies, and workforces today.
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For more information about ABI Research's services, contact us at +1.516.624.2500 in the Americas, +44.203.326.0140 in Europe, +65.6592.0290 in Asia-Pacific, or visit www.abiresearch.com.
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SOURCE ABI Research
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