Kevin and Jack discuss several trends that emerged or grew in 2023 and how they might carry over into 2024. Specifically, hear the impact that digitalization, sustainability and automation could have this year.
Thank you to the sponsor of this episode, Geologic! GeoLogic uses scientific investigation and engineering design to provide innovative solutions to the most challenging mining, construction and development issues in a safe, effective, and cost-efficient manner. When it needs to be done right the first time, call GeoLogic at 770-824-4212.
Transcription
Kevin Yanik: Welcome back, everybody. Thanks for joining Drilling Deeper: A Pit & Quarry Podcast. I’m Kevin Yanik, editor-in-chief. We’ve got episode six on tap for you. Like to start with our episode sponsor and give them a thank you and a shout out, that would be Geologic. Geologic uses scientific investigation and engineering design to provide innovative solutions to the most challenging mining, construction and development issues in a safe, effective and cost efficient manner. When it needs to be done right the first time, call Geologic at 770-824-4212. Again, that’s Geologic, our episode sponsor. Thanks, Geologic, and thanks and welcome back to Jack Kopanski, our fearless managing editor on Pit & Quarry. He’s healthy it looks like.
Jack Kopanski: Yeah, much better off than I was last time you had to go at it solo. Sorry to leave you on an island there, but you did a great job. Yeah, no, feeling better. This winter’s just been a brutal one as far as getting sick. It seems like it seems like everyone’s getting something, and I unfortunately fell victim to that as well, but glad to be back. And I know Larry David would probably be mad at me for saying this here so late after January 1, but since it’s the first time I’m joining you on the podcast, Happy New Year.
KY: Happy New Year.
JK: Yeah, so, glad to be back and healthy and ready to talk some rock.
KY: Well, we’ll get into rock for a minute, but I want to extend the banter by just a moment, because maybe a few folks out there listening know that I’m a Michigan Wolverines fan and-
JK: Unfortunately.
KY: … Unfortunately. I think the only one at Pit & Quarry, just about the only one, minus one of our designers on Pit & Quarry, Courtney Townsend, who likes the Wolverines or that team up north, as we would say in Ohio here. Ohio born and bred, don’t like Ohio State. Actually, I think I would call it a hatred, but they got it done. First time since ’97 and just had to get that out there. Anybody listening from Michigan or of the Wolverines fandom, we got it done.
JK: I mean, I gotta say, first off, congratulations. Obviously very exciting. Like you said, first time since ’97. I have a couple of buddies that are Wolverines fans as well. They were super excited. Shout out Ryan Landoff and Dylan Bowers. Obviously a big thing, you know, you and I were talking ahead of the game. It just felt like they were the better team. They were going to get it done. I think I felt a little more optimistically than you did. I was sort of anticipating it to be the wider margin affair that it actually was.
Yeah, you know, I mean, they had an incredible season. They got it done. Shout out to Michigan and Jim Harbaugh, let’s see where he ends up after this year. And can’t necessarily say I blame you for the Ohio State hatred. As a Ohio native who was kind of born into Ohio State fandom, but as a Notre Dame fan by choice, I was at Notre Dame, Ohio State earlier this year in South Bend, and yeah, the Ohio State fans that were there left a pretty bad taste in my mouth, so I can’t say I blame you for the Ohio State hatred. Don’t necessarily love the Wolverine fandom, but nonetheless, congrats on the ship. Very exciting for you.
KY: Yeah, no. Thank you, Jack. Not sure our colleagues on Pit & Quarry – Rob, Dino, Tim – they’re gonna love the Michigan banter here, but it is what it is, guys. It’s fact. Unless they take it away, as Dino keeps saying.
JK: We’ll see.
KY: We shall see. Well, for the purposes of our readership or our listenership, if that’s a word I can put out there? As we were planning episode six here, which is slated to drop on January 16th, we were thinking about some of the presentations that the magazine did in tandem with other organizations. The last podcast episode, that would’ve been episode five, it was kind of a microcosm of a state of the industry report that I delivered to an industry dealer toward the year end 2023. And also in December, I had the opportunity to go down to South Carolina, Columbia, South Carolina for the South Carolina Aggregates Association‘s management workshop, or Workshop and Exhibition, rather. It’s the third year they’ve had that, and they asked me to talk about innovations in quarry and plant technology. So I gave a presentation down there. Jack, you had a chance to be in South Carolina for the 2022 rendition of that show. And I remember you came back and you shared a positive feedback about the growth of that organization, and being down in Columbia this time around for year three, in December of ’23. Yeah, it seemed like it was a really great platform for our industry. It’s a growing market. Got a lot of support there for the association. And, you know, it’s a great opportunity for me to visit with the good producers down in South Carolina.
JK: Yeah, no, like you mentioned, being down there in 2022 was definitely a very fun experience. Only the second year that the association had existed, and the second year that they had put on the show. This last year, 2023 obviously, being the third year of all that. And yeah, being down there was super fun. Got to moderate a panel down there. Like you mentioned last year, you were able to give a presentation. So, good working relationship, obviously, but also just objectively, for a state association that’s so young, gotta give credit to Jessica Palmer for doing what she’s been doing there as executive director. You know, that association has just seemingly grown year after year. I mean, I know it seems like they’ve doubled and then doubled again, their attendance at their Workshop and Expo, so I was glad you got to go this year to kind of experience that. And yeah, they’re doing a great job down there. Definitely something to check out if you’re down in the South Carolina area and not already a part of it.
KY: Yeah. So really, as I prepared my presentation for them, I think I even mentioned to Jessica Palmer, I’m like, “You know what? This presentation, I’d love to podcast it up, bring Jack in, get some commentary on it.” And so that’s what we’re going to do here today. Again, talking about innovations in quarry and plant technologies. Maybe just to kind of frame this a little bit, I was thinking about the history of our industry in terms of our adoption of technology. And again, I haven’t been around just like you haven’t been around for the entire 100 plus year history of quarries and aggregates, Jack, but just the things we know, it’s an industry that long relied on manpower. When you think about the operations of the early 20th century, or even the mid 20th century, it took a lot of people, a lot of labor, to make those operations go. Today, we can get away with just having single digits, seven or eight people even in an operation. And you know, a lot of that is a byproduct of the technology and automation that we’ve seen.
But we’ve seen more technology, I’d say, come in, or more willingness or readiness to take on technology. Although, as I think about our industry historically, too, I know over the years I’ve come across studies from third party research entities that were looking at various industries and kind of analyzing their willingness or unwillingness to adopt technology, and mining – with aggregates as part of mining – mining is always the laggard, it seems like, in terms of industries that are on the cutting edge. That’s long been the case, but of late I think that maybe we’re gonna get out of the basement in terms of technology adoption. You know, we’re coming into the 21st century. It’s kind of an exciting time, and we’ll talk about some of the specifics as to why it’s exciting, but it’s an exciting time, I’d say, for our industry in terms of change.
JK: Yeah, I mean, I guess you could almost say that in a sense … You talk about being slower to adopt technology. I guess you could put it in the way that the industry has kind of been set in stone, if you will. Pun intended.
KY: You didn’t write that one down, huh?
JK: No, that was straight off the dome. That’s all this beautiful mind at work. Yeah, I think that was one of the things as I’ve gotten to know the industry a little bit more, that is, on one hand surprising, but on the other hand isn’t, because you do have these long-standing companies that are generation after generation after generation, and people stay in these jobs and these careers and with these companies for so long that you get used to a certain type of way of operating. And change isn’t obviously always the easiest thing. You know, there’s a lot of fear, costs, uncertainty that goes into changing this kind of stuff. So on the one hand, it kind of makes sense, but on the other hand learning what I have about the industry, they do seem to be on the forefront of so much other stuff that it kind of surprised me when I realized that there was as much hesitancy as there was, perhaps, to adopt. And, yeah, definitely, I think in this last year, at least speaking for myself, from what I’ve seen and heard, it does seem like that trend may be starting to shift to where there’s more willingness, more openness and more ability to try new things, do trial and error. I think people are more open to saying, “You know, we’ll give this a try. If it doesn’t work, we tried it. We can go back to what we’ve been doing for years if it doesn’t work. But let’s give it a try. Let’s see.” And you know, the benefits hopefully will outweigh potential negatives.
KY: Yeah. I was thinking about why we’ve been slower to adapt. You know, why the mining industry, or why aggregates has always been the laggard when it comes to adoption of technology, and some of it fits into what you’re talking about. I think, for the longest time, and there’s still the case to be true here with the family-oriented-ness of our industry. I mean, we have a lot of family companies. A grandfather passed down the business to a father, then to a son, in some cases, we got two or three, four generation companies. And so the way of doing things, the equipment that was utilized – or not utilized – was passed down from grandfather to father, father to son. So, there’s that narrative.
And I think there’s a case to be made that the more private equity even coming in, bringing in fresh dollars or new dollars, new ideas, wanting to do things a little bit differently, maybe a little bit more efficiently, not afraid to stay in the box that we were in for a long time as an industry. So, I think that factor is at play. I think there’s also this dynamic, or this idea of prove it to me first. Because we’ve done crushing and screening and processing rock for so long, you know, for 100 plus years as an industry, when a new crusher comes in or there’s some technology incorporated into the crusher or some other component of aggregate processing, it takes a lot of convincing to get an operator or a business owner to want to go down that route. And I think cost too, especially the last year or two, I think that’s been a factor to maybe hinder us a little bit.
And I think, on the flip side too, Jack, maybe on the consolidation side I would argue, too, the fact that our industry’s gotten bigger companies, we’re as big as we’ve ever been in terms of some of the company sizes. I think a possible limitation, too, is that maybe we have too many cooks in the kitchen. When I say that, maybe we’re not able to make decisions adeptly. You go to ConExpo-Con/Agg, for example, and you see all this new tech. That’s great, but how do you get that funneled through a major company with so many people, so many people want to have a say on the decision of buying into a technology? So, I mean, that’s something that maybe slows us down as well.
JK: Absolutely. I mean, it’s kind of one of those things where you look at it from both sides, where there’s … there might be the thought of, “If it’s not broke, don’t fix it.” But at the same time, I think a lot of companies and a lot of producers, manufacturers, whoever be, are realizing that it is or will soon become the difference of, okay, we can operate at the same level we’ve been, but if XYZ Company that’s our competitor is starting to adopt these things and they’re operating at one and a half, two times the level we’re operating at, yeah we can keep doing what we’re doing, but do we want to lag behind? Do we want to be that sort of laggard that you’re talking about, that I think might be one of my new favorite words. Or, do we want to keep up with the other companies and possibly supersede them if we can adopt the right stuff and start doing things?
And I also think there’s just an interesting thing to look at, the difference, or maybe what you’ve seen between what larger, maybe public companies are doing because of that cost element, or maybe the accessibility to it, versus maybe a smaller, private company that might not have the means or the resources or maybe the ability to test and fail where, you know, it would have to be something that works right from the get-go. They don’t have the luxury to be able to take a hit on trying something new and it not working. So, definitely a lot at play, but I think just to kind of bring it all full circle, like you said, I think we’re starting to see that trend in the right direction.
KY: Yeah, so maybe too, to lay out the trends that we’ve seen, maybe the ones you’ve been reading on the pages of Pit & Quarry over the last 12 to 24, months. There’s two or three of them that I think really are taking center stage at this point. And even since the turn of the calendar year, Jack, we’ve seen some developments in a couple of these. And I would start with number one being digitalization. There’s a lot more digital technology being embedded and utilized in aggregate operations. I’ll get a little bit more to that here in a bit with you. Secondarily, I think sustainability is a big driver. You see a lot of these initiatives by the public companies. A lot of the companies in our industry are vertically integrated, and so they have initiatives, maybe on the cement side of their business or the ready-mix side.
I don’t know that sustainability is permeating quite as much in the aggregates world as it is those other more downstream construction materials environments, but some of those initiatives that you’re seeing from the public producers who are vertically integrated, they’re taking some of that mindset and then bringing it into the aggregates side of their business as well. This other trend, or the third one I would say, is autonomous hauling. It’s something I know we’ve touched on previously, probably once or twice and one of the more exciting developments that we’re seeing. We’re not fully there yet, not really even partially there yet at this point in terms of having an autonomous hauling world. But that’s kind of where we are. Those are the trends I would say, you know, one, two and three: digitalization, sustainability and autonomous hauling, that are kind of driving the headlines for Pit & Quarry these days.
JK: Yeah, absolutely. It seems like those are the kind of buzzwords or talking points you almost can’t avoid if you’re in the industry, whether it’s someone talking about what they as a company or they as an individual are working on, or, you know, even if there’s people that are maybe trying to debunk what these sort of trends are doing, or maybe trying to poke holes in what’s going on. But either way, I mean, those sort of three things I think are definitely among the most relevant that we’ve heard about, because they’re so front and center, not only in this industry, but I think across industries. Maybe not necessarily the autonomous hauling part, but you look at autonomy, AI, a lot of the ways to do more with fewer people, and then to go along with digitalization and sustainability.
I mean sustainability, you can throw a rock and hit a company that probably has some kind of sustainability initiative right now, whether it’s big or small, whether it’s a public or private company of any kind in any industry. So I think the industry is doing sort of a good job, in that sense, of keeping up with what is going on, not only industry wide, but really kind of country, and in some senses, maybe worldwide, to make sure that they are staying as relevant and as up to date as possible. So a lot of cool stuff going on in each of those three topics.
KY: With digitalization, Jack, I’d say what that’s all about is equipping the equipment that we’ve long used: crushing, screening, scales, those sorts of things. Everything, pretty much, that lives in a quarry environment that’s a hard good. It’s putting a sensor or a widget or something on it that allows you to extract some information about how that device is performing. That isn’t brand new, I would say. But I think now we’re to a point where producers are getting into it, adopting a little bit more with the idea that the more information they have at their fingertips about the performance of their screen, for example. They can get in front of the maintenance of that screen, plan a little better, know when a part’s going down or has gone down and more proactively make decisions. Save a little bit more money at the same time, make better use of their labor force – their active employee base – so they can be a little bit more efficient the things that they’re doing in or around the plant on a day to day basis.
I think a lot of the digitalization is driven, I would say, by the manufacturing side, or the vendor side – those serving the producers. I don’t necessarily know that producers were asking for it, and I almost think that there have been a couple iterations, at least in my time, in terms of digitalization for our industry, or data development. Because when I go back a couple ConExpo’s ago, probably three I would say, back in 2014, I think there was a time leading up to 2014 or so when our industry was kind of operating in the dark ages, maybe, to put it mildly. Where we weren’t using a lot of modern technology. You know, you think about the smartphone. I mean, thinking back when I got my first Apple phone, it probably was 2007 or 2008. I mean, and so another decade goes by and we’re not really operating plants or getting information on our phones about our plants or our equipment. Seven to eight years, ten years after the advent of tablets and smartphone-type devices. So we saw that a lot of companies on the manufacturing side, they brought out their first iterations of technology that allows you to know a little bit more about what’s happening with their equipment that you’re utilizing at your operations.
But I think kind of what happened at that point in time, you know, midway through the 2010s let’s say, was that there was so much data being put out there by some of these products, you know, whether it was rolling stock or aggregate processing equipment, that producers didn’t really know what to do with all that information. And, you know, I think looking at Pit & Quarry, Jack, we have a data and analytics team, and they’re providing us data. They can provide a plethora of data to us about what stories are performing, what topics resonate with our readers. But not all data, is valuable. I think there’s value to all data, but just like with our readers and, you know, the producers out there, I think we were experiencing data overload, and we essentially just had to kind of evaluate that overload and say, “These are the metrics that we need.” And that’s what producers did, too. And so essentially, what happened, at least from my view, is that we saw a next generation, or a 2.0 generation of technology products come out in the last three to six years, and they’re resonating a little bit more with our readers, with aggregate producers. I think there’s still some conditioning to do among the aggregate producers out there to use some of the newer things that are out there. But, it’s coming, and it’s in a better place today than it was 10 years ago, I guess.
JK: Absolutely. You know, I think one of the things, you talk about all the different ways digitalization is being used in the industry. And just earlier today, I was reviewing a page from Pit & Quarry February issue. Be sure to be on the lookout for Pit & Quarry February, coming out next month. And on the page, there were two or three different types of monitoring softwares, there was one for a screen, one for a different type that I’m drawing a blank on right now. But that’s one of the things that I think is so … has been striking to me, is that you have hardware and software, again, to measure vibrations for blasts. You have hardware and software to measure how your screen is performing, how your conveyors are performing. You know what your haul truck fleets are looking like, where everything is. And I think that it, in a way, has made it incredibly simple for operators, but at the same time, kind of as you mentioned, and this is, I think, one of the things I’ve been hearing a lot of when I talk to people about digitalization, is that oversaturation, or, since I love little quips, how I like to put it: paralysis by over-analysis. Where if you have just a boatload of data in front of you, you’re almost staring at it like, “Where do I even start with this?”
Obviously it can be tricky finding that sweet spot, but I mean, I think we’ve seen, or at least heard, how it’s paid off in helping operations save time, save money, be more productive, increase their uptime. And you know, really also help when the industry’s continuing to face a labor shortage, where if you have fewer people that you need to gather this data or to compile it in a way that is beneficial, you know, that’s obviously a time and money saver. And I think one of the other ways that, you know, I know we’ll get into a little bit later in this episode, is the way it’s being used for ticketing, for weighing. Before, I remember back, and I think it was AGG1 ’22, I sat in on a seminar that talked about how previously, or years ago, truck would come up, it would get weighed or be evaluated in a certain way and you’d have to hand print a ticket. All right, well you gotta wait for that to print. It’s print out one of those, like, basically a fax machine, almost and you got to wait for that. Oh, well, now the printer’s jammed. Now we gotta get that fixed. Now we gotta send it through the tube to the person. They got to check it out, look at it. All right, yeah, sign off on it. Send it back. And now it’s as simple as pulling out your phone saying, “All right, you have it now, go ahead. Handle it when you get back to wherever.” Seeing it actually play out is something that’s obviously talked about a lot, but seeing true examples of it, I think, is so impressive to show. Yeah, there might be some areas of the industry that are slow to adapt, but I mean, when it comes to obviously the valuable, valuable data that these operators are looking for. There’s certainly no shyness in that front, which is cool to see.
KY: Yeah. It’s interesting to see from a vendor standpoint, too. A lot of companies have come into our industry from outside, identifying that we are ripe for growth. Just like I mentioned how we were the laggards on the adoption curve. You know, you got the early adopters or the innovators who are at the front end and mining or aggregates has historically been at the back end, or the laggards or the late adopters. Not necessarily everybody that’s coming into our industry knows the industry or has products that are custom for the industry. But, I guess just to put more plainly, too, everybody realizes that we’re ripe for change, ripe for growth, and technology is at the center of all of that.
Another thing, too, and I think this thought popped in my mind when you said something, Jack. But you mentioned labor, and I think as we adopt more technologies in the industry, that we’re going to be for the better in terms of recruiting and bringing the next generation in. Because, you know, we had, as I mentioned earlier, too, the grandfather imparted on the father, the father to the son. You know, the same ideals, the same ways of doing things and processes. And what we’ve seen – I’d say the last five, seven, ten years – is we’ve seen more outside the industry people come into aggregates, more technology savvy people come in. Helping long time producers, public producers and others, help them shape the future of their company and how they’re doing business operationally and financially, and they’re using technologies in ways today that they didn’t five to ten years ago. It’s exciting. I think there’s a lot more room for growth and room for change, but we’re getting there. I guess we’re still a laggard, you could say, but better late to the party than never, right?
JK: 100 percent. And I think you brought up an interesting point. I guess I’ll just kind of wrap my thoughts on digitalization with this. You talk about how the industry is adopting all this new technology and using it to essentially attract people where it’s interesting, kind of looking at the aggregate industry versus other industries, where I feel like other industries or other types of businesses you see more technology coming in to kind of do some of these jobs, as far as compiling data or sending out, you know, bills, or whatever the case be. And people would look at that and say, like, “Oh, you’re doing away with human jobs. You’re replacing people.” Well, aggregates are in an interesting spot because you’re never going to be able to fully get rid of people. And in a sense, it’s almost the opposite, where the more technology you have, the more you’ll be able to maybe attract people. You might not need as many physical people. But I think the more technology you have, the more appealing a job might be to someone seeing that you’re on the forefront of this and there isn’t that concern of, “You’ve got a data management system running? Well, I’m out of a job.” Someone’s like, “No, I want to be a part of this I want to find a spot for myself.” So it’s just kind of an interesting dichotomy, looking at how aggregates responds to having this type of technology that could be looked at in other industries as taking away jobs.
KY: An area that will be interesting to see how it fits or doesn’t with our industry is AI. I mean, that was all the rage in 2023 and we covered that as a company. We meet every year, bring all the different magazines we have, and AI was kind of a central theme of the conversations that we had as a company, looking at how that’s going to impact journalism and publishing and how we tell stories and what the issues are there. And there’s a lot of issues from the legal side to probably half a dozen others right now. But I don’t really, honestly, have a full beat right now on where AI ,or how AI, is going to impact our industry. I’ve had conversations with producers and contractors out there just to kind of gauge their thoughts, and they don’t really feel, from what they’ve largely told me, that it’s going to be a game changer for aggregates. I would imagine it’s going to have a place somewhere, but to be determined, I suppose, for our industry. Again, I suppose maybe on the positive side of this, I mean, if you don’t want more AI or you’re worried about protecting jobs, I mean, if our industry is historically a laggard on some things, maybe being a laggard on AI isn’t necessarily a bad thing if you’re worried about retaining jobs.
JK: Yeah, no, I think you’re absolutely right. And I just think again, just a final thought on that. You know, one of the things that stuck out to me during that meeting that you talked about is the way AI is already in use, kind of, maybe without us knowing it. You know, I know the software we use to transcribe our interviews is AI. There’s there’s different ways we interact with AI in kind of a day-to-day way that we might not even think about, or don’t look at necessarily as AI. But I think certainly the rise of the Chat GPTs and all this different stuff that you can throw in a prompt and it’ll recreate a photo based on your prompt in half a second, you know, I think it’s sort of bringing that thought to the forefront. Which I think is good. Because again, industries like ours are going to have to decide … I don’t even think the question is, is there a home for this? I think the question is, where is the home for this? Because it’s something that is at least currently gathering so much steam and is so on the forefront of everyone’s mind and in so many things that are being done right now that it might be hard for the industry to avoid it. So I think the more open minded companies and businesses and people can be to saying, “This is going to happen. Where are we best served by including this?” I think the easier that transition will be.
KY: Yeah, if AI proves it can increase efficiencies, make you more productive, make you safer, taking the people out of the quarry or the environment that has the inherent risk, contribute to sustainability in some way or simplification. I think you’re right, Jack, if you’re a business owner or operator and you’re not exploring that, you’re not doing yourself, your company, your people a service. So we’ll put a pin on digitalization. And you know, that’s a topic I think we’ll probably be talking about on Drilling Deeper in episodes to come. We’re always going to be talking about equipment and technology on the podcast here
So digitalization, trend number one. Trend number two, again, sustainability. And when I think about that, I think about the transformation in terms of power, fuel and what’s essentially behind the equipment that allows it to go. You know, we’re a very much diesel-oriented, diesel-powered industry, long have been. Now we’re seeing this potential push, at least on the vendor side, I would say. And maybe they’re being pushed by other entities like regulators, government, et cetera, to kind of find other ways to power our facilities, to power the equipment powering our facilities. Electric’s all the rage right now. You know, we heard about that quite a bit, the ConExpo-Con/AGG in ’23. Here in ’24, we’re only a couple weeks into the new year here, and we already saw one of the industry’s biggest producers make a big announcement on the electrification side. We published early this year already how CRH and Caterpillar struck a partnership agreement on electrification. They’re looking to accelerate the deployment of potentially CRH’s 70-100 ton class battery electric off highway trucks. Cat has that equipment and CRH is basically the first to sign this kind of agreement with Caterpillar to see what the potential is there.
We’ve seen this sort of thing happening on the autonomous front, and you know, here we’ve got CRH basically formalizing this agreement to explore through a pilot program, I guess, what the potential is for an electric hauler, an electric fleet in an aggregate environment. So, something we’re going to certainly be paying attention to here. I’ve already started kind of drawing up … in working with you on our Roundtable questions. The Pit & Quarry Roundtable is coming up February 1st and 2nd. We’re going to have a great opportunity, Jack, to hear from producers and manufacturers and others down in South Florida what the potential is, or what the road ahead is with electrification. But, you know, just like digitalization, I think we’re in the very early stages. And I would even say on the electric front we’re in the even earlier stages.
I don’t necessarily know that the industry at large is necessarily supportive of this, because again, we’ve been a diesel industry for for so long. You know, this is another one of those cases where we don’t want to change, we’ve done things a certain way. And to even think to kind of turn over diesel to electric overnight, five, ten years from now is crazy. And I know when we were preparing, we’re talking about these 2050 initiatives, or in some cases more aggressive, 2030, 2035 net-zero carbon emissions initiatives. These sorts of partnerships and pursuits like the CRH Cat one on electric hauling equipment. You know, that’s how companies are going to try to get there. Interesting, what we’ve seen in terms of sustainability for the aggregate industry, and I think for me, at least, the number one bullet point underneath that would be electric equipment and what its potential is for for our industry.
JK: Yeah. And that CRH-Cat news is obviously, like you mentioned, a pretty big development on that front. Two major companies, one of the bigger producers in the country, and obviously Caterpillar who’s a major player in the equipment game. It’s cool seeing that after, I think it was in the summer of ’22 or maybe fall of ’22 around the time we had our dealer issue, and I was talking to a rental company, and they had mentioned that they bought massive stock in electric pickups for on road service or employee use. They mentioned that that’s going to be a big push, was them getting those on road trucks. And obviously we see the off road trucks now garnering more attention. And hopefully this news will continue to spark that movement. It’s certainly a trend in a direction, I suppose, for the for the individual to determine whether it’s the right direction or not. But yeah, I think seeing two major companies like this take this step is, I think, going to be indicative of what might be to come as more and more people see companies of these size take this step.
KY: Another example, too, of our industry may be following being a laggard, and not saying that’s a good or a bad thing, I’m just saying, like you mentioned, with the on-road environment, we see this big push. So now we’re seeing companies like Caterpillar, Komatsu and others make investments in sustainable companies. For example, Komatsu, last year, acquired American Battery Solutions out of Detroit. ABS manufacturers heavy duty and industrial battery packs using lithium ion batteries for off-road vehicles. So, it’s not just talk anymore. You see the big names, the big manufacturers in our space making real world investments, putting dollars forward, and they will help to set the direction for our industry. You know, get the next 50-70 years set for us as we see that companies are putting out these initiatives related to their carbon emissions. I mentioned electric, that was a lot of, I guess what my diatribe was centered around. That’s where we’re seeing a lot of the focus and the money being invested in at this point, but electric isn’t necessarily the winner.
You know, think that we don’t even know if it’s going to be the winner in the on-road environment, because there’s a lot of issues that we’ve seen reported about electric vehicles. And you know, there are safety issues with the vehicles themselves and a lot to watch. You know, I say that too. I’ve got an example here too with Caterpillar, looking to pursue hydrogen hybrid powers for their their C13-D engine. They’ve got a pilot program, essentially, for this engine that is utilized on rock crushers and screens, potential there for natural gas with that. So again, I mean, I think the Cat’s and the Komatsu’s in the world, they continue to put their tried and true engines and equipment out there that’s framed around diesel, because that’s what the market is utilizing, and once at this moment in time, but they’re very much planning for the years to come, and be curious to see who else follows on the manufacturing front. And again, how is our industry going to adopt or not adopt that? Or are we gonna be forced to adopt that?
JK: Right. And I think you hit the nail on the head, as far as saying and bringing up that thought that electric may not be the winner. And I think whether electric is the winner or not, whether it’s more toward hydrogen, whatever sort of the down the road, whatever the predominant means of sustainability, or again, whether it’s electrification, whatever it be, I think one thing is abundantly clear, and that is that it’s not going to happen overnight. Like you mentioned, this is an industry that relies a lot on diesel. There’s a lot of belief, and for good reason, that diesel is more efficient, more beneficial than electric. You know, I mean, that again, was a talking point in the story I did a couple years ago for the Dealer Issue where they talk about, “Oh, we can get X amount of miles on diesel. We can only get X amount of miles on one charge,” and the number was, in my opinion, strikingly different, where I kind of thought like, “There’s that much of a difference between diesel and electric?”
And again, it’s sort of to the individual to decide what’s the best way to proceed. But whether you want to look at it or not, there’s benefits to both and there’s certainly a case to be made for why diesel is the way to go in this industry. And I guess kind of like you said about digitalization, I guess it’s kind of TBD on what, if there are going to be any laws made, or if there is going to be any sort of thing that requires companies in an industry or businesses like ours in this industry to make that transition. I would probably tend to believe that wouldn’t be the case, or wouldn’t go that far. But again, you know, we’ll see what happens. I think what’s going to be interesting to me is to see how companies you mentioned, like with Caterpillar, go to options that aren’t electric, go to hydrogen, go to whatever they need to do to find what is the most efficient, or what could be the most efficient replacement for diesel in the long run. Thinking back,
KY: Thinking back 10 years ago, I guess it would have been, maybe even longer at this point. But there’s this whole push for Tier 4 and Tier 4 Final vehicles, off road vehicles, equipment. And we went through the whole process, the Tier 1, Tier 2, Tier 3 and so on, and talking to producers, too, about the Tier 4, Tier 4 Final-type equipment. Now it’s out there. Not everybody likes it. Some people really don’t like it, so they’re looking for workarounds, trying to find equipment that can still be in service and in the field today. So with that whole idea, you know, the Tier 4, Tier 4 Final movement, as I describe it, I think we’re going to have producers that don’t like the direction that are going to look for workarounds or try to stick with things as they were. And, you know, maybe that’s okay. Maybe that’s not. I’m not trying to judge one way or another. I think we’re feeling out all these technologies and where we’re trying to get the industry at this point in time. But again, it’s going to be fun to watch, interesting to watch and see where things go.
Lastly, you know, I mentioned those other two trends, on to our third one here, autonomy. It’s so big or so interesting in its own right that I feel like it’s its own trend. It is a digital movement for our industry to go to autonomous hauling or explore this. Last year, the story was one that kind of was very much centered around Caterpillar and Luck Stone and what they’re doing with 777 haul trucks from Caterpillar. They’re obviously going to try to roll out some exploration this year in Virginia. Again, just like we heard from CRH in the last few weeks about electric equipment, they’re, too, looking at autonomous hauling, or they put out an announcement because they’re partnering with SafeAI, which I think is a company that, either you or I have worked with in the past, Jack. I can’t remember exactly, but essentially CRH has a venture capital unit called CRH Ventures and they’re planning to evaluate the feasibility and what the capabilities are of autonomous hauling tech that’s provided by SafeAI. It’s a pilot program. CRH, just like with the electric equipment that they’re looking at on the autonomous hauling equipment side, they’re still very much in a pilot program phase. But again, I can’t imagine a company is going to take on the exploration if they don’t see great potential there for efficiencies in production and safety and a whole other list of benefits that could could come to them.
I think now we’ve got Luck Stone and CRH in the fold here, two of the probably top 10 companies on the crushed stone side, I think, if I’m remembering correctly. On the top 100 list that we that we put out there. I’m sure there’s gonna be another domino that falls, or somebody else that partners with a Caterpillar, you know, or a SafeAI or somebody on this front to see what is possible with technology and aggregates. But again, it’s one that’s exciting because it’s different. We don’t know what we don’t know, and hopefully we get some answers here this year and in the coming years from some of our leading industry companies.
JK: I think it’s not only exciting because it’s different, which it certainly is. I think it’s exciting hearing from Luck Stone and Caterpillar, reading about CRH, understanding the way you put it, the efficiencies that this type of technology, at least on paper, can provide. It, to me, seems like almost a no brainer that once this is something that is maybe custom built or built enough for the aggregate industry, it feels like this is just going to go to the moon, in a sense.
We’ve talked about before, mentioning the Cat, Luck Stone partnership, using the using the 777, the 100 tons. And I know we’ve talked before about how scaling it down as kind of the issue. That’s something I’ve talked a little bit with the company Pronto.AI about for our January issue. They did a case study looking at how small autonomous, small manned, medium autonomous and medium manned trucks did sort of like a simulated case study with all of those different types of of trucks and sort of showed why smaller might be the way to go. Around sort of the 25-70 ton range might be the way to kind of operate. And obviously Luck Stone’s putting themselves in the position to use the 100 ton, which I think is going to be a fascinating thing to follow as this year goes on, once they put it into the Bull Run Plant.
But as much as we talk about it, it’s funny, this is one of those topics where, you know, when I got on supply chain, lead times, those were kind of the dominating factors. After a while, you’re kind of like, “Ah, I gotta write about the supply chain more. I gotta talk to more people about how they’re waiting for parts.” I personally never get tired of hearing about what’s going on with autonomy, or what’s going on with autonomous hauling. It’s just, it’s something that I can’t wait to see this hopefully come to fruition in the industry, to a point where it’s readily accessible, it’s something that is proven. You talk about the sort of prove it to me first approach that a lot of producers will take. So I’m beyond ecstatic to see what this year brings, and seeing now that CRH is exploring this as well is just another great step in the right direction.
KY: If I was betting on, I would bet on we will get there. I don’t know that we’re going to get there in the next three years. The fact that they’re using the intelligence or the technology in mining tells me that we can scale it down to the level that’s the most efficient from what you’re describing, as Pronto put it out. I think we’ll get there because of the desire to just push, innovate and try to discover the things that we don’t know. If there’s not a cost basis to it, or a cost reason to do it, I mean, maybe this is something that gets scrapped or put to the side. Maybe it never comes to the light of day, but I do think it will have a place. I don’t know that it’s necessarily going to be how every loaded haul operation industry-wide, goes about doing things. I still think you’ll have manned trucks. I don’t think that’s going to fully go away, at least in our lifetimes, but I think we can get to a point where we see that this is a fraction, or a good chunk, of reasonably sized operations. It’s probably a niche producer that can put it to use and make the cost argument for investing in it. But yeah, it’s probably going to be the story of the story of the decade, I would say, to see if we can bring it to commercialization and and make it truly viable.
JK: Yeah, you mentioned if you were a betting man, you might not say the next three years, but I’ll tell you what in sports book parlance, if I had to say in the next five years, I’d put the money line odds at about minus -400, -450. Like you said, seems very likely, again, with just how forward-thinking the industry is with a lot of this stuff. It does seem like an inevitability, but in sort of the best way possible.
KY: Maybe one other thought related to kind of close out the whole trends topic. And I shared this at the South Carolina Aggregates Association’s show and there’s a lot of new coming in. Maybe you’re a company that’s already doing some of the things or exploring the things that Jack and I are talking about here, maybe you’re not. I mean, there’s probably more of you out there who aren’t necessarily on the cutting-edge of this, but maybe you’re dabbling or exploring a little bit. But you know, as I talk to producers who are looking to do things a little bit differently, bring in new people to try to move things forward a little bit with equipment and technology, I think I hear a couple of sentiments that lend themselves to success.
One is to build slow. There’s a lot that you could do, or choose to do, in terms of adopting technology: digitizing your your equipment, your crushers, your screens, your rolling stock. You could do a lot of things at once, or you could do one thing at once and see how that performs and then build that one thing into another. So start slowly and work with your vendors to try to best reshape or pave the road forward for your company in the future. I think another thing that producers have shared over the years that allowed them to to excel is, you know, find the person in your organization who can help you move things forward. Or, if that person doesn’t exist in your organization, find the person from the outside and bring them in, somebody who can be the champion for the next generation of how you guys are going to run operationally, financially and through other means of your company. Jack, any other thoughts you want to add on the trends?
JK: Yeah, I guess one last thing I’ll mention. When you talk about building slow, that’s something that I think, at least for someone like me, is a kind of hard thing to do. At least personally I’m a very impatient person. I kind of want everything to happen now. I know it’s obviously a different scenario in business, but there’s a phrase that comes to mind that I remembered hearing at one point where having micro speed but macro patience is kind of the key. Where day-to-day you want to be doing everything you can to continue moving forward, but big picture, Rome wasn’t built in a day. You know, you’re not going to achieve everything you want to do in a week. But do as much as you can every day just to keep building that. And then, over the big picture, you’re going to get to where you want by taking those sort of day at a time, putting everything into it. Micro speed, macro patience is just something that I think kind of sums up what you’re talking about. And I think it’s something that our industry is very, already pretty well fine tuned for.
KY: Well, good final food for thought, from Jack on our on our trends. We’re getting to the point where we want this to wrap up here for everybody, but we’re at the point in time where we just announced our 2024 class for the Pit & Quarry Hall of Fame. Actually, we just did that today as we’re filming this in studio in our downtown Cleveland office.
But essentially, every AGG1 year, and this is an AGG1 year. AGG1 is March 25th-27th in Nashville, Tennessee at the Music City Center. So every AGG1 year, Pit & Quarry celebrates the Pit & Quarry Hall of Fame. Typically, we would enshrine four individuals within each class. So we just announced our 2024 class and it’s going to be made up of these four individuals: Tom Hill from Summit Materials, Neil Hise from Cemco, Louis Johnson from LJ Manufacturing and Charlie Luck from Luck Companies. We just mentioned Luck Stone earlier on the podcast. Not surprising necessarily that any of these four individuals were selected for induction as we have a selection committee that we’ve worked with over the years. Every living Hall of Famer gets a vote in our Hall of Fame. Congratulations to Tom, Neil, Charlie, and you know, Louis Johnson will be enshrined posthumously. Again, he was with LJ, huge on the crushing and screening side in the mid-20th century for our industry.
Jack and I will be down in Nashville for that. It’s a black tie ceremony. Our producer, Marie, behind the scenes is going to be down there as well. So if you want to celebrate our 2024 class, we welcome you to join us. Go to pitandquarry.com for more information about the ceremony, and how you can join us at our ticketed event. So with that, Jack, I think I’m going to leave it at that, and we will be back with another podcast. We’ve got our Roundtable coming up, and we’re planning on doing an episode or two down there when we’ve got the industry, you know, basically everybody together. That’s always exciting, so a lot coming at us as a staff here in the next few weeks. And Jack, welcome back. Glad you’re healthy.
JK: Thanks for having me back.
KY: For Jack Kopanski, I’m Kevin Yanik. See you next time.
