UPS invests in self-driving trucks spearheaded by China’s TuSimple
NOW IS AN exciting time for logistics companies.
While outsiders seem to think that technology is disrupting the industry, the reality is that it is preparing forward-thinking businesses for the rapidly growing demand resulting from growth in international trade and e-commerce.
The development and deployment of self-driving trucks is one such opportunity, and some of the biggest logistics companies as well as startups and truck manufacturers are competing to be first.
Most recently, UPS announced that it has invested in Chinese self-driving trucks startup TuSimple — a great example of the company championing the technology and getting some skin in the game ahead of some of its competitors.
As a result of the investment, UPS will partner with TuSimple to test self-driving tractor-trailers on a route in Arizona to determine whether the vehicles can improve service and efficiency in the UPS network.
To be fair, the investor’s press release highlights that the partnership is actually just an extension of the ongoing commercial relationship between UPS and TuSimple in which UPS has purchased transportation services from the Chinese startup.
“The work with autonomous driving company TuSimple began with the goal of helping UPS better understand the requirements for Level 4 Autonomous trucking in its network,” explained the company.
“L4 Autonomous means the vehicle’s onboard computer is in complete control at all times, eliminating manual intervention. Currently, however, laws regulating L4 Autonomous driving require a driver in the vehicle at all times to take over operation if needed.”
Throughout the ongoing tests, UPS has been providing truckloads of goods for TuSimple to carry on a North American freight forwarding route between Phoenix and Tucson, Arizona.
The company initiated self-driving service in May 2019, with a driver and engineer in the vehicle. TuSimple and UPS monitor distance and time the trucks travel autonomously, safety data, and transport time.
Since UPS contracts with third-party trucking companies during its peak shipping season, the partnership is expected to potentially cut average purchased transportation costs by 30 percent.
“UPS is committed to developing and deploying technologies that enable us to operate our global logistics network more efficiently,” said UPS Chief Strategy and Transformation Officer Scott Price.
“While fully autonomous, driverless vehicles still have development and regulatory work ahead, we are excited by the advances in braking and other technologies that companies like TuSimple are mastering.
“All of these technologies offer significant safety and other benefits that will be realized long before the full vision of autonomous vehicles is brought to fruition – and UPS will be there, as a leader implementing these new technologies in our fleet.”
TuSimple started up in 2015 and aims to help businesses in China as well as the US pick up the slack as demand from e-commerce sales grow.
“If we succeed, about 15 million truck drivers in China and the US will be initially freed from their strenuous and dangerous work,” said TuSimple Co-Founder and CEO Chen Mo.
“We hope more investors can have faith that it’s going to happen in the coming decade; that more gifted graduates can choose to work on autonomous driving as their calling; and that more universities will take part in training such talent.”
In the next 24 months, more investments are expected in the self-driving trucks market — and a lot more innovation.