UPS said Thursday it has taken a minority stake in self-driving truck startup TuSimple just months after the two companies began testing the use of autonomous trucks in Arizona.
The size of minority investment, which was made by the company’s venture arm UPS Ventures, was not disclosed. The investment and the testing comes as UPS looks for new ways to remain competitive, cut costs and boost its bottom line.
TuSimple, which launched in 2015 and has operations in San Diego and Tucson, Arizona, believes it can deliver. The startup says it can cut average purchased transportation costs by 30%.
TuSimple, which is backed by Nvidia, ZP Capital and Sina Corp., is working on a “full-stack solution,” a wonky industry term that means developing and bringing together all of the technological pieces required for autonomous driving. TuSimple is developing a Level 4 system, a designation by the SAE that means the vehicle takes over all of the driving in certain conditions.
An important piece of TuSimple’s approach is its camera-centric perception solution. TuSimple’s camera-based system has a vision range of 1,000 meters, the company says.
The days of when highways will be filled with autonomous trucks are years away. But UPS believes it’s worth jumping in at an early stage to take advantage of some of the automated driving such as advanced braking technology that TuSimple can offer today.
“UPS is committed to developing and deploying technologies that enable us to operate our global logistics network more efficiently,” Scott Price, chief strategy officer at UPS said in a statement. “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.”
UPS initially tapped TuSimple to help it better understand how Level 4 autonomous trucking might function within its network. That relationship expanded in May when the companies began using self-driving tractor trailers to carry freight on a freight route between Tucson and Phoenix to test if service and efficiency in the UPS network can be improved. This testing is ongoing. All of TuSimple’s self-driving trucks operating in the U.S. have a safety driver and an engineer in the cab.
TuSimple and UPS monitor all aspects of these trips, including safety data, transport time and the distance and time the trucks travel autonomously, the companies said Thursday.
UPS isn’t the only company that TuSimple is hauling freight for as part of its testing. TuSimple has said its hauling loads for for several customers in Arizona. The startup has a post-money valuation of $1.095 billion (aka unicorn status).
A year after coming out of stealth mode with $40 million, self-driving truck startup Kodiak Robotics will begin making its first commercial deliveries in Texas.
Kodiak will open a new facility in North Texas to support it freight operations along with increased testing in the state. The commercial route
There are some caveats to the milestone. Kodiak’s self-driving trucks will have a human safety driver behind the wheel. And it’s unclear how significant this initial launch is; the company didn’t provide details on who its customers are or what it will be hauling.
Kodiak has eight autonomous trucks in its fleet, and according to the company it’s “growing quickly.”
Still, it does mark progress for such a young company, which co-founders Don Burnette and Paz Eshel say is due to its talented and experienced workforce.
Burnette, who is CEO of Kodiak, was part of the Google self-driving project before leaving and co-founding Otto in early 2016, along with Anthony Levandowski, Lior Ron and Claire Delaunay. Uber would acquire Otto (and its co-founders). Burnette left Uber to launch Kodiak in April 2018 with Eshel, a former venture capitalist and now the startup’s COO.
In August 2018, the company announced it had raised $40 million in Series A financing led by Battery Ventures . CRV, Lightspeed Venture Partners and Tusk Ventures also participated in the round. Itzik Parnafes, a general partner at Battery Ventures, joined Kodiak’s board.
Kodiak is the latest autonomous vehicle company to test its technology in Texas. The state has become a magnet for autonomous vehicle startups, particularly those working on self-driving trucks. That’s largely due to the combination of a friendly regulatory environment and the state’s position as a logistics and transportation hub.
“As a region adding more than 1 million new residents each decade, it is important to develop a comprehensive strategy for the safe and reliable movement of people and goods,” Thomas Bamonte, senior program manager of Automated Vehicles for the North Central Texas Council of Governments, said in a statement. “Our policy officials on the Regional Transportation Council have been very forward-thinking in their recognition of technology as part of the answer, which is positioning our region as a leader in the automated vehicle industry.”
Self-driving truck startup TuSimple was awarded a contract this spring to complete five round trips, for a two-week pilot, hauling USPS trailers more than 1,000 miles between the postal service’s Phoenix and Dallas distribution centers. A safety engineer and driver will be on board throughout the pilot.
Other companies developing autonomous vehicle technology for trucks such as Embark and Starsky Robotics have also tested on Texas roads.