Editor’s Note: Expands with details from Q3 earnings report
Autonomous truck software maker TuSimple Holdings has surpassed 160,000 robot-driven miles for UPS and is expanding its autonomous freight network to move loads from Arizona and Texas to UPS air freight terminals in Orlando, Florida, and Charlotte, North Carolina.
“The paid freight part is good, and we like to get paid for our work,” TuSimple CEO and President Cheng Lu told FreightWaves. “At the end of the day, the revenue we have with UPS relative to UPS and the overall industry is tiny. It’s almost laughable really, given how much they bill every year.
“But being able to map the routes, have autonomous operations away from Tucson and Dallas is an indication of our operational maturity,” he said.
TuSimple (NASDAQ: TSP), the first autonomous trucking company to go public in April, has worked with UPS (NYSE: UPS) for 2½ years, running human-driver-supervised revenue-generating routes in the Southwest.
The company posted Q3 revenue of $1.8 million, beating analysts’ estimates of $1.65 million. It has 58 trucks with more on order.
“The ability to recruit new drivers and acquire new trucks for our fleet continues to be our most significant source of headwinds to revenue growth, but we have been able to navigate this environment and are on track to achieve our full-year revenue guidance of $5 million to $7 million,” TuSimple said in its earnings report.
Revenue miles traveled totaled 945,000 in the quarter compared to about 379,000 a year ago. Quarter-over-quarter, revenue miles rose 7%.
TuSimple lost 54 cents per share compared to an expected loss of 49 cents.
Double-digit fuel savings
The robot-driven routes from Phoenix to Tucson, Arizona, and Dallas show a 13% improvement in fuel efficiency, TuSimple said in its Q3 shareholder letter Wednesday.
Fuel accounts for 25% to 30% of the cost of operating a truck, second to driver pay and benefits.
“Everyone likes to make big claims on fuel savings, but has there been anyone with 160,000 miles of third-party-validated empirical data that has shown a 13% fuel efficiency?” Lu asked.
TuSimple trucks travel on interstates between 55 and 68 mph, the top speed UPS allows.
With the price of oil rising from a pandemic low of $30 a barrel a year ago to $80 a barrel currently, Lu said fuel savings alone make a compelling case for autonomous trucking.
“The fuel surcharge is getting more and more expensive,” he said. “A double-digit savings on fuel alone translates to billions of savings for the entire industry.”
Expanding its network
TuSimple will map routes for UPS — and eventually other shippers — from Arizona to Florida by the end of the year.
“We’re leveraging that to expand our network,” Lu said. “Given that it’s the same highway for everybody, that allows more scalability in our network. We could work with additional partners in the future, and some of that lane work has already been put in place.”
Lu said partnership announcements from his company and other startups benefit autonomous trucking as a whole, but follow-through is what really matters.
“The 160,000 miles, as far as we know, is orders of magnitude greater than any other collaboration in this industry,” Lu said. “And going deep is important for really bringing this technology to the market.”
TuSimple competitors are in various stages of testing their trucks toward the goal of removing the human driver as soon as 2023. Some of TuSimple’s competitors generate freight revenue but have not discussed specifics.
TuSimple itself has not disclosed all its freight customers but two that have been named, U.S. Xpress and Werner Enterprises, also invested in TuSimple.
“Early adopters and forward thinkers are good for the whole industry, whether working with us or somebody else,” Lu said. “It’s not meant to be exclusive because exclusivity is not a good thing.”