TuSimple, which conducted its first driverless freight run in late December, is moving up its autonomous trucking commercialization plans to late 2023, including intermodal operations with Union Pacific in the Port of Tucson in Arizona this spring.
San Diego-based TuSimple Holdings (NASDAQ: TSP) said Tuesday it has completed seven trips of about 80 miles each with no one in the cab from the Port of Tucson to the Phoenix area. The collective 550 miles had no teleoperations or special traffic arrangements.
Some of the one-way runs were undertaken back to back and during early evening traffic on Interstate 10. Daytime runs are planned soon as well as expansion to Texas.
Watch now: TuSimple’s first ‘driver out’ pilot run from Tucson, Arizona to Phoenix
“A lot of people said ‘driver out’ was impossible to do, and if it was possible, it was not repeatable,” Pat Dillon, TuSimple CFO, told FreightWaves. “The real story around this is that what we’re doing is not a one-time event. It’s scalable.”
TuSimple’s focus is on making a business case for autonomous trucking. The company has said it expects to report $5 million to $7 million in revenue from freight hauling for 2021 when it releases Q4 and full-year earnings on Feb. 9.
“[Intermodal] is not going to be meaningful to our results over the next year or two,” Dillon said, “but definitely over the long term as you start to think about the amount of freight that Union Pacific moves by rail.”
Extending the railhead
Union Pacific (NYSE: UNP), the largest Class 1 railroad in the U.S. and an investor in TuSimple since 2020, will use its wholly owned Loup Logistics to coordinate freight shipments between rail and the first and last mile to TuSimple trucks.
“This groundbreaking autonomous driving technology and our partnership provide us a significant opportunity to scale the technology in our network, proactively reducing global supply chain congestion,” Kenny Rocker, Union Pacific executive vice president of marketing and sales, said in a press release.
“Partnering with TuSimple allows us to extend our operations beyond our rail hubs and serve our customers faster and more efficiently.”
As an adviser to TuSimple at Morgan Stanley before he became CFO in December 2020, Dillon worked with Union Pacific to cast a vision for how autonomous trucks could deliver goods to their destination faster and more cheaply.
“It’s hard to lay new rail racks these days,” Dillon said. “By building a virtual railroad, we can map a new location in a matter of weeks. The fact that we test in Tucson is serendipitous. This extends the railhead. As we get to full scale, this would be a perfect route to automate.”
Union Pacific will be TuSimple’s first intermodal partner. TuSimple also works with Canadian railway CN.
Advancing the timetable
TuSimple now expects to be running regular but limited driverless operations by the end of 2023 with retrofitted Navistar International LT Class 8 trucks. A factory-built autonomous LT is still planned for 2024.
The purpose-built truck is what TuSimple expects major fleets will purchase for the portion of their operations designed for autonomous runs. It has about 7,000 nonbinding reservations from fleets.
With more than 50 of its own Class 8 trucks — a mix of International LTs and Peterbilt Model 579s used in freight hauling and in testing in Sun Belt states — TuSimple will retain a truck fleet even when the fully integrated truck is available. Its business plan is to charge a per-mile fee for its software or be a freight contractor for smaller companies.
In preparation for expansion of its autonomous freight network beyond the 11,000 miles mapped so far, the company has provided technical specifications to commercial real estate developers to prepare for the future, including a 1 million-square-foot, state-of-the-art facility within the 27,000-square-acre AllianceTexas development in Fort Worth, Texas.
“Our repeatable and scalable ‘driver out’ operations marks a significant inflection point in our company’s history,” Chung Lu, TuSimple president and CEO, said in the press release. “We are the world’s first to complete all of the features of AV trucking technology.”