United Parcel Service (NYSE: UPS) has purchased a minority stake in the self-driving company TuSimple. The investment coincides with ongoing autonomous road tests the package delivery company is conducting on a busy freight route in Arizona.
Some of the money will be used to expand new routes for UPS as well as for the overall development of the autonomous platform, a TuSimple spokesperson told FreightWaves.
“Having a leader like UPS invest in TuSimple helps further establish credibility for the company and the technology with the original equipment manufacturers and Tier One suppliers,” the spokesperson added.
UPS and TuSimple did not disclose the size of the investment, which was undertaken by UPS Ventures, the UPS venture capital arm.
According to a press release, UPS initiated the partnership to better understand Level 4 autonomy, a designation that refers to a vehicle that can drive without human intervention or oversight, but only under certain conditions.
UPS began hauling cargo with TuSimple trucks in May 2019, with a driver and engineer in the vehicle. TuSimple and UPS are monitoring safety data, as well as the distance and time the trucks travel autonomously.
The news of the UPS partnership comes a few months after TuSimple announced a collaboration with the United States Postal Service (USPS). That pilot has since ended, though the two companies are discussing “next steps,” according to the TuSimple spokesperson.
TuSimple makes no secret of its ambitions to be the first fully autonomous truck on the road. But the company has plenty of competition, with Kodiak and Einride among others betting on self- driving big rigs.
This past spring Daimler Trucks announced the creation of a global organization focused on putting automated trucks on the road over the next decade. The initiative followed Daimler’s January 2019 announcement that it was investing $570 million in autonomous vehicle technology.
UPS faces its own challenges, especially since Amazon is now building out its own logistics infrastructure. Morgan Stanley estimates Amazon makes up about 10 percent of revenue and 15 percent to 20 percent of volume at UPS.
The TuSimple stake is part of UPS’ larger technology strategy and marks the first time a transportation provider has invested in an autonomous trucking outfit. The delivery company is investing in Internet of Things (IoT) technology, artificial intelligence (AI) and advanced analytics to increase fuel efficiency and improve customer service to ensure that UPS remains the shipper of choice, the release said.
“UPS is committed to developing and deploying technologies that enable us to operate our global logistics network more efficiently,” said 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.”