UPS Takes minority Stake in Self-driving Truck Startup TuSimple

Relationship expanded when the companies began using self-driving tractor trailers to carry freight on a freight route

UPS 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, Ariz., 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. The 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 it’s hauling loads for several customers in Arizona. The startup has a post-money valuation of $1.095 billion.

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