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August 15, 2019 8:00 PM, EDT

UPS Invests in TuSimple to Pursue Self-Driving Trucks

TuSimple self-driving truck TuSimple

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UPS Inc. announced its venture capital arm, UPS Ventures, has made a minority investment in autonomous driving company TuSimple to test self-driving tractor-trailers on a route in Arizona to determine whether the vehicles can improve service and efficiency in the UPS network.

The amount of the investment was not disclosed.

This is an extension of the commercial relationship between UPS and TuSimple in which UPS has purchased transportation services from TuSimple, according to the Atlanta-based company.

UPS contracts with third-party trucking companies during its peak shipping season. TuSimple believes it could cut average purchased transportation costs by 30%.

“UPS is committed to developing and deploying technologies that enable us to operate our global logistics network more efficiently,” Chief Strategy and Transformation Officer Scott Price said in a company release. “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.”

The work with TuSimple began with the goal of helping UPS better understand the requirements for Level 4 Autonomous trucking in its network. L4 Autonomous means the vehicle’s onboard computer is in complete control at all times, eliminating manual intervention. Currently, however, laws regulating L4 Autonomous driving require a driver in the vehicle at all times to take over operation if needed, according to UPS.

TuSimple logo

Founded in 2015, TuSimple intends to bring the first Class 8 self-driving truck to market, to increase safety, decrease transportation costs and reduce carbon emissions.

“We are honored by UPS’ strategic investment and their vote of confidence in TuSimple. This proves their commitment to staying at the forefront of innovation,” TuSimple founder and President Xiaodi Hou said. “TuSimple is confident that it can accelerate bringing the first self-driving truck to market to increase road safety.”

Earlier this year, Robert Brown, TuSimple’s director of government affairs, told Transport Topics, “We were the first unicorn from a fundraising perspective, which is always important in the startup world and the trucking space. We had a valuation of over $1 billion. That was very exciting and a nice milestone for the company, which leads to hiring the best talent and to be able to scale the operations. That was a big win for TuSimple.”

UPS Inc. ranks No. 1 on the Transport Topics Top 100 list of the largest for-hire companies in North America.