UPS buys stake in self-driving truck startup

UPS Inc. is extending its presence in the self-driving truck sector, making an investment in an autonomous vehicle startup that says its technology can reduce the costs of shipping goods via tractor-trailer by 30 percent.

UPS' venture capital arm, UPS Ventures, took a minority stake in TuSimple, a San Diego-based tech firm that has sold transportation services to UPS in the past.

Terms of the deal were not disclosed.

The companies will now extend their "ongoing commercial relationship" by continuing a series of tests of self-driving tractor-trailers on a route in Arizona to determine whether the vehicles can improve service and efficiency in the UPS network, UPS said.

The move marks the latest partnership between autonomous truck developers and fleet operators. Recent examples include Ryder System Inc. testing vehicles from Embark Technology, FedEx Corp. working with Peloton Technology, and Loadsmart linking up with Starsky Robotics. Kodiak Robotics is another firm operating self-driving trucks on test routes, but has not disclosed the providers of the freight inside.

TuSimple itself is also running tests with the U.S. Postal Service, following an agreement announced in May to conduct five round trips over a two-week period, hauling USPS trailers more than 1,000 miles between USPS distribution centers in Phoenix and Dallas.

UPS launched its own series of tests in May, providing truckloads of goods for TuSimple to carry on a North American Freight Forwarding route between Phoenix and Tucson, Ariz. The trucks carry a driver and engineer in the cab, as required by current laws, UPS said.

"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," UPS' Chief Strategy and Transformation Officer, Scott Price, said in a release. "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 said it benefits from the tests both through short term gain—the company often contracts with third-party trucking companies during its peak shipping season—and through long-term development. The company's tests with TuSimple are part of an advanced technology evaluation for vehicles in its UPS Global Smart Logistics Network. UPS 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.

TuSimple likewise said it gains from the partnership, and will use the new investment to "accelerate bringing the first self-driving truck to market to increase road safety," according to a statement by TuSimple Founder, President, and CTO Xiaodi Hou. TuSimple defines its mission as developing self-driving truck technology for class 8 tractor-trailers in order to increase safety, decrease transportation costs, and reduce carbon emissions.