UPDATE: March 6, 2020: UPS is expanding its pilot with TuSimple to 20 trips per week after initial trial runs demonstrated 10% fuel savings, according to a TuSimple press release on Thursday. Ten of the trips will be on a new route between El Paso, Texas, and Phoenix and 10 will be on an existing route between Phoenix and Tucson, Arizona.
UPS' partnership with TuSimple has been key to the carrier's efforts to improve network efficiency and safety, according to a statement from UPS Chief Strategy and Transformation Officer Scott Price, "so it was a logical next step for us to expand the test to additional routes within our North American Freight Forwarding lanes."
Dive Brief:
- In a deal announced this week, UPS made an undisclosed minority investment in San Diego-based autonomous trucking company TuSimple, according to a press release. UPS has purchased transportation services from the company since May 2019, piloting overnight freight hauls between Phoenix and Tucson, Arizona.
- TuSimple's driverless trucks, which include Class 8 tractor trailers, are Level 4 autonomous, relying on camera systems, artificial intelligence and other mapping technologies to navigate highways, inclement weather and more complex urban environments, based on the company's 2019 safety report. Current laws require that a driver be present in the vehicle while it's on the road.
- TuSimple believes it could save UPS roughly 30% on average transportation costs, particularly during peak season when the carrier often contracts out deliveries to third-party providers, according to the press release.
Dive Insight:
As parcel volumes increase, delivery times shorten and drivers continue to retire from the workforce, carriers are beginning to experiment with autonomous vehicles to achieve cost savings and efficiency gains. UPS has been particularly focused on this, with COO Jim Barber saying on the company's Q1 earnings call that 80% of the company's network would "touch automation" in some way by the end of 2019, accompanied by an estimated $7 billion in spending to achieve that goal.
Alongside its work with TuSimple, UPS has been involved in a number of autonomous drone delivery pilots in the U.S. and around the world. In addition, it recently launched a new commercial drone delivery division called Flight Forward, pending FAA approval to begin operations.
UPS' competitors are also pursuing automated delivery solutions. Earlier this year, the U.S. Postal Service ran an autonomous trucking pilot of its own with TuSimple, running loads over a similar route in Arizona over the course of two weeks. Likewise, FedEx has partnered with Peloton Technology on semi-autonomous trucks, and Amazon has reportedly been spotted piloting Embark driverless trucks on domestic highways.
Despite the growing number of autonomous vehicle pilots in the logistics industry, the rigs are still a ways away from taking to the highways on their own. Safety remains a paramount concern, requiring human operators to remain in the trucks and, depending on the route, take over driving to and from highways as urban routes remain more dangerous for the AI-powered vehicles to navigate on their own.
