Autonomous startup takes the long road in logistics transportation

Nov. 1, 2019
First came investor funding. Next rolled in the big rigs. For TuSimple, a self-driving company, 2019 has been a busy year.

First came investor funding. Next rolled in the big rigs. For TuSimple, a self-driving company, 2019 has been a busy year. They have captured the attention of two shipping partners and the press. Now advanced driver assist technology is testing this startup in other ways.

In August, Forbes magazine reported that United Parcel Service (UPS) invested an undisclosed amount of capital into TuSimple with the goal to determine how their fleet of trucks embedded with digital cameras, lidar sensors and other proprietary technologies can optimize a faster delivery network. This minority stake by UPS in this San Diego business whose roots formed in China is the first of its kind to monetize artificial intelligence on wheels at this scale. Helping UPS to reach their customers with a commercial level-4 truck solution is how TuSimple wants to win at long-haul transport.

According to a May UPS news release, TuSimple has been regularly hauling their cargo between Tucson and Phoenix, Ariz. Together, both teams monitor improvements in service and efficiencies while the onboard computer steers the semi. An engineer and driver seated in the cab are ready to intervene, but they are mostly focused on analyzing safety data relative to autonomous miles logged.

In an interview with Aftermarket Business World, Vivian Sun, TuSimple’s head of business development, said that their close relationship with UPS will grow deeper as more complex testing on the public road stretches beyond metro Phoenix. When UPS is ready to go driver free, they will apply for state approval to initiate commercial delivery.

Citing Arizona’s executive order, Sun echoed a management declaration made to the Wall Street Journal in February that their 45 driverless vehicles will be operational by 2020 or 2021. As for qualifying nationwide, TuSimple is actively pursuing state approval rights within the legal boundaries of what each department of transportation allows.

Safety progress continues to propel TuSimple. This four-year old company wants to be the leading shipping solution for commercial transport. Their press release called out highway I-10 that snakes into Phoenix. It is of strategic interest to them because the order shipments total more than half of the economic activity for the United States.

On August 30, the Wall Street Journal stated that FedEX, Amazon and UPS need more options to carry their goods, in what the paper calls the “warehouse to doorstep” race. In order to grab more share of packages delivered, Amazon plans to boost their fleet of jets to 60 from 45.

Around the same period that UPS contracted TuSimple, Sun spoke about five round trips made between Dallas, Texas and Phoenix on behalf of the United States Postal Service (USPS). She rattled off a few points why the first phase with USPS has been working. Apart from on-time mail, each trial passed the safety standards over a 1,000 mile stretch across three state lines to reach the two sorting facilities in each city.

In one instance, severe weather, including a tornado had touched down nearby the driving route, but did little to compromise safety. Every rig uses an advance crash avoidance vision system that detects objects up to 1,000 meters with the ability to make the appropriate maneuver with 35 seconds spare. Under stormy weather conditions, she added, these trucks will able to handle the harsher climates in Michigan and New England.

USPS spokeswoman Kimberly Frum confirmed to AMBW that TuSimple had been carrying their letters and packages. Other than that USPS “is innovating and investing in their future,” Frum’s email stated, “We are conducting research and testing…” Frum declined to specify which next steps will follow with TuSimple for the rest of 2019.  

For two years, wrote Bloomberg News, The Office of Inspector General for the USPS had been vetting vendors with the best shipping control and speed. Rising fulfillment expenses has cost the postal service roughly $4 billion dollars a year. They blame the unrelenting driver shortage. Chuck Price, chief product officer at TuSimple told Bloomberg News that operator-free vehicles will shave off hundreds of millions of dollars.

Asked about TuSimple’s other efficiency promises, Sun replied that a five-day coast-to-coast run can easily shrink to two days. Sun emphasized that retailers and certainly the aftermarket could benefit under a quick turnaround time by passing on the freight bill savings onto the customer.

Forbes magazine identified other Silicon Valley competitors jostling for the No. 1 spot in autonomous driving like Waymo that has been conducting their own road tests. Aurora, which is funded by Amazon through the oversight of a former head of Google’s driving program, has fashioned their version of independent delivery.

For some time, Capstone Financial Group’s CEO Dan Smith has been keeping a close eye on the commercial competition. Smith revealed to Aftermarket Business World how often he communicates with leadership at TuSimple’s about their latest innovations. He bets that this engineer dominated business will bring relief to the driver shortage and unrestrained shipping expenditures. Highlighted in Capstone’s recent study, the American Trucking Association indicated that the need for operators will rise to 174,500 by 2024, roughly five times more than the base of 36,500 people wanted in 2016. A drop in qualified professionals, the report warned, could adversely limit product availability and hurt sales.     

Eliminating drivers could transform this negative trend into a monetary lift, explained Smith, but not to the point where individuals end up unemployed. In fact, at the local level, more job opportunities will be created by placing workers closest to the last mile. Most of the distribution and fulfillment activities would revolve around the busiest hubs with the fastest access to small towns and large urban centers. Without people behind the wheel, wages would drop in line with health insurance, workers compensation, and perhaps fuel expenses will recede. 

Where the automotive aftermarket stands to feel an immediate boost, noted Smith, depends less on TuSimple whose mission is to bring their software expertise to their partners. That burden falls on the carrier to customize a logistics solution that meets industry supply chain requirements. Compared to consumer goods, the auto parts trade is uniquely positioned due to the unpredictability in urgent repairs. Downtime can inflict a negative financial impact on any businesses dependent on their cars and trucks.

For long distance remedies, Vivian Sun emphasized that TuSimple’s team of engineers will stay engaged on producing sustainable ways to shrink waiting times, and to work closely with truck manufacturers in the OE space.

Forbes reported that early in the year that TuSimple raised $95 million from several investor groups, topping off the valuation above the one billion mark. Much of the spend will be dedicated to expanding their line of smart trucks completely integrated with software to interface with steering, braking, and powertrain. Engine supplier Cummings along with heavy duty manufacturers, Navistar and Paccar are jointly collaborating with TuSimple.

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