A future in which freight largely moves to a logistics system based around autonomous, driverless vehicles has taken a major step with the announcement that the U.S. Postal Service, USPS, will run a two-week trial with the start-up TuSimple. Autonomous TUSimple trucks, that will carry a safety driver and engineer will, starting from tomorrow, carry loads of mail between distribution centres located in Phoenix, Arizona and Dallas in Texas. 5 round trips covering the 1000 mile plus distance between the two centres will be carried out over the trial period.
Founded in 2015, TuSimple has raised $178 million in investment from backers including chip maker Nvidia, ZP Capital and Chinese microblogging site Weibo’s owner Sina. It reached a $1 billion valuation earlier this year and already runs commercial services in Arizona, where it has had 11 autonomous trucks in operation since early this year. The USPS route will see TuSimple’s trucks operating in New Mexico and Texas for the first time.
TuSimple has developed its own self-driving operating system that is based on nine cameras and 2 LIDAR sensors, which build a 3D map of a vicinity by sending out radar pulses. However, despite the current TuSimple OS including LIDAR, like Tesla, TuSimple believes that longer term future for its system will be vision-based and rely on cameras.
LIDAR systems are both bulky and expensive and Tesla CEO Elon Musk has been vocal in his opinion that they are not a commercially viable solution long term as they raise the cost and limit the design efficiency of driverless vehicles. The TuSimple driverless OS is built onto Navistar trucks.
Freight is a particularly interesting niche of the autonomous vehicles market for a number of reasons. Firstly, it is a very valuable market, with market intelligence agency Beroe putting the global market size at upwards of $2.5 trillion, the majority of which is accounted for by road freight carried by trucks. The market is also forecast to keep growing by 4% to 5% over the medium term as online commerce grows in market share.
Secondly, driver wages account for 30%-35% of the operating costs of freight companies so reducing that would lower costs significantly. Third, freight routes commonly include long stretches of motorway, which are easier for driverless systems to navigate than more challenging inner-city roads systems. And finally, vehicles that don’t carry commercial passengers are a less controversial testing-ground that regulators are likely to take a slightly more relaxed approach to.
TuSimple is not the only company working on self-driving truck technology. Uber, through Uber Freight, was a major player but backed out last year to focus on its core ride-hailing app business and upcoming IPO despite acquiring start-up Otto for $680 million 2 years earlier. But others still competing with TuSimple include San Francisco-based Embark, German giant Daimler, Sweden’s Einride, Volvo, also from Sweden, and Waymo and Tesla, who are both also at the front of the race towards driverless cars.
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