UPS Ventures, the venture capital arm of UPS, has made a minority investment in autonomous trucking company TuSimple. The companies are testing self-driving semi-trucks in Arizona to determine whether the vehicles can improve UPS’ service and efficiency.

This is an extension of the ongoing commercial relationship between UPS and TuSimple in which UPS has purchased transportation services from TuSimple.

The work with San Diego-based 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.

Throughout the ongoing tests, UPS has been providing truckloads of goods for TuSimple to carry on a North American Freight Forwarding route between Phoenix and Tucson. The company initiated self-driving service in May, 2019 with a driver and engineer in the vehicle. TuSimple and UPS monitor distance and time the trucks travel autonomously, safety data and transport time.

“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,” said UPS Chief Strategy and Transformation Officer, Scott Price. “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.”

Founded in 2015, TuSimple is using deep learning to bring self-driving trucks to market, to increase safety, decrease transportation costs and reduce carbon emissions. TuSimple develops technology that will allow shipping companies to operate self-driving class 8 tractor-trailers – those that exceed 33,000 pounds and typically have three or more axles.

TuSimple raised $95 million in Series D funding in February 2019. The startup was valued at $1 billion at the time of the funding.

The global market for semi-autonomous trucks will experience a compound annual growth rate (CAGR) of 23.38 percent between 2018 and 2025, predicts Markets and Markets. It also forecast a CAGR of 39.96 percent for autonomous trucks, in terms of units sold, for the same period.

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

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

UPS’ autonomous trucking tests are part of an advanced technology evaluation for vehicles in the 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.