Viewpoint: What This IPO Tells Us About Autonomous Freight Networks

The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.

TuSimple announced April 7 that it has filed to sell shares through an initial public offering, after having originally filed relevant paperwork with the Securities and Exchange Commission on March 23.

In this article, I examine TuSimple's S-1 filing for indications of what the future may promise for freight trucking. This is not an examination of financial data but rather an examination of the qualitative narrative that TuSimple is weaving about the future of its business.

The Trends Favor Autonomous Trucking

According to TuSimple, there's a trend toward more business-to-consumer and business-to-business e-commerce, with the attendant push for same- or next-day delivery, which will increase the demand for transportation and freight services. 

Concurrently, there's high driver turnover, exceeding 100%; a shortage of drivers that's projected to worsen by 2.6x by 2028; insurance premiums that are increasing at a compound annual growth rate of 5%; and a 40% increase in truck fatalities between 2009-19.

Furthermore, growing concerns about climate change create added pressure for the freight trucking industry to explore technological innovations.

TuSimple's Autonomous Freight Network

TuSimple is building an autonomous freight network that combines autonomous trucking, cloud computing, edge computing, route mapping and an operations oversight system, among other things. TuSimple expects that its autonomous truck network will enable it to reduce its reliance on drivers for long-haul trucking operations, leading to a reduction in costs of up to 50%.

TuSimple expects its autonomous freight network to provide autonomous freight capacity as a service to shippers, carriers, brokers and rail operators — enabling them to reallocate scarce resources while providing the flexibility to select a service model from TuSimple's offerings.

Building An Ecosystem

TuSimple is teaming up with several partners to enable it to bring its vision of an autonomous freight network to life. According to the S-1, the company itself will focus on perfecting its core autonomous trucking technology to focus on the middle mile while it relies on partners for other aspects of the technology and services required to make the autonomous freight network a reality.

Software Is Key

In reading the S-1, it is clear that TuSimple is a software company. This is another example of a software company teaming up with other participants in the value chain to create a supply chain platform or ecosystem such as TuSimple's autonomous freight network. 

Readers of this column may recall that supply chain platforms is a topic I have written about frequently — most recently on the J.B. Hunt-Google relationship published on Feb. 25.

In fact, TuSimple highlights its full stack of proprietary software functions, stating: "The five core components of our proprietary software stack powering our autonomous system include perception, motion planning, control, machine learning infrastructure and mapping. Each proprietary component is critical and interconnected to meet the unique challenges of operating an autonomous Class 8 semi-truck. Our software and onboard hardware including sensors, steering, braking and electronic compute unit systems are seamlessly integrated to enable technological breakthroughs such as our camera-centric long-range perception system."

Besides the IPO, this is a big year for TuSimple because the company states that, "In 2021, we expect to demonstrate our semi-truck operating on public roads without a safety driver or passenger on board. This demonstration is designed to prove out the advanced progress of our technology and will serve as one of the key upcoming milestones toward full autonomous freight operations."

My Dec. 26, 2019 column speculated about what we would see happen in the market for fully automated trucks. What do you think TuSimple's IPO suggests about the future for freight trucking?

If you are a team working on innovations that you believe have the potential to significantly refashion global supply chains, we'd love to tell your story in FreightWaves. I am easy to reach on LinkedIn and Twitter. Alternatively, you can reach out to any member of the editorial team at FreightWaves at media@freightwaves.com.

Author's disclosure: I am not an investor in any early-stage startups mentioned in this article, either personally or through REFASHIOND Ventures. I have no other financial relationship with any entities mentioned in this article.