The Atlanta Journal-Constitution
UPS orders 10K electric trucks
Delivery giant also will test self-driving minivans later this year.
In what it calls a move to accelerate fleet electrification, UPS has ordered 10,000 delivery trucks from electric vehicle maker Arrival.
It’s the Sandy Springs-based shipping giant’s largest-ever single order of electric vehicles.
The two companies are working together to develop electric vehicles with advanced driver-assistance systems, including the potential for driverless movement on property at UPS facilities — technology that it will test starting later this year.
UPS announced it is partnering with Waymo to test autonomous vehicle package pickups in the Phoenix area. UPS said Waymo’s Chrysler Pacific minivans will shuttle packages from UPS stores to a UPS sorting facility, with a driver on board to monitor operations. The technology allows the company to experiment with later pickups at UPS stores.
The move comes after Waymo, the self-driving unit of Google parent Alphabet, launched a pilot program in Atlanta in 2018 to use a self-driving truck for deliveries to Google’s data center, with drivers in the cabs to monitor systems and take control if needed.
UPS has been testing self-driving tractor-trailers since last year through a partnership with autonomous driving company TuSimple.
The electric delivery trucks from Arrival will start coming to UPS later this year and continue through 2025.
The Arrival vehicles are
expected to be deployed in Europe and North America.
UPS did not disclose the price it is paying for the Arrival order but said the vehicles are a “highly competitive value proposition” compared with traditional internal combustion engine vehicles and other electric vehicles.
UPS is also making a minority investment in Arrival through its venture capital arm UPS Ventures.
UPS will have priority access to buy more electric vehicles, contingent on successful tests of initial vehicles. Its investment in Arrival allows it to fast-track orders.
The shipping company also has partnered with other companies for electric vehicles, including Workhorse Group Inc. and Tesla Semi trucks. Out of the more than 100,000 vehicles operated by UPS globally, the company has about 10,000 alternative fuel vehicles in its “rolling laboratory” fleet.
“Electric vehicles form a cornerstone to our sustainable urban delivery strategies,” Juan Perez, UPS chief information and engineering officer, said. “Taking an active investment role in Arrival enables UPS to collaborate on the design and production of the world’s most advanced electric delivery vehicles.”
According to Arrival CEO Denis Sverdlov, vehicles can be created to meet UPS needs for driving, loading and unloading, and back-office operations.
While announcing results, UPS CEO David Abney said the company is investing in speeding up its delivery network with more automated sorting facilities, expanded weekend operations and new technology, including drone delivery service on hospital campuses.
The rush is driven by the growth of Amazon one-day shipping and consumers’ demand to get their orders faster. Amazon is the largest customer for UPS.
“We’re embracing the e-commerce shift to faster delivery,” Abney said. “We are absolutely speeding up our network.”
UPS announced the moves just before reporting a $4.4 billion profit for 2019. The company’s 2020 outlook fell short of Wall Street’s expectations, prompting a 6.7% slide in its shares Thursday and a further decline of as much as 3.5% early Friday afternoon.
“The opportunities are there. Shareholders would expect us to take it,” Abney was quoted by Bloomberg as saying in an interview Thursday. “If the end number is a little bit less than what people were expecting, it’s an investment in the future, but the short-term future.”