Inside The Fence: Automated Trucking Gains Momentum With Outrider’s $73M Series C Fundraise

Outrider electric automated yard trucks are capable of connecting and disconnecting brake lines to ... [+] the trailer so that no on-site human assist is necessary. The robot arm assembly can be seen just behind the rightmost truck cab.

A fresh infusion of funding promises to expand automated trucking within a little-known aspect of logistics: yard trucks. Outrider has received an investment of $73M in a Series C fundraise, which they say will enable deployment of hundreds of their electric automated vehicles to customer sites.

The Yard Truck Use Case

Moving truck trailers around logistics facilities is a vital – yet not very sexy – cog in the massive contraption known as "the supply chain." When a trucker delivers a loaded trailer to a distribution center, the driver wants to minimize time spent there because their "driving hours clock" is running. The logistics yard may have a "drop lot" to enable the driver to unhitch the trailer so as to do a quick turn-around and get back on the road. The logistics center then employs their own yard tractors and drivers to manage the process of bringing the right trailer to the right door for unloading and/or position trailers at the proper doors for loading. This "trailer shifting" process can be disorganized and is typically done with less experienced drivers, resulting in bumps and scrapes and wasted time.

Viewed through the lens of an automated driving developer, these operations offer an ideal setting for early deployment. Automated yard trucks never leave the facility and aren't subject to the regulations which apply on public roads. The trailer moves are repetitive within a relatively small operations area. The activity in the yard can be chaotic but the speeds are relatively low; risk is contained. The logistic center's managers can define and enforce safety practices to further lower risk.

Outrider's Approach

Andrew Smith, CEO and Founder of Outrider, saw this opportunity way back in 2017 and combined the idea of automated driving with the use of then-nascent electric yard trucks. After founding the company and hiring an engineering team experienced in autonomy, prototypes were running within short order. Subsequent versions added increasing sophistication to arrive at the current system capability.

To autonomously move semi-trailers, it is key that the Outrider system work with how large distribution hubs operate today. What does this mean? Outrider's system dynamically adapts to changes occurring in the yard, such as interacting with over-the-road semi-trucks, delivery vehicles, service vehicles, and workers on foot. Outrider autonomous yard trucks hitch to and unhitch from trailers, connect and disconnect trailer brake lines using a robotic arm, backup semi-trailers with precision, interact safely with loading docks, and keep track of trailer locations throughout the yard. As of its Series C financing announcement, Outrider has completed tens of thousands of fully autonomous trailer moves.

Early thinking on yard automation envisioned a segregated area within the logistics facility where automated yard tractors would operate on their own, without needing to interact with other vehicles in the yard. Such an "incubator" approach might have made sense in the early days of truck automation but came with a fatal flaw: if you make a customer bend over backwards so that your not-very-intelligent robot can do a job, you will have very few customers. I raised this issue with Andrew Smith, who said their approach does not require a segregated yard: "Outrider vehicles easily deploy into existing customer operations, as well as integrate with customer yard management systems."

Outrider is leveraging NVIDIA DRIVE software to accomplish key perception functions.

As is true with other automated vehicle operations across the wider industry, responsibility for safe and efficient operation resides on-board the Outrider vehicle. An operations center provides remote support to resolve any unusual situations. There is no human-in-the-loop remote driving.

The Investment

This financing round was led by FM Capital. New investors include a wholly owned subsidiary of the Abu Dhabi Investment Authority and NVIDIA's venture capital group, NVentures. Existing investors participating in the round include Koch Disruptive Technologies and New Enterprise Associates. Outrider has raised $191 million in financing to date.

"Outrider has consistently delivered breakthrough technology to automate one of the most inefficient links in the supply chain – the distribution yard," said Andrew Smith. "Our customers will move massive quantities of freight more efficiently, safely, and sustainably using Outrider's technology. We are thrilled to have an outstanding network of investors who share our vision to set a new standard for the global logistics industry."

Mark Norman, Managing Partner of FM Capital, noted that "Outrider has addressed all the pieces – technology, safety, operations, and support – needed to deploy a reliable, industrial-grade system at scale. The company is a case study in bringing advanced robotics and autonomy technology to market."

New investors joining the Series C financing are B37 Ventures; Lineage Ventures, the corporate venture capital arm of Lineage Logistics; Presidio Ventures, the venture capital arm of Sumitomo Corporation; and ROBO Global Ventures.

New Funds Enable Scaling of the Outrider Solution

Outrider will use the new funding to expand its autonomy and safety technology portfolio, increase hiring domestically and internationally, and scale its yard automation solution with large customers in package shipping, retail, eCommerce, consumer packaged goods, grocery, manufacturing, and intermodal industries. This means attaining full operational capability while delivering the safety rigor, reliability, and service levels expected by the customer.

Outrider emphasizes that their technology also helps its customers achieve their sustainability goals. Instead of automating legacy diesel vehicles, Outrider automates electric vehicles to reduce fossil fuel use, lower energy and maintenance costs, and reduce emissions. Not only does the logistics operator benefit, so do residents living in neighborhoods nearby the logistics center.

As a key aspect of scaling up, the new funds will further accelerate Outrider's work with EV yard truck manufacturers to maximize the benefits of automation and electrification. Hiring internationally is aimed at ensuring that Outrider products are applicable to the international market and accessing global engineering talent.

Perspective

In conversations with trucking and logistics professionals at recent industry gatherings, I’ve observed that an appetite for automated yard tractors is steadily growing. In some cases, this interest is in parallel with planning for automated trucking operations over-the-road. Others view integrating autonomy within the closed logistics yard environment to be a lower-risk first step which can help them begin to understand how self-driving tech might perform on public roads.

Outrider is not alone in the automated yard tractor space. Others are Fernride, ISEE, and RRAI. In general, these companies have pilot projects underway with customers as well.

Outrider and their competitors have provided very few specifics about their customers and customer prospects. No surprise there. There's no motivation for logistics companies to tell the world when they have placed driverless vehicles, or any other technology, into everyday operations.

Nevertheless, Outrider states they have conducted joint product testing and pilot operations with companies that represent more than 20% of all yard trucks operating in North America. In our discussions, Andrew Smith was bullish on his company's upcoming "go to market" phase, emphasizing that letters of interest from large customers are in-hand for hundreds of units. Outrider's investors include leading logistics and freight mover companies; this certainly creates a helpful tailwind.

Across roughly 20,000 warehouses and distribution centers in the U.S., about 60,000 yard trucks are operating. Of course, this is only a fraction of the global market. These numbers are not large compared to over-the-road trucks, but the key is revenue and the pacing to ramp up revenue. Companies offering automated yard truck operations can begin generating revenue at customer sites now, without concern for regulations at the state or federal level potentially hampering deployment of on-road automation.

As the doom and gloom media narrative on self-driving vehicles arose late last year, my December 2022 article series "Autonomous Vehicles Reality Check" aimed to provide a more nuanced view, noting that the overall industry picture is mixed. For trucking, I noted that driverless freight movement is already underway on surface streets, with the over-the-road segment seeing a maturing of both the tech and customer readiness.

With the Outrider news, one company had a good day, metaphorically speaking. Across the self-driving space, others are struggling. In just the last few weeks there has been additional belt tightening and layoffs. Those laid off have in many cases seen plenty of job offers from the stronger companies. The industry continues to be in flux: there are crisp bright spots, gloomy dark spots, and a vast murky ocean of unknowns.

Prior to Outrider's announcement, the automated yard space had been relatively quiet. Based on Outrider's comments, the advent of robot yard tractors appears to be on the horizon. If so, this adds another piece to the puzzle of applying self-driving technology to wring more efficiency out of the supply chain.

Disclosure: I hold stock in Outrider and am an Advisor to RRAI.