United Parcel Service Inc on Wednesday said it is ordering 10,000 electric delivery trucks from the Arrival Ltd and teaming with self-driving startup Waymo.

UPS and Waymo plan to pilot autonomous vehicle package pickup in the Metro Phoenix area. Starting in the coming weeks, Waymo’s Chrysler Pacifica minivans will shuttle packages from The UPS Store locations to a local UPS sorting facility for processing.

“UPS and Waymo are exploring automated and autonomous technologies to enhance network operations,” said Scott Price, UPS chief strategy and transformation officer. “Getting packages to our sortation facilities sooner and more frequently, while also creating an opportunity for later drop-offs for next-day service, can add enormous value for our customers.”

UPS and Waymo will explore how autonomous ground vehicles improve customer service and network efficiency with a goal of jointly developing a long-term plan for how the companies can work together.

In the Arizona pilot, the vehicle will drive autonomously with a Waymo-trained driver on board to monitor operations.

The UPS/Arrival partnership includes a minority investment from the world’s biggest package delivery firm and lands four months after customer-turned-rival Amazon.com Inc ordered 100,000 electric vans from Rivian.

Specificaly, UPS Ventures has completed a minority investment in Arrival, which makes electric vehicle (EV) platforms. Along with the investment in Arrival, UPS also announced a commitment to purchase 10,000 electric vehicles to be built for UPS with priority access to purchase additional electric vehicles.

UPS will collaborate with Arrival to develop a wide range of electric vehicles with Advanced Driver-Assistance Systems (ADAS). The technology is designed to increase safety and operating efficiencies, including the potential for automated movements in UPS depots. UPS will initiate testing ADAS features later in 2020. Future vehicle purchases are contingent on successful tests of initial vehicles. Vehicle purchase prices will not be disclosed.

Arrival produces its own major core vehicle components – chassis, powertrain, body and electronic controls. Arrival vehicles also use a modular design with standardized parts, a method that reduces maintenance and other costs of ownership.
Arrival will build the vehicles in micro-factories, using lightweight, durable materials the company designs and creates in-house. As an investor, UPS has the option to fast-track orders as necessary. UPS expects to deploy the EVs in Europe and North America.

The Arrival and Waymo projects “will help us continue to push the envelope on technology and new delivery models that can complement the way our drivers work,” Juan Perez, chief information and engineering officer at UPS, said.

Amazon’s delivery network is piling pressure on UPS and rival FedEx, which are racing to squeeze more profits from surging e-commerce deliveries that are upending their business models.