At a time when the map of transportation within Saudi cities is changing, Riyadh is preparing to enter a new experience in which the driver does not appear behind the wheel, and the success of the trip does not depend on his skills in dealing with the road. By mid-November, 24 self-driving trucks are expected to begin testing on the capital's roads, in an experiment that opens the door to the technology moving from transporting passengers to transporting parcels and goods.
This step comes after the Public Transport Authority sponsored last May the signing of a memorandum of understanding between Abdul Latif Jameel Motors and Zelos Tech, a Chinese company specializing in self-driving technologies, with the aim of adopting and enabling self-mobility solutions in the Kingdom.
The trucks expected to be operated in Riyadh represent one of the practical applications of this cooperation, as the first phase focuses on testing the ability of self-driving vehicles to transport parcels within the capital, in preparation for evaluating their performance and efficiency before moving on to broader stages of operation.
The General Manager of Mobility Solutions Projects at Abdul Latif Jameel Motors, Ammar Batarduk, said in exclusive statements to Asharq Al-Awsat that the trial operation will begin after completing the geospatial maps and training the self-driving systems on local roads.
He explained that the fleet allocated for the first phase includes 24 trucks of different sizes and models, 4 of which have already arrived in the Kingdom, while there are 20 other trucks in the transit phase, amid logistical challenges facing shipping operations from China due to the events taking place in the region.
Truck loads range between 0.5 tons, 1.5 tons, and 2.5 tons, and include refrigerated and non-refrigerated models, with the remaining batches arriving successively during next October and November.
Free trials with “Sabil”
“Abdul Latif Jameel Motors” is implementing the pilot phase - in cooperation with Saudi Post “Sabil” - to transport parcels from the main center to neighborhood centers in Riyadh, provided that the service is provided free of charge throughout the trial period.
Patrduk said that the company is ready to extend the trial period for several months if necessary, with the aim of collecting sufficient operational and investment data to evaluate the fleet’s performance and feasibility, before making a decision on commercial expansion.
The stage allows the company to test the vehicles in actual driving conditions within the capital, including their ability to deal with local roads and traffic, in addition to measuring their performance during different operating hours.
An investment of millions to test the feasibility
The cost of the pilot phase amounts to millions of riyals, according to Patrduk, and includes the purchase of vehicles, customs clearance, fees, and taxes. He explained that this investment does not aim to achieve a direct financial return, but rather aims to test the economic and technical feasibility of the technology, and collect the necessary data before making decisions regarding commercial expansion and the size of the future fleet.
The company did not specify a fixed size for the expected investment, as this is linked to the needs of the market and the development of demand. Patrduk said: “If the market needs 100 cars, we will provide 100 cars, and if it needs 500 cars, we will provide 500 cars, and if the market needs local manufacturing, we will manufacture locally.”
Operating savings exceed the cost of the truck
The company is betting that self-driving trucks can reduce operating costs compared to traditional vehicles. Butterdock explained that the price of a self-driving truck is approximately half the value of a traditional truck running on fuel, whether gasoline or diesel.
The operating cost gap widens with lower labor and maintenance expenses, in addition to the ability to operate trucks 24 hours a day, except for the periods needed to recharge them.
In an analytical reading, logistics expert Hassan Al Hilal believes, in a statement to Asharq Al-Awsat, that the most prominent economic impact will appear in reducing operating costs and raising the efficiency of supply chains, indicating that self-driving trucks can increase fleet utilization, improve trip planning, and allow operation for longer periods, especially in frequent and specific routes.
Al Hilal added that it is too early to determine a fixed percentage of reduction in logistical costs within Saudi Arabia, given the difference in savings depending on the type of shipment, distance, and operating model. He said, “The biggest savings opportunities lie in the cost of operational labor, raising the truck utilization rate, reducing waiting times, improving fuel consumption, and maintenance,” adding that “the economic value will be in increasing the fleet’s productivity and implementing more efficient trips.”
On the other hand, Patrduk said that the absence of a driver allows supply and delivery operations to be moved to the night hours, which increases the efficiency of fleet use in major cities - such as Riyadh - by taking advantage of periods when road traffic is less dense.
According to the company's estimates, the cost of electricity represents only about 20 percent of the cost of traditional fuel, while maintenance expenses decrease as a result of the absence of traditional engines and transmissions, so that regular service work is more focused on components such as brakes and tires.
Self-driving trucks rely on sensors and radars, enabling them to operate in night driving conditions without relying on human vision.
Road readiness determines the path of expansion
Despite these advantages, Al Hilal believes that operating self-driving trucks on a large scale in Riyadh requires more than good roads, as it requires high-accuracy, constantly updated maps, reliable communication systems, smart infrastructure, and coordination between concerned parties.
He pointed out that the most prominent challenges within cities are congestion, sudden changes in lanes, road works, unexpected behavior of some vehicles, dusty conditions, in addition to dealing with loading and unloading points. He said, “The most realistic start will be with specific, repetitive logistical routes and paths, before moving on to more complex urban operation.”
From transporting passengers to shipping parcels
The truck experience comes at a time when Saudi Arabia is expanding the testing of autonomous mobility applications, after the technology began to move from transporting passengers to the fields of shipping and delivery.
Last year, Saudi Arabia launched self-driving passenger transport vehicles, and is currently operating on more than 5 routes, including the “Roshan” area, Princess Noura bint Abdul Rahman University, and the route linking “Riyadh Gallery” and “Hayat Mall.”
This service transported more than 3,100 passengers across 1,600 trips - under the supervision of the General Transport Authority - as part of testing autonomous driving technologies in the Saudi urban environment.
The transition of these applications to the shipping sector opens a new field for testing the impact of autonomous driving on the efficiency of delivery operations within cities, at a time when e-commerce is expanding and the needs of supply chains for more efficient and flexible solutions are increasing.
From the roads to the sky
Abdul Latif Jameel Motors’ plans do not stop at land transportation, as the company has begun studying the market for delivering goods via drones, in preparation for entering this field with the completion of the necessary regulatory frameworks.
Patrduk expected that the process of developing legislation regulating the delivery of goods by drones would take between one and a half and three years, noting that the company is making contact with global suppliers of trucks and drones designated for transporting goods and individuals.
In evaluating these solutions, the company focuses on technical readiness, flight range, speed, the ability of vehicles and aircraft to operate in different weather conditions, and wind resistance, with the aim of reaching operational readiness as soon as official licenses are issued.
Thus, Abdul Latif Jameel Motors’ plan is not limited to testing self-driving trucks in Riyadh, but rather extends to developing a broader system of autonomous transportation solutions, starting with land transportation, and in the future reaching the delivery of goods by air, while testing the technical and economic feasibility of each solution before moving from experimentation to commercial expansion.
Chinese stocks and Hong Kong stocks ended Wednesday's trading on a higher note, as a result of strong gains in the technology sector, while the yuan stabilized against the dollar, with investors reluctant to build large positions before the US Federal Reserve's decision on interest rates.
The Shanghai Composite Index closed up 0.7 percent, and the CSI 300 index of leading stocks rose at the same rate, ending a series of losses that lasted four consecutive sessions. Technology stocks led the recovery, with the Chainext index rising 2 percent, while the Star 50 index, which includes technology companies in Shanghai, jumped 4.1 percent. In Hong Kong, the Hang Seng Index advanced 0.2 percent, while the Technology Stock Index rose 0.8 percent. The rise of the technology sector came after the Chinese People's Daily newspaper said in a commentary that artificial intelligence is not a "monopoly of major powers," and called on the United States to work with China to manage risks and create a non-discriminatory environment for developing technology.
• Attentions are on the “Federal”
Market gains remained limited before the Federal Reserve's decision, amid widespread expectations of a US interest rate hike, with investors particularly awaiting signals related to the path of monetary policy in the coming months. A poll conducted by Reuters showed expectations that the US Central Bank will raise interest rates and provide at least one additional increase by the end of March.
Commerzbank analysts said that the main question is whether the Fed will present the expected increase as a limited adjustment to enhance its credibility in combating inflation, or the beginning of a broader cycle of monetary tightening.
The importance of the decision increases for Chinese markets in light of oil prices remaining above $100 per barrel, continued US inflationary pressures, and rising Treasury bond yields, which are factors that affect the movement of the dollar and capital flows towards Asian markets.
• The yuan is moving cautiously
In the currency market, the local yuan settled at about 6.7112 to the dollar, while the yuan was traded in the foreign market near 6.7116, slightly higher. The People's Bank of China had set the daily reference rate at 6.7628 yuan to the dollar, which is the strongest level since February 2023, although it remains weaker than market estimates. Maybank analysts said that setting the reference price during the recent period indicates that the authorities are not showing strong resistance to the rise in the yuan, at a time when economic activity data still shows weak domestic demand. The rise of the Chinese currency has lost some momentum during the recent period, after the yuan achieved gains amounting to about 4.2 percent against the dollar since the beginning of the year, becoming among the best performing Asian currencies. Volkmar Bauer, currency strategist at Commerzbank, said that the weakness of the local economy represents one of the reasons for the slowdown in the yuan's rise, expecting the currency to continue to rise against the dollar at a gradual pace during the remainder of the year.
• Technology in the face of weak demand
The recovery in technology stocks comes after data showed that the boom in artificial intelligence and advanced manufacturing supported industrial production in August, in exchange for continued weak consumption and a worsening decline in investment. This discrepancy presents investors with an economy that benefits from strong industry, exports, and technology, but still faces difficulty in achieving a broad recovery in domestic demand.
At the same time, the stronger yuan has prompted authorities to encourage companies to increase currency risk hedging to protect exporters from exchange rate losses. On the trade front, attention is also turning to relations between Beijing and Washington. US Treasury Secretary Scott Besent said that he will meet with Chinese Vice Premier Hei Feng at the end of this week, before an expected meeting between US President Donald Trump and Chinese President Xi Jinping next week. Thus, Chinese markets ended the session on a positive note led by technology, but caution remained present, with investors waiting for the Federal Reserve’s decision and its signals regarding interest, in addition to monitoring the path of the yuan and the extent of the technology boom’s ability to balance the continued weakness of domestic demand.
