Culver City, CA-based startup Parallel Systems, a company founded by former SpaceX, has raised $49.55 million in Series A funding to build autonomous battery-electric rail vehicles that move freight. The round is led by Anthos Capital, and includes investments from Congruent Ventures, Riot Ventures, Embark Ventures, and others.

The funds will be used to build a fleet of rail vehicles, execute advanced testing programs, and grow the team. The company, which came out of stealth mode today, has raised $53.15 million to date.

“We founded Parallel to allow railroads to open new markets, increase infrastructure utilization, and improve service to accelerate freight decarbonization,” said Matt Soule, Co-founder and CEO, Parallel Systems. “Our business model is to give railroads the tools to convert some of the $700 billion U.S. trucking industry to rail. The Parallel system can also help alleviate the supply-chain crisis by enabling low cost and regular movement of freight in and out of ports. Parallel’s competitive edge is our autonomous battery-electric rail vehicles, which are designed to move freight cleaner, faster, safer, and more cost-effectively than traditional trains or trucks.”

 

Using advanced technologies for environmental and safety benefits

Led by three former SpaceX engineers, Parallel Systems was founded in January 2020 by to reimagine the historic rail industry with innovative software and hardware.

The co-founders, Matt Soule along with John Howard, Vice President of Hardware; and Ben Stabler, Vice President of Software, have created a company developing autonomous battery-electric rail vehicles to move freight cleaner, faster, safer, and more cost-effective than traditional trains or trucks. They lead a team of about 25 engineers, formerly from notable innovators Google, Tesla, Uber, and SpaceX, based out of headquarters in Culver City, CA, with an office in Palo Alto, CA, currently testing autonomous battery-electric rail vehicles on a closed track in the Los Angeles area.

Parallel Systems says its automated, zero-emissions freight transportation solution will dramatically reduce the freight industry’s carbon emissions. The company says that trucking accounts for 444 million t (49 ton) of carbon dioxide, or approximately 7%, of all CO2 equivalent GHG (greenhouse gas) emissions in the U.S., according to the 2019 U.S. Environmental Protection Agency figures. It aims to significantly reduce GHG emissions by converting trucking freight to electric rail.

The company’s solution is more energy-efficient than traditional freight trains because it is lighter and more aerodynamic. Its vehicles use just 25% of the energy compared to a semi-truck and offer the lowest operational cost of any surface freight transportation mode. Less energy means smaller batteries, less strain on the grid, and lower charging infrastructure costs. The patent-pending platoon technology features self-propelled rail cars that push against each other to distribute the aerodynamic load.

New levels of railway safety are possible due to the vehicle’s ability to rapidly detect hazards on tracks. Railcars, which leverage its camera-based perception system and redundant braking, are said to be able to stop safely and autonomously up to 10 times quicker than a conventional train. This means the vehicles can perform an emergency stop within the line of sight that the sensors perceive an object. In addition, the platoons automatically maintain safe speeds based on the track conditions.

Parallel Systems’ platoons will reduce waiting times at railroad crossings. The platoons are shorter than traditional trains, and the vehicles will separate if blocking traffic, allowing emergency vehicles and other crossing road users to safely proceed without delays.

 

Reducing pressure on highway infrastructure and trucking industry

Parallel Systems says that the U.S. has the world’s most expansive railroad system with over 140,000 mi (225,000 km) of track, but the company estimates that less than 3% of that network is occupied by active trains at any given moment.

To make freight deliveries economical, today’s railroads typically focus on moving shipping containers distances more than 500 mi (805 km), according to the company. It has identified an opportunity to bring more business to rail by improving the unit economics over shorter distances.

Introducing a more flexible system will reduce pressure on highway infrastructure and the trucking industry as it faces overwhelming demand and a driver shortage of 80,000 U.S. drivers, according to the American Trucking Associations. Parallel’s unique system eliminates the constraints of traditional train architecture to compete more directly with the flexibility benefits of trucking.

Today, trucks are responsible for moving most of the nation’s freight by miles, according to Parallel Systems. Moving a portion of that freight volume to autonomous battery-electric rail will help alleviate highway congestion, improve road safety, reduce road wear and tear, provide shippers with more cost-effective transportation, and provide environmental health and safety benefits by reducing GHG trucking emissions.

Parallel’s proprietary architecture allows for smaller, cleaner, and less expensive terminals that can be built closer to shippers and customers, effectively opening up new markets and reducing last-mile delivery costs.

Today, traditional rail terminals have to be large enough to service long trains and are each built on hundreds of acres of land. These large terminals are expensive, remote, and result in slower delivery times.

In addition to reducing the cost of traditional terminals, Parallel aims to enable micro terminals as well as direct-to-seaport and direct-to-warehouse operations.

The micro terminals, low-capital expenditure, zero-emissions terminals built closer to shippers and customers, require less than 5% of the land compared to a traditional terminal.

The direct-to-seaport operation enables loading and unloading containers directly from the port crane onto the rail. This addresses supply chain issues by reducing congestion in seaports by eliminating the need for storage within the port complex; reducing yard truck usage; and creating a shuttle system to inland ports and terminals.

The direct-to-warehouse option connects rail to adjacent factories and warehouses, bringing containers directly to the facility and eliminating transportation mode changes and short-distance truck delivery costs. This increases weight capacity as rail can sustain more tonnage than trucks.

 

Architecture innovations

Parallel Systems’ patent-pending vehicle architecture combines software and hardware to increase the utilization of railroads. The company’s autonomous battery-electric rail vehicles load and transport standard shipping containers as a single or double-stacked load.

The architecture’s battery-electric propulsion system is by PMSMs (permanent magnet synchronous motors) for a payload capacity of up to 128,000 lb (58,000 kg) double-stack containers, or 2.8 times more capacity than a semi-truck. which uses 25% of the energy of a semi-truck. The range between charges is up to 500 mi (800 km), with charging time in less than 1 h. Its fully autonomous system is based on bi-directional camera-based perception.

Parallel Systems is developing software that allows its vehicles and platoons to safely integrate with existing rail operations so all freight trains and transit interoperate. The fully automated connected system leverages machine learning to optimize vehicle routing, traffic scheduling, and energy consumption. The company says the result will provide customers with hassle-free, best-in-class service and freight tracking.

The railcars, which are individually powered, can join to form “platoons” or split off to multiple destinations while en route. The railroad’s closed network is said to be ideal for the safe and early commercialization of autonomous technology due to limited track access and centralized traffic control.

Unlike traditional freight trains, Parallel’s platoons do not need to accumulate large quantities of freight to make service economical, which enables more responsive service and a wider range of routes. This is said to dramatically reduce the waiting times associated with loading trains that are miles long. The system can support service at a range of distances, from across a city to across the country.

Parallel’s architecture also bypasses congested switching yards, which are historically used to manually sort and reassemble freight onto secondary trains—saving hours, or even days, of transit time. The near-continuous flow of containers through terminals results in greater asset utilization, faster delivery times, and higher quality of service.

Check out more on the company and its mission here and a product testing video here.