In the U.S., trucks handle around two-thirds of the 20.2 billion tons of freight transported annually, but Parallel Systems, a Los Angeles-based startup, is aiming to shift a portion of this load to rail. The company is developing battery-powered, autonomous freight technology designed to work with existing freight cars and integrate with traditional train control systems.
Rail has traditionally been underutilized for short-distance deliveries due to the reliance on large, expensive locomotives used for long-haul transportation. To address this, Parallel Systems has created a system that allows freight cars to autonomously attach and detach, reducing the need for manual labor and improving braking efficiency. “We’re using a different physical architecture to accomplish truck-competitive economics at small scale rather than big scale,” said Matt Soule, founder and CEO of Parallel Systems. “The vehicle itself is compatible with existing rail infrastructure, and it is designed to operate alongside traditional rail operations.”
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The company has received approval from the Federal Railroad Administration to begin piloting its technology in Georgia, where it will test its system over a 160-mile route between the Port of Savannah and several distribution centers. Parallel also recently raised $38 million in Series B funding, bringing its total funding to over $100 million. The funds will be used to advance the commercialization of the technology, with the company aiming for its first commercial launch in 2026.
Sophie Bakalar, a partner at Collaborative Fund, which participated in Parallel’s Series B round, acknowledged that while the investment falls outside the firm’s usual focus, the company’s potential to disrupt the freight industry was compelling. “I think this team is really uniquely positioned to solve this problem,” Bakalar said. “It is a massive market and a massive challenge.”
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Soule, who spent 13 years at SpaceX before founding Parallel in 2020, emphasized the company’s goal of addressing inefficiencies in freight transportation. Despite lacking a specific background in rail, Soule believes the company’s technology could offer a cost-effective alternative to short-distance trucking. While Parallel has received global interest, it plans to focus on the U.S. and Australia in the near term.
“This is a generational innovation in terms of freight, and you don’t see a lot of change in the freight industry,” Soule said.