CHICAGO (Reuters) - A major truck fleet services company and a Silicon Valley startup are joining forces to market technology that allows large trucks to save fuel by driving closely together on the highway.

Omintracs LLC, which provides dispatching, routing and other services to a majority of the largest U.S. trucking fleets, and Peloton Technology, which develops autonomous systems for truck firms, said on Thursday they have formed a partnership to provide “platooning” technology that will eventually allow Omnitracs’ customers to run small, partly automated truck convoys.

Peloton, a startup based in Mountainview, California, whose investors include Magna International <MG.TO, Intel INTC.O, Volvo AB VOLVb.ST and UPS UPS.N, has been testing driver-assisted "platooning" in which trucks travel in close formation to reduce drag and save on fuel. The trucks communicate electronically to coordinate speed and braking.

Platooning uses a relatively low level of automation. The driver of the lead truck driver is in control, and the other trucks in the convoy follow automatically. For instance, if the driver of the lead truck hits the brakes, the other trucks will brake automatically. The drivers of the following trucks can disengage the system at any time.

The distance between platooning trucks is usually between 50 feet (15.2 meter) to 80 feet. The American Trucking Associations recommends maintaining a gap of two to three seconds between trucks, which at 55 miles an hour would be between 160 and 240 feet.

Under the partnership, customers of Dallas-based Omnitracs will eventually be able to platoon trucks in their own fleet using Peloton technology, or platoon with trucks from other companies, said Kevin Haugh, chief strategy and product officer at Omnitracs.

“We think there is real near-term potential,” Haugh said. “Unlike some of the other automated technologies that get a lot of attention, this has got real legs.”

The two companies said they could not provide a timeline for when platooning technology would become available to Omnitracs customers.

A number of truck manufacturers and startups are experimenting with platooning and autonomous technologies, including Daimler AG DAIGn.DE and Navistar International Corp NAV.N.

In the first real-world commercial use of autonomous trucking last October, Otto, the self-driving truck subsidiary of Uber UBER.UL shipped some 45,000 cans of Budweiser beer over 120 miles of highway in Colorado for Anheuser-Busch ABI.BR in a truck with no driver at the wheel.

Peloton says tests show its platooning technology saves the first truck 4.5 percent on fuel and 10 percent for the second truck. According to government figures, the U.S. truck industry spends about $140 billion annually on fuel.

Ten U.S. states have approved tests or trials of the new technology. Peloton’s chief executive, Josh Switkes, said the key is now to amend tailgating laws in other states that mandate minimum distances between trucks.

Switkes said under Peloton’s system the rearmost truck in a platoon will have the stronger brakes. The company has decided on only two-truck platoons for now - companies like Daimler have tested platoons with more trucks - to demonstrate the technology works before seeking to run longer platoons.

“We’re focusing on two trucks first where it’s simpler to get this product out as quickly as possible into the market place,” Switkes said.