Can Trucking Really be UBER-ized?
Lately the buzzy topic of apps being applied to trucking, especially in freight-matching-provider has gained some traction, and all eyes have focused on an Uber Trucking sort of a proposal.
From afar, the business model for Uber being applied to trucking is an appealing one. After all, what is not to like when, in each area, the vehicle utilization model can match consumers with providers. When it comes to trucking, where 10%-23% percent of miles run empty, plus the increasing cost of e-commerce fulfillment, this idea grows in appeal. However, that is a simplified layout that doesn’t exactly lend itself as effectively to the trucking world.
Digital Freight Matching (DFM) companies use digital platforms to match a shipper’s freight with carriers who have the available space (capacity) to better utilize that motor capacity.
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A consultancy report suggests: companies marketing themselves under the “Uber for Trucking” title but expecting not to provide services beyond a basic freight-matching model should probably re-think their messaging.
Armstrong & Associates Inc. said a number of companies providing legitimate “digital freight matching” services have chosen to associate with the now-famous “Uber” name. But what this on-demand car-sharing model cannot match is compare with the multi-solution, value-added offered by truckers and third-party logistics (3PL) providers.
Armstrong & Associates, who released a new report named “Digital Freight Matching – Capturing Technology-Based Efficiencies in the Trucking Industry” address the key components of Uber’s model, the ride-hailing aspect.
Although digital freight matching has its place in the grand scheme of daily freight, it cannot be a one-size-fits-all substitute. Replacing the experience of providers that understand the business and can pull together people and technology to earn and keep a customer’s business, to resolve arising problems, all unique in their own way are things an app cannot do.
Taking the functionality aspect popularized by Uber and tailoring it to trucking with additional features useful to industry issues can make the idea a lot more appealing and desirable. Tasks like: algorithmic pricing, automated programming interface (API), map integration, track-and-trace, and mobile transaction are all important must-haves to today’s freight service provider, and DFM apps include these functionalities, plus trip planning, digital document storage, and TMS integration. But what is missing is what one cannot find in an app – simply put, the human factor.
Experienced, deep-rooted freight companies address exception handling, provide backup in the case of equipment breakdown, they are invested in keeping and nurturing a business relationship, with access to a wide variety of carriers and pulling from different resources to solve different problems. Is there an app that does all that?
Shipments are high-value and time-sensitive. There are more complex requirements such as specialized equipment types, shipments being transported in multiple ways, and protocols placed in case of equipment breakdowns. Therefore, the A&A report suggests that applying the Uber model (a similar app) to an industry as complex as trucking and freight doesn’t address problems. One can’t bottle the needs of this industry in an app as it will not offer extended solutions to multi-level challenges, which need a case-by-case attention and the appropriate remedy.
The general takeaway is that perhaps this industry is too complex to become an Uber type of business. However, Digital Freight Matching (DFM) is a technology worth discussing and apps worth revising. With the emergence of self-driving vehicles and drones who knows how effective, necessary or lasting DFM companies can become.
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