The Uberization of Freight – Communities in the Logistics Space
The “sharing economy” is rapidly changing our behaviors as consumers. Uber, Airbnb and Lyft are just a few of the many platforms that are helping people sell, share, and rent their unused assets. The “Uberization” trend is disrupting traditional business models and touching nearly every corner of our lives, and even the logistics industry hasn’t escaped its touch.
With the Uberization of freight comes a variety of tools powered by cloud technology. Shippers are using smartphones and mobile apps to gain access to otherwise-empty trucks while also dealing more directly with drivers (versus just carriers and freight forwarders). These tools are letting individuals and companies communicate dynamically with each other to share assets and make deals. Since these tools are almost universally cloud-based, they aren’t limited to old-fashioned desktop PCs. Instead they go where their users go, from the warehouse floor to the office to the road.
Communities are springing up around these “sharing economies”, adding new levels of usefulness for their members. For the transportation industry, the Uberization trend is helping shippers connect with thousands of independent drivers that have empty truck space. Despite popular belief, individuals who own and operate their own trucking businesses comprise a large chunk of the U.S. trucking industry. These 350,000 registered owner-operators either lease to carriers or operate under their own authority, which makes reaching and connecting with them extremely difficult. What better way to find independent drivers than through a community that connects directly with them and allows shippers to secure otherwise-unused capacity on their trailers?
This level of Uberization should be a lifeline for shippers that are feeling the impact of the capacity crunch and truck driver shortage. Exacerbated by regulations like the electronic logging device (ELD) mandate and a strong national economy, these challenges aren’t getting any easier for shippers. Much like its pioneering cousin did with personal transportation, the Uberization of freight trend is focused on matching capacity to specific shipper needs. In the not so distant future, it will become the norm for shippers to leverage communities based on the cloud to gain visibility and book freight with an ecosystem of carriers they would never otherwise have had access to. This will help to lessen the impact of the capacity crunch and driver shortage by reducing the number of empty miles driven.
Participating in a community that provides access to an ecosystem of carriers not only enables a high level of load matching, it also streamlines the entire transaction and enables solid shipper-carrier relationships (a must-have in a world where trucks are expensive and hard to come by). This strategy has been wildly successful for Uber, and is demonstrating enormous potential for the logistics industry.
