The introduction of digital apps like Uber are positioned to cause disruptions in the on-demand freight business. However, many myths exist, and some companies say the competition has only motivated them to strengthen their logistics operation.
Uber, the popular ride-sharing app, launched Uber Freight this year with the ability to connect truck drivers to haul cargo long distances. Drivers use the mobile app to find truckload freight meeting certain parameters such as destination and time of pickup, among other factors. They then can book the load and get instant confirmation of the booking, as well as the rate. Payment shows up within seven days.
While Uber Freight can do many things, there are also many things it can’t do. For one, the majority of freight available to be moved is within Texas. Secondly, Uber says the only type of freight it is moving is 53-foot dry van and reefer, although it promises it will be “expanding to more types” in the future.
Finally, one of the greatest misconceptions is that Uber Freight, like its ridesharing parent company, works with drivers not affiliated with a commercial fleet or that Uber operates its own fleet of trucks. The reality is that the app is only available to drivers who work with approved carriers. Drivers are asked to submit carrier onboard documents for approval and carriers must have insurance, a motor carrier number, and at least a satisfactory rating. And no, Uber does not have its own fleet.
Freight brokers say that Uber Freight does not have the bandwidth to handle the many variables involved in transporting cargo, such as handing different deadlines, types of freight, and methods of transport. C.H. Robinson Worldwide of Eden Prairie, Minnesota, the largest freight broker in the U.S., says that its $1 billion investment over the last decade has resulted in updating and expanding its freight-hauling and logistics technology to make sure its operation is faster and more efficient — In other words, immune from startups like Uber Freight.
According to Trucks.com, brokerages like C.H. Robinson are busy automating certain procedures that used to be handled manually, and are actively showing customers that they have a better grasp on the industry than digital newcomers just stepping into the market such as Uber Freight, Convoy, Loadsmart, Transfix, among others. The messaging is that experience counts, as do partnerships that have been years in the making.
“The question becomes how comfortable are shippers dealing with startups that are heavy on technology and a little light on knowledge of moving freight,” John Larkin, a transportation and logistics analyst and managing director at Stifel Equity Research. “If my job depends on getting freight delivered, am I inclined to give a load to someone I don’t know with slick technology or am I better off giving it to a C. H. Robinson?”
How has your company responded to the increase in digital startups in the logistics field? Have you increased investment? If you are a shipper or a carrier, have you used Uber Freight and, if so, what was your experience? Tell us in the comments below.