Uberization of Freight Transportation

 

The word 'Uberization of freight' is used interchangeably with automated freight brokerage operations and freight matching services in the freight industry today. The Uberization of Freight uses technology focused on apps to make the most of empty space in cars. This concept of convergence of freight is pure and simple. What makes it interesting is how more shippers will be able to profit from direct-to-trucker delivery prices.

The rise of the Uber ride-sharing app has gleefully anticipated the "Uberization" of a whole host of industries, from healthcare to food delivery, by both industry thinkers and hopeful venture capitalists. The trucking industry is one sector which many have hailed as a slam dunk for Uber-like disintermediation. After all, much like the taxi industry, trucking is simply about moving freight from point A to point B. A lot of money has now gone into startups looking to replicate Uber 's popularity in this space based on this logic. Indeed, Uber itself has confirmed that it feels it will use its model to change the trucking industry with the recent launch of Uber Freight.

Due to the benefits it offers, Uberization has gained momentum in the transportation industry. Not only will drivers with increased payloads on shorter timetables be provided by a computer or smartphone application, but it would also eliminate empty miles and road congestion. In addition, there will be faster transfers between suppliers, shippers, carriers and the consumer. The mobile app will also enable carriers to bill shippers without delay and get paid electronically. Other advantages include changes to the position of real-time cargo, truckload and capacity forecasts, tailored truckloads to minimize empty miles and parameters of the first and last mile, better usage of equipment and services such as vehicles and containers, real-time communication with all parties involved in the transport cycle, etc.

There could be some challenges to face for the logistics industry to evolve toward this model while looking forward to this concept, a smartphone pick-up and distribution technology will need to be in widespread use. It will be appropriate to implement additional changes to freight regulations, insurance policies, and enforcement. These additional factors, between shipper-carrier, shipper-broker, and broker-carrier, include environmental compliance and safety as well as failure and carrier risk. Contracts are increasingly complex and detailed between these groups. Think what will happen to insurance premiums for companies that outsource their shipping services through an app to a carrier? Who's responsible for late deliveries? Furthermore, hackers and ne'er-do-wells who could obtain access to monitored shipments could be vulnerable to the device. As well as fragmentation within the industry and the lack of common ground on the assumption of responsibility, progress has been slow for these reasons. In addition, many larger shippers and carriers have formed long-standing relationships that might be reluctant or unable to risk giving up on a mobile application's effectiveness.