Will International Shipping Start Trucking Uber Style?
There are a number of big changes happening in the international shipping industry. Just to name a few, ships have been getting much, much bigger; the Panama Canal is expanding; and carriers, the international shipping companies operating shipping lines, are joining together through alliances and mergers.
But perhaps one of the biggest changes in international shipping will be happening on the ground before and after cargo hits the water or air.
Uber is making headlines by adding logistics services. The company has launched UberRUSH in three cities: New York, Chicago, and San Francisco. People can order small packages delivered from businesses right to them, all while tracking the progress of the delivery on an app.
Here’s Uber’s little commercial for how it works:
True, this is not international shipping, but the potential for this same idea to be utilized in international shipping not only exists, but companies are working on making it a reality.
On a larger trucking scale than the small packages Uber does with UberRUSH, there are already a number of companies and apps out there.
Check out Cargomatic. According to a video from USA Today, Cargomatic has been called the Uber for trucks. With an Uber-style app, Cargomatic provides shippers with less expensive trucking and truckers fill more of the capacity of their trucks by taking on extra shipments when they have space for it.
All it takes for truckers is a couple clicks on a smart phone to accept shipments and make more money.
Los Angeles based trucker, Cesar Lopez has been using the app for just under a year, according to the video. “You know, it has increased 35% of my business. And it has brought in over one hundred—way over one hundred thousand dollars,” Lopez says in the video.
Here’s the USA Today video for you to watch yourself:
Peter Moore wrote an interesting article published by SupplyChain247 called Making the Leap to Uber Trucking about how this Uber-style shipping process is infiltrating the freight transport market and could affect freight brokers, freight forwarders, 3PLs, and, of course, shippers.
For truckers and shippers, app based shipping arrangements should be seen as a good thing. It could easily increase profits for both. Freight brokers could end up losing a big piece of the market, unless they can adapt and create their own apps to provide the same Uber-style benefits.
Technology and the way people use it is always moving forward. There is no way that it won’t eventually catch up with the international shipping industry. It will cause the industry as a whole to adapt eventually.
Here’s an excerpt from Peter Moore’s article giving a glimpse into the benefits and challenges this app-based trucking creates for the industry:
While small truckers should welcome this new feed of spot opportunities, it’s important to remember that some very small entrepreneurs – some with only a pickup truck – will be also be getting those feeds.
This presents a dilemma for freight brokers and 3PLs with brokerage pricing models, as the collaborative nature of dynamic rate quoting via “app” will often involve process compromise for both the shipper and carrier.
The last two decades have seen a movement toward enabling non-professionals on the shipper side to be able to arrange freight through basic TMS tools and one-call dispatch at brokers.
The brokers, just like overseas freight forwarders, have provided value by being experts in arranging seamless shipping, knowledge of regulations, and the handling of Customs paperwork.
These new apps will provide enhanced billing, accurate tracking, and variable pricing that will change based on shipper needs – such as time of day, release values, loading, and unloading options.
Just as an Uber driver might tell you to walk to the corner so he can find you, an independent truck operator may need special considerations in order to provide low-cost, fast service.
The brokers will not necessarily be in a position to make process changes – like last minute extension of loading hours – in order to get a low-cost pick up. In these situations, the carrier will want to interact with the shipper’s operations management.
The shipper could do this with a smart phone, while an intermediary broker may slow the process. Maybe the shipper will decide to just use the app.
However, if a shipper is simply moving a high volume to the same destinations each day, dynamic, variable pricing may be too much trouble for such a small benefit.
But this new paradigm enabled by technology should give even this group of high-volume shippers pause. Remember that each day is different for the carrier, and many of their variable costs are due to shipper operational decisions.
If shippers can increase their flexibility at shipping, receiving, and insurance coverage they can share in carrier cost reductions in real time.
There are other concerns to consider when moving toward a collaborative, app-based arranging of freight movement. The first that pops into my mind is security.
Cargo theft is a rising problem in international shipping and often happens during the trucking portion of freight movement. Apps showing pick up and delivery needs of cargo could increase the opportunity of thieves to steal said cargo.
Creating effective security measures so anyone with a truck couldn’t just show up and take off with shippers’ cargo will be a challenge for this shift in trucking operations.
On the other hand, the benefits of app-based trucking could be utilized throughout the international shipping industry. With the increased density of shipping containers arriving at once in megaships contributing to congestion at ports, perhaps this kind of app-based trucking system implemented by ports could help in alleviating the problem.
Again, that would take a great deal of adapting. Are ports and the rest of the international shipping industry ready to adapt? Eventually, they will probably have no choice.
What are your thoughts on Uber-style trucking in international shipping? Share them in the comments section below.
Source: UC Blog