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Guest Post: The Uberization of Trucking

December 6, 2014

roseanneOur Guest post today comes from Roseanne Stanzione, who is CEO of LaneHoney, the Marketplace for Trucks On Demand

Uber’s taxi service is cool, right? Moving dots on a map tell you the location of the nearest taxi. Hop in and off you go, without handling cash.  And now venture investors have placed bets that the $60 billion truck brokerage industry of agents and phones can be disrupted with applications like Uber.

So what is the Uber magic anyway? Three things: 1) set up, 2) transact, 3) done. Uber is first and foremost a logistics application, one that eliminates transaction friction and makes better use of assets. The current truck shortage is the biggest real-time asset problem in America needing a smart, uncluttered answer. The current state of industry technology? Unfilterable bulletin boards, incomprehensible transportation management software that requires training to use, no price information and everyone drowning in paper.  It is no wonder 30% of backhauls go empty.

Set-Up is about simplifiying and automating the complexity of a transaction and placing it behind the scenes so that the transaction is front and center. To do that you need great data and handling, standard processes and documents, and of course, real time location. Transact is the real Uber magic. It’s genius Uber Experience (UX) that places the complex stuff behind the scenes and makes it effortless for users to oft in and hit “go.” UX will be a brand new competency required of logistics professionals to compete going forward. Done is realtime location that means trace for mobile dispatch, time-stamped delivery and accrued detention, putting “fuel surcharges” (a catch-all for additional brokerage charges) on death notice.  Better visiblilty means actionable data for enterprises, better margins, shorter miles, and the chance to be home for dinner.

Once all this Uber magic is in place, hard to do by the way, carriers get more offers, shippers get faster, cheaper shipments. That broker taking the most out of a transaction with an unknown spread fee becomes a relic.

 

 

 

 

 

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One Comment leave one →
  1. December 6, 2014 11:37 pm

    Those of us engaged in OM find the Uber story fascinating. As a competitor for the traditional Taxi service, Uber may prove to be another enhancement in efficiency. Given the fees charged to cover overhead (insurance, the vetting of both vehicles and drivers, software development and maintenance centralized billing, etc.) improved efficiency may not be immediately obvious. Additionally, Uber is trying to charge less than traditional Taxis.
    Ignoring the marketing issues and customer safety, where are the potential efficiencies? First, some drivers (maybe most) may not require a wage that equals those fully engaged in the ‘Taxi’ business. It truly could be a supplemental income…. ‘I’m going that way anyhow so let’s make a few dollars while on the way.’ Similarly, the capital investment cost approaches zero as the car is going that way anyhow.
    This suggest that from a society perspective, Uber and it’s like competitors are very desirable by utilizing idle or wasted labor and capital resources. At the same time Uber is reducing traffic and auto pollution and speeding up the transport of individuals and local commerce.
    Roseanne is suggesting that similar enhancements can be facilitated by applying the Uber concept to the trucking industry. Even with 30% of the backhauls empty, the number of independent truckers or truckers with the latitude to alter their route must be a very small, and a faction of independent automobile drivers. Utilizing that idle 30%, if it can be done, is a huge benefit to society. We will see.

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