Disruptors. That’s the current buzzword and technology driven giants Uber and Amazon are now about to disrupt the freight industry. Or parts of it at least. Traditional brokers beware, they want your pie.
Uber Freight, soft launched in the US last year and competing rival Amazon want to connect businesses that ship things with truckers willing to drive them.
Uber, with their billions dollar investors and their recent acquisition of self-driving trucking firm Otto could be ushering in the future. Amazon CEO, Jezz Bezos also has billions and has other ideas, although very similar intentions.
Some brokers take large percentages of a manufacturers distribution fee in exchange for matching up the haulage. Uber and Amazon are looking to cut out the broker fees and make handling shipments easier.
So what’s the difference between them?
Well Uber is a platform which looks to make its money from transactions it helps facilitate. The controversial practice of surge pricing (raising fees at peak times) could make it difficult for companies to budget though.
Amazon seems to be developing mobile technology so it can schedule and track shipments of its products and then build an application capable of matching available trucks to shipments. The companies next step would be to make this technology available for a fee to non-Amazon shippers as an easy to use option for business to business freight shipping. Whether this is a simple replication of what’s already out there we will have to wait and see. What you can be sure is that these two will throw huge sums of money at it.
What isn’t known yet is whether customers will adopt this more clinical way of arranging their transport. We should also consider the future of autonomy, both in brokerage and more importantly trucking itself. This is a conversation for another day though.
We think these concepts will work for some companies just like traditional freight exchanges, where spot work for less time-critical cargo can be bid for by a myriad of carriers which are active in the price driven arena.
And then there are companies which require a very close working relationship with a complete understanding of their business and absolute delivery certainty. These companies have very busy people and supremely high expectations so it’s probable the Amazon and Uber models are not for them.
It’s fair to say that we expect the next few years will see a shake up in the freight industry and we should all prepare to embrace the changes.
Uber Freight launches some time in 2017 with the secretive Amazon possibly not far behind.
We’ll keep you posted
The Jordon Team