As the trucking industry comprises a large number of players who own small fleet of trucks, it is common to see many still using manual methods or multiple systems to manage freight.
The legacy Transportation Management Systems (TMS) allow no scope for measuring service or performance. The systems are not flexible and offer little or no visibility on availability and whereabouts of trucks, essential for end-to-end supply chain management. With limited information and no effective commercial or professional procedures, companies struggle to improve services and reduce transportation costs.
The Uber Effect
Some companies from the logistics and tech space have already entered the aggregator business with Uber-like apps and services; many more are poised to jump in.
Working on the lines of the Uber app–which allows anyone with a smartphone to find a means of transportation with a few clicks–the trucking industry is trying to replicate for freight movement what’s worked so well for ride-sharing.
The key aim is on-demand trucking that will bring convenience, automation, and price transparency to shippers, as Uber has done to taxi services.
Is Uberization just hype?
At a time when shippers and customers expect greater visibility and transport control over their supply chains, the Uber concept in the trucking industry definitely brings transparency to the market.
The apps available help shippers see availability of trucks and book directly with a click instead of through an agent. The services monitor movements through GPS and update shippers on the exact arrival times, eliminating paperwork and phone calls. There is transparency in pricing and, with middlemen out of the picture, services are priced competitively.
The ability to move freight long distances quickly, safely, and inexpensively is the key differentiator for Uber-like apps for the trucking industry. Still there are many potential challenges along the way – customers may be lost if a trucker doesn’t show up to pick up the cargo or if the goods are not shipped quickly and in time. Then there is the issue of trust as there is huge cost involved in transporting freight.
The question is whether an Uber-like standard application can work in an industry based on close business relationships, like the long-haul freight transport industry. Whether Uberization is the next big thing or just hype will depend on the ability of service providers to address the issues of quick, safe and inexpensive freight transport with complete transparency.