Uber Freight which was launched in May 2017 has somewhat changed the landscape of the transportation and logistics industry in general and the road freight industry in particular. Ever since its market appearance there have been lots of speculations about the effects of this app on small and mid-sized logistics companies. Moreover, in the last quarter of 2020 this company has considerably bolstered its presence in Europe. Is Uber Freight going to irrevocably alter the transportation and logistics industry of our times? Will it pose a significant challenge to the independent freight forwarders? Keep reading this post to find out the answers.
A bit about Uber Freight
At the moment, Uber Freight operates across 48 states in the USA plus in Germany and the Netherlands. Furthermore, they are gearing up to expand their services in Europe.
To begin with, let us be clear about the functions of the Uber Freight app. This smartphone application connects the trucking companies with freight forwarders and shippers. Simply put, this app allows for easy movement of ground freight by connecting logistics companies with the truckers. Before launching this app, Uber acquired a hauling firm called Otto for $650 million. The shipper has to type in information like the pick-up and destination, delivery date and time, shipment info etc. The app instantly gives them a number of quotes from several truckers. Now the shippers can book the freight with simply a tap on their mobile devices.
Therefore, Uber Freight is certainly a groundbreaking app that has the potential to change the road freight scenario. It was launched with the intention of providing the truckers with better control over their job. It allows the truckers to raise their profit margin by eliminating middlemen and unnecessary expenses.
The benefits of Uber Freight
Uber Freight is quickly changing the ground transportation scene by improving the overall productivity of the processes. This app ensures the proper utility of the trucks. Additionally, it has updated and simplified the entire process of booking and executing a road freight shipment.
More cost effective
One of the most important advantage of this app is the promotion of freight rate transparency. Trucking service providers usually need to gauge the market scenario and take into considerations several factors before quoting the freight rate. These factors include, volume of shipment, availability of driver, distance, weather, etc. Nevertheless, predictions like these are not accurate which is why a fixed rate for ground transport is not always profitable for the logistics companies. In other words, the advantage of Uber Freight is that it generates quotes based on real-time factors.
The quotations take into account all the relevant factors. Moreover, the quotes also expire very quickly. This is why, the shippers can avail of a rate that is reflective of the present market scenario. Additionally, no changes can be made in the rate after the booking of the shipment. So provided that all the entered details are entered correctly there is not the slightest chance of change in the freight rate.
Helps to save time
Time efficiency is always of crucial importance in the transportation and logistics industry. Uber Freight makes the booking process more time-effective, by allowing the shippers to spend minimum time on negotiating and dealing with the trucking companies. The most important benefit of this app is that it has modernized the road freight industry by making it faster and more customer-friendly. Booking a shipment with a few taps on the phone helps to save time that was otherwise spent on micromanaging several processes.
More technology oriented processes
Uber has considerable experience in developing cutting-edge technologies. These technologies come in the form of route planning, tracking, data processing, algorithm engineering and the creation of user-friendly apps. The creation of tech oriented processes are expected to attract a larger customer base. However, in terms of digitization there is a draw between the logistics multinationals and Uber Freight. On the other hand, it poses a significant challenge for independent freight Forwarders who still rely on manual processes.
Real-time location tracking
Real-time location tracking is an outcome of the digital investments of Uber Freight. It allows the shippers to check the exact location of their cargo in real-time on the admin panel of the app. In addition, it also permits the shippers to set the most convenient route, set speed limits, and track any violations on part of the trucker.
Are the independent freight forwarders facing a threat?
The rising popularity of this app in the US and now in Europe has brought to light a very pertinent question. Will the rise of Uber Freight threaten the business of small and mid-sized logistics companies? The answer to this question is a categorical NO. It is true that Uber Freight has somewhat changed the rules of the game but it will in no way disrupt the freight forwarding industry. In fact it will help the independent freight forwarders better organize their ground freight shipments and empower the truck drivers. Logistics companies will be able to handle even the smallest road freight shipments by directly contacting the truck operators.
Drawbacks of Uber Freight
Let us take one thing for granted- Uber Freight has and will continue to alter the modus operandi of the road freight service providers. Nevertheless, this app isn’t perfect and has several disadvantages. Perhaps the most important downside of this app is that prominent logistics companies are now entrusting their customer’s valuable shipments into the hands of an unknown trucker. Odds are that this truck driver who is in complete charge of your client’s shipment is not entirely professional or dependable. S/he may not have the experience or capability to move a tricky shipment from one place to another.
For this reason, independent freight forwarders need to reconsider before hiring the services of an unknown trucker from Uber Freight. You will not be able to check the background of the drivers, their experience, criminal records, license, condition of the vehicle, etc. Therefore, there is always a risk involved. Exactly for this reason joining one of the best logistics networks like Globalia and contacting trustworthy and vetted Globalia members is a much better option.
Tips for the transportation and logistics companies to counter the competition
Instead of hiring an unvetted trucker to move the valuable shipments of customers, freight forwarders should collaborate with trustworthy logistics partners for any road freight shipment. Globalia Logistics Network has some of the most dependable logistics companies in their cities as members. Most importantly, all of them had to pass a strict selection process to make it to this network.
Collaborating with some of the top freight forwarders who are part of one of the best logistics network is surely more advisable than partnering with an unknown driver whose credentials are not clear:
Expand your operations
In order to successfully compete with the corporate giants the first thing to do is to get an international presence. The best way to do this is to have a set of dependable logistics partners all over the world. Only one of the best freight forwarders networks like Globalia can provide you with this international coverage. No matter which part of the world you want to ship to, your Globalia partners will keep you covered.
Technological investments are imperative to survive in this industry. Logistics companies both small as well as multinationals are increasingly using TMS to optimize their everyday operations. The independent freight forwarders should create a digital strategy that will enhance their efficiency while boosting their customer experience at the same time. An app like Uber Freight is becoming popular by the day because it automates several operations and makes the shipment booking process simpler and faster. This is why the small and mid-sized companies should also start digitizing several aspects of their shipping process. This will allow you to offer client-friendly solutions that are on par with the multinationals.
Creating a digital strategy is crucial for independent freight forwarders to compete with the stalwarts in the industry. Digitizing your day-to-day operations will not necessarily take a toll on your resources. Becoming a Globalia member and using the member-exclusive tools we provide is the first step in this regard. Make use of the best freight quoting tool to effortlessly manage rates, and provide instant accurate quotations. FreightViewer allows for seamless online quote exchange, and helps you provide instant answers to your customers’ quote related queries. It is your best companion that will prepare you for coping with the challenges of industry 4.0.