Uber: The Newest Entry on Your Carrier Scorecard

A few weeks ago on Talking Logistics, I spoke with Frank McGuigan, President and Chief Operating Officer at Transplace, about a variety of transportation trends, including the emergence of Uber as a logistics service provider. Uber officially launched UberFreight right after Christmas last year, but there still isn’t much information on the homepage, other than its creative tagline with its double meaning: “We’re in for the long haul.”

What impact is Uber having on the logistics market? Well, according to McGuigan, we’ll know more in the weeks and months ahead.

“We will see Uber with our shippers this year,” McGuigan said. “They have worked to get into our routing guides, so we’ll be able to see their performance this year and we’re excited about it. While the concepts of automated brokerage and reducing system miles aren’t new, anything that brings value to the shipping community we are all for, and if there’s innovation [in what Uber is doing] that will drive value, we look forward to learning more about it. There’s been [a lot of discussion about Uber]; we will actually see their performance this year.”

The freight transportation industry, however, is very different than the taxi industry, as McGuigan pointed out:

“Everybody gets excited by the term Uber because of the positive experience people have had hailing transportation in New York City or any other major metropolitan area and the impact Uber has had from a cost and capacity standpoint in that particular industry. To my knowledge, Uber is not really adding [trucking] capacity right now, but we think there is value grinding out the waste in the system. But to make that work, a tremendous amount of collaboration is required between the shipping community and the highly-fragmented carrier community. Again, we’re excited by the potential innovation there and we look forward to hopefully being a party to delivering some of that innovation to our shippers in the years to come.”

My thoughts on Uber? As I’ve said before, it takes a lot more than a mobile app to succeed in the freight transportation industry, but because of its resources and brand strength, you have to take Uber seriously. But as McGuigan alluded to, Uber’s success or failure will ultimately depend on whether shippers and carriers take them seriously too, and whether they provide a better value proposition than the status quo. With some shippers already including Uber in their routing guides and carrier scorecards, we’ll find out soon enough.

I encourage you to watch the rest of my conversation with Frank for additional insights and perspectives on other trends to keep an eye on this year, including driverless trucks, what’s happening with capacity, and transportation management systems (for the latter, watch the short clip below).