by Lindsey Graves, Vice President – Operations
Uber and similar “access economy” apps are entering the consumer market at record speed and show no signs of stopping. While they are being widely received in the consumer space, there’s been a growing rumble in the transportation industry on the potential to cross into the commercial supply chain market.
It may seem scary for a transportation brokerage to think of an app potentially automating their role into extinction. As a 2nd generation 3PL owner, I know I was until I dove a little deeper into the conversation. On the contrary, whether you’re a shipper, trucking company or any size third party logistics company (3PL), there are three reasons why tools that replicate Uber’s “access economy” model in the commercial space would benefit the supply chain process.
A qualification process for trucks
Anyone trying to keep up with the recent government FAST Act (an attempt to help make our roads safer) knows that the legislation is a moving target. Regulations are changing daily it seems and there’s no clear standard for how to properly qualify a truck. For that reason alone, an Uber-type app for logistics that would provide a scoring and rating mechanism for each experience would be a benefit.
A shipper who would like to work with an asset can immediately access history on a specific truck (not just the company). This is more information than currently exists from the FMCSA, which has flip-flopped its stance on published CSA scores.
Additional tools for sourcing capacity
Today’s tools for connecting available trucks to loads have evolved greatly in the past several years. One tool, commonly referred to as a “load board”, has been a standard resource for 3PLs, carriers, and shippers where they can post their trucks or loads to a wide audience in hopes of securing their shipment for the right price and location.
Like load boards, an Uber-like app provides another helpful tool for sourcing trucks. It remains up to the shipper to determine whether the time, money and resources to work with the tool is worth the investment. A shipper will benefit from an “access economy” app because it’s another method for their transportation department or 3PL to source a truck, increasing the pool of availability at a reasonable cost. It’s a win-win for anyone shipping their products over the road.
More trucks and drivers on the road
More than one million companies with trucks on the road operate with less than three assets (trucks). Many times the owner is also a driver, meaning they spend less time managing and growing their business, less time training the next generation, and more time on the road. If there are tools that can make it easier for a truck to find a load, process the paperwork, and get paid, these apps are helping to grow their fleet which ultimately puts more trucks and drivers on the road – something the trucking industry needs!
The shortage of qualified drivers is a legitimate problem.
It’s in a shipper’s best interest to have more trucks on the road; the load-to-truck ratio is a sensitive, real-time indicator of the balance between spot market demand and capacity. The more trucks on the road equals more control a shipper has over its market. While capacity of trucks has improved tremendously since 2014, the published average age of a driver is 44 and it’s a reality that we will be losing a major portion of the work force over the next decade.
The responsibility falls on the transportation industry to keep more trucks moving across the U.S. If Uber-like apps can help that process by providing an easier barrier to entry to the trucking market, as well as technology that may appeal to younger drivers, we should be cheering for their success and looking for ways to capitalize on the recent advancements of the industry who moves America forward.
For 3PL’s that see an access economy platform like Uber as a threat to our very existence, it’s important to think of the fundamentals of our business. A 3PL provides a service that keeps the shipper focused on the business at hand, while letting an expert take the wheel when it comes to its transportation needs. Keep in mind — just because a shipper may have easier access to find trucks and qualify them, doesn’t mean they will want to handle this piece of their business. They’re not concerned about controlling each shipment. They want that responsibility and liability taken care of for them.
Smart shippers want bigger solutions.
Carriers and shippers are most efficient when they have consistency in their supply chain; it’s accomplished through putting people, processes, smart technology and continuous improvement in place. Sunset Transportation, for example, has a robust technology platform that aggregates driver and company data over time (and has been, for the past 25 years) and creates a propriety scorecard that allows us to make decisions based off of sound data, versus the unreliable FMCSA scores. Smart 3PLs will look at new technology as an opportunity to better serve our customers, not as a threat to our success.