Uber Freight Will Not Kill The Trucking & Logistics IndustriesWritten by Neal Willis
The recent launch of Uber Freight is being perceived by some in the trucking and logistics industries as a threat to their business and maybe even their very existence, but contrary to what some shippers believe, Uber Freight is not an immediate nor necessarily an imminent threat to the trucking industry at this time. Sure, they’ll probably gain some initial traction and capture some market share from a few companies, however, there are multiple issues that will prohibit it from becoming the giant some think it will be in the near future.
It’s taken years for trucking companies to refine their operations and business processes, and it is very unlikely that Uber Freight can come into the industry and sweep the rug out from under everyone. Freight and shipping is heavily reliant on relationships that have taken years to develop. Shippers prefer working with companies that know their operations and those they can count on when it’s crunch time. The original Uber model gave rise to numerous drivers ranging in diversity. If Uber Freight is anything like the original Uber, it will take a long time to weed out the good from the bad and the experienced from the inexperienced. During this weeding out process, shippers will get burned by a few Uber shipments and will return to their legacy carrier providers because Uber Freight will have cost them not only more money, but the loss of business and customers as a result of poor and less than acceptable service due to lack of experience and/or equipment.
Shippers want dependability, and without a proven track record and history with a shipper, there’s no trustworthy method for them to tell if the company they’ve chosen through Uber is reliable and/or dependable in any way, especially for carriers in the original launch who try to cross the barrier between the TL and LTL markets because of available space. Sure, feedback is a great way for product and service review, but what if that feedback comes from a competitor in the same market wishing to sabotage competition with false feedback? The TL and LTL markets may be similar, but they are also vastly different in many ways. Other questions and problems are seemingly posed with insurance requirements and equipment needs. Some shippers have to be covered with certain insurance standards, and without documents proving coverage, they won’t be able to utilize certain carriers.
Especially for shippers that might be marking up the freight charges a little to their customers, how will Uber integrate freight rates into shippers’ ecommerce platforms for them to display reliable freight rates to their online customers at checkout? Seemingly, if a customer takes a little time to decide on whether or not to make a purchase after getting an online quote for an item, which includes the freight cost, how can they be guaranteed that the freight rate they were quoted will remain valid should they decide at a later time to purchase the item(s)? What about transit times? How will those be conveyed to potential customers online if the carrier is constantly changing? It seems that the launch of Uber Freight raises more questions than it does providing solutions to shippers’ problems, at least for now.