Thursday 29th Sep 2016 - Logistics Manager

Uber trucking model – a new era says analysis

The arrival of Uber for trucking or mobile-based freight brokering is ushering in a new era in the North American trucking and freight logistics market, according to a new report by Frost & Sullivan.

The report, Uber for Trucks: Executive Analysis of the North American Mobile-based Freight Brokerage Market, has found that 16 per cent of third-party logistics will be enabled through mobile platforms by 2025.

Currently, inefficiency plagues the freight movement and logistics market, with around 20bn empty miles travelled per year in the North American trucking industry. It is expected that mobile-based freight brokering will enable drivers and fleets to mitigate these inefficiencies in their trucking operations. In addition to reducing the empty miles travelled, mobile-based freight brokering technology will help lower operating costs, improve fuel efficiency, boost asset utilisation, and enhance resource productivity.

“For the North American trucking industry, mobile-based freight brokering provides the opportunity to enhance the productivity and efficiency of both shippers and carriers,” said Frost & Sullivan Automotive & Transportation Senior Industry Analyst Wallace Lau. “Mobile-based platforms also have the potential to minimise the carbon footprint through improved freight logistics and reduce driver-shortage strain on the trucking industry.”

Despite these benefits, traditional freight brokers in North America presently command 99 per cent of the market as they have already built a strong reputation and relationships with existing fleets. This, along with the saturation of competing freight brokerages, rise of on-demand delivery services, and lack of a vast shipper and carrier network, is proving to be the biggest hurdle to the mass adoption of mobile-based freight brokering. 

Mobile-based freight brokers are strategising to grow their network by offering as much value as possible for free to customers on their apps. In addition to strengthening their freight brokering capabilities, mobile-based freight brokers are bundling transportation management solutions together to attract customers.

“Early demonstration of the tangible benefits achievable through on-road implementation of mobile-base freight brokering solutions will definitely be worthwhile,” added Lau. “Strategic partnerships with market participants such as truck original equipment manufacturers and telematics providers will also be helpful to enhance the performance attributes and audience-reach of mobile-based freight brokering solutions in North America.”

The arrival of "Uber for Trucking" is ushering in a new era in the NA Trucking & Freight Logistics Market, finds Frost & Sullivan. (PRNewsFoto/Frost & Sullivan)

The arrival of “Uber for Trucking” is ushering in a new era in the NA Trucking & Freight Logistics Market, finds Frost & Sullivan. (PRNewsFoto/Frost & Sullivan)