Even in developed economies this industry is still greatly fragmented with small trucking carriers connecting via intermediaries with shippers through basic modes like phone calls. The intermediaries can also take up nearly 45 percent margin from a transaction which not only reduces the returns for the trucker but greatly inflates the overall transportation cost and the cost of the goods for the retailer. Also the industry has to spend on average $16 billion per year to move empty trucks without cargo, which accounts for 15 percent of all operational costs. Cost is also incurred in truck waiting times while it is waiting for a load to be arranged.
So how does the trucking trade catch up with the on demand economy - through Uberization
Several apps have been or are being launched to link truckers with shippers and vice versa. These apps usually have the following capabilities
- Algorithm driven engines that match transportation needs and pricing
- API map integration
- Real-time location tracking GPS based
- Configurable Notifications alerts
- Targeted freight sharing
- Flexibility in booking loads
- Electronic proof of Delivery,
- Support for billing and payments.
- Freight tendering
- Freight schedule management
- Integrated billing and payments
- Mobile transactions
- Trip planning
- Digital document storage
- TMS integration
The apps are shaping up to be as disruptive to the trucking industry as Uber was for the taxi business.
- Cargomatic, launched in 2014 has since expanded from LA to NY area
- Convoy, launched in 2015.
- GoShare
- Transfix
- Cargo Chief
- Keychain and several more in the pipeline
Increasing the overall efficiency in freight transport also has environmental benefits by reducing traffic congestion, reducing overall vehicle exhaust emissions and the less the # of trucks on the road lower is the risk of automotive accidents.
Though Logistics is not as simple as hailing a cab for personal travel. There are multiple aspects which add to the complexity. Some of them are
- Specialized equipment types: which has to be matched with the vehicle as per cargo
- Multi mode shipments: tracking the shipments across truck, train, ship, air
- Necessary exception handling for situations like equipment breakdowns
- Specialised handling of high-value goods
- Insurance and Liabilities handling
- National and state level regulations
- Relationship management
- Integration with a complex application landscap
- Regulations: which keep on evolving for the sharing economy
- Disruptive innovations like self-driving vehicles and drones
Check out way in which Cargomatic unlocks transportation capacity which is un utilized
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