Uber Freight is a new service from the “taxi“ service company that will pair shippers with transportation companies that haul shipments from origin to destination. Uber Freight goals when developing this application was to focus on drivers pain points. Some pain points discovered through requirement gathering were, a preference to work directly with shippers (no brokers! :)), little to no negotiation in arranging transportation and the payment speed. With that out of way let dive deep into the impact on shippers and logistics companies.
Uber Freight: Trusting Carriers?
In the transportation industry, 68.5% of the freight that is moved from point A to point B is brokered. Brokers play a vital role for shippers by ensuring that the transportation company is fully licensed and insured by the FMCSA. There have been countless stories of transportation companies forging information. Other stories include insurances has expired or worst the transportation company moving your commodity has had multiple accidents not even reported to the shipper. So how can an application that only matches loads with carriers insure your shipments are matched with reputable carriers?
Shippers and Negotiating factors
Negotiation plays a big role in how brokers, shippers and transportation companies interact. There are guidelines implemented based on requirements of the shipment but relationships still play a part in negotiating excellent rates for your shipments.
Imagine a scenario where a standard load from Atlanta, GA to Greenville, NC is going for $2.10 a mile leaving on the 08/15/2017. Your boss calls you and says you need to expedite the shipment! Do you think you’ll be able to get a good rate attempting to match an expedited shipment with you Uber Freight application?
Having an establish relationship with your broker becomes beneficial because he or she will be able to crunch numbers and talk with the carriers to move an expedited load for the same amount if not a tad more. In any sense, this tactic may potentially beat the charges you see for matching an expedited shipment using Uber Freight application.
Carriers Payment Speed
I do think that Uber Freight may be on to something with the payment speed to the carriers. I agree that the carriers should not wait more than 30 days for payment from the broker they worked with. Establish brokers will usually offer quick pay through their bank account or a reputable factoring company once the carriers provide evidence of delivery.
Shippers, with your focus on the operations side of things there will be little to no time to actually do the research concluding the carriers hauling your important freight are correctly licensed and insured. If you have confidence to place the shipment of your commodity by matching carriers on an application I can assure you issues will arise. All in all, I do not that the implementation of Uber Freight will have a huge impact on 3rd party logistics companies! Tell me what you think below!