Is an “Uber-like” Technology Likely to Disrupt the Transportation Industry?

Uber has certainly disrupted the taxi industry.  eBay and Alibaba, and Amzon have certainly disrupted the on line retail business and sites like Airbnb have certainly disrupted the room for rent industries.  The question I often hear is that will an industry “disruptor” emerge offering some sort of online shipper-driver matching service that completely changes the whole industry?  I think not!

Here are many reasons why I think it will be unlikely that an “Uber-Like” web application will change the trucking industry:

They already exist!

There are a lot of load matching services out there.  Many are free, some are pay for service and if anybody has watched “Shipping Wars”  on TV it’s pretty obvious that the technology already exists to get truck drivers bidding against each other for freight.  While there is a market for this type of shipment, it’s not really changing the whole industry.  It’s mainly small or one time shippers getting bids from freelance truckers.  It’s too much hassle for a regular shipper to bid out each and every shipment and qualify each and every freelance trucker.  It’s just not going to happen.  Plus, regular shippers are generally looking for a trucking or logistics “service” as opposed to just a single shipment.

A Driver is Not Alone

Unlike the comparison to a taxi driver at Uber, a truck driver is rarely a lone wolf.  He’s supported by a dispatch department that helps him coordinate pick-ups and deliveries so that he can do what he’s paid for….to drive.  A driver is also supported by a maintenance department, a safety and training department, not to mention the financial strength of an entire company to fund his endeavors.  Plus, there are customs experts to help him get his paperwork right and off to the border.

Safety is a Huge Issue

While a fender bender in an automobile is still a terrible thing, any minor accident by a truck can result in serious consequences.  Not only does the size and speed of a truck come into play, but the cargo it’s carrying could be dangerous or environmentally hazardous if spilled.  The risk is just too great for any responsible company to bid out shipment by shipment to anyone who will take it for the lowest price.  There is huge corporate liability here.  Any company serious about doing their due diligence in carrier selection will want to do business with a carrier who is providing a transportation service rather than an individual driver.

Supply and Demand

Anyone who’s ever tried to get a shipment on a truck knows that sometimes it’s easy and other times, it’s near impossible!  Different areas of the country and different laneways experience different levels of supply and demand all year long.  The only leverage you have during peak seasons is the regular freight and business relationship that you have with trucking companies to find a way to get a truck to your pick up with capacity to move it.   If you were to rely solely on the open market and a bidding system, with one off loads, your costs and service would go haywire with the ups and downs of the seasonal markets.  It just wouldn’t be a viable year round transportation plan that would work.

Capital Investment

Unlike Uber where pretty much anyone has a car and a driver’s license, tucking is a very capital intensive industry.  A single truck and trailer could cost hundreds of thousands of dollars, not to mention the required training and investment in driver training that is required.  An Uber-like trucking service is going to have difficulty attracting drivers willing to invest in their own equipment  in an industry that’s already short on drivers.  Plus, where the goal is to get drivers to bid against each other to lower the cost, it’s unlikely that the industry would attract new drivers to meet the demand of the industry.

About XTL Transport

XTL with their strong team of experience drivers, logistics personnel and first class, fleet have been providing a remarkable transportation service for over 30 years, and we will continue to do so!  If you would like a free transportation review of your current transportation plan; contact XTL today for a free consultation and transportation review.