Apps that are uberising the supply chain

 

Uber’s original smartphone app revolutionized the way people travel thanks to its transparent features. Launched in 2011, its success has inspired companies to borrow from its convenient functionality. Not surprisingly, the logistics field could benefit from a specialized app with similar features, according to The Startup.

“The need for an app which integrates the logistics industry with the on-demand business model and technological advancements of Uber is high. Indeed, logistic app development is a niche field for a relatively new market, prime for investment. These mobile apps make transportation and delivery services easier by simplifying work costs, and gradually improving sales whilst outsourcing the cost and expense of running a logistics business.”1

An uberised logistics app makes sense since “Drivers, truckers, and carriers move up to 80% of the total freight in the US, with the logistics industry’s gross revenue exceeding $700 billion, and yet, local industries are hindered by the inefficient business model whereby the repositioning of empty containers costs nearly the same as moving a full one.”1

Many logistics apps already exist. Here are a few that are uberising the supply chain. 

CARGOMATIC

Shippers often struggle to find and track carriers when they need cargo delivered. Poor communication delays deliveries and confirmation of their completion tend to be unreliable or non-existent. Fortunately, the Cargomatic app2 offers shippers and carriers more autonomy in their roles with uberised features. The app, coined as the “Uber for truckers,”2 allows shippers to connect with nearby carriers.

First, a shipper makes a request via the Cargomatic app. Next, a carrier accepts the shipper’s request. The app’s map offers transparency as it shares the status and location of the shipper’s freight. Once the delivery is complete, the shipper is notified. Soon after, the carrier is paid by the app’s automated payment system. 

Despite its convenience, the Cargomatic app’s functionality has been challenged by the logistics industry’s changing landscape. According to competitor Ricardo Salgado, “The industry is changing rapidly because of new technology, but the adoption curve is slow.”3

UBER FREIGHT 

Uber’s overhaul of the traditional taxi system inspired the company to create its logistics app called Uber Freight. It was designed with the goal of “…reinventing the logistics of the transportation industry by eliminating the middleman broker.”1

It’s not surprising that Uber Freight borrows many of its features and concepts from the original Uber app. However, this is a problem since freight haulers and regular cars serve very different roles. Not only do they operate within different industries, but freight presents several complexities that many of Uber’s original features cannot accommodate. According to transportation expert, Kevin Haugh, “Uber Freight is actually fairly rudimentary. There is not a lot of intelligence beyond a truck’s location and the characteristics of the vehicle.”4 Ultimately, “The core problem Uber faces is that many shippers, and virtually all the larger ones, don’t want to do business with just any carrier.”

Not only this, but “Large carriers want to do business with a closed network of trusted carriers. A trusted carrier may have more than the legal minimum insurance, drivers with sterling safety records, and expertise in special areas – like HazMat or refrigerated shipping – and can be counted on to deliver reliably.”4

HUOCHEBANG

Huouchebang is a popular trucking app that’s used in China. Although some of its features are inspired from Uber’s, it’s learned from Uber Freights and Cargomatic’s challenges. The app caters to truck drivers; beyond matching them with shippers, they waste less time between shipments and save more fuel.5

The Huochebang app is user-friendly, just like the original Uber app. But unlike the Uber and Uber Freight apps, it can accommodate the complexities of large carriers while building trust at the same time. For example, “Huochebang utilizes big data to match shippers and truckers in real time to solve [a] mismatch.”1 The app works in the best interest of truckers by helping them find a new shipper after a completed shipment. Given this, they aren’t forced to immediately travel back to their base with zero cargo. This makes it easier for the trucker to increase their earnings.5

These apps are Uberising the supply chain, regardless of their challenges. Entrepreneurs and companies can learn from past oversights by accepting that innovation isn’t derived from replication. Even Uber Freight underestimated the complexities of freight by relying on its original features and underestimating logistical challenges. Uberised features are salient in the creation of logistics apps. But in order for them to succeed, companies must hire experts to educate designers about the logistical problems that the app itself claims to solve.  

Cited works

  1. @dmytrobrovkin. “How to Create Uber for Logistics.” Medium. November 30, 2017. Accessed July 28, 2019. https://medium.com/swlh/how-to-create-uber-for-logistics-a987f9b6b72.
  2. “Local Trucking.” Cargomatic. Accessed July 14, 2019.  https://www.cargomatic.com/.
  3. O’Reilly, Lara. “How ‘Uber for Truckers’ Cargomatic Burned through $15 Million as It Quietly Pivoted Away from Being a Tech Company at All.” Business Insider. September 04, 2016. Accessed July 20, 2019. https://www.businessinsider.com/cargomatic-uber-for-truckers-history-founders-investors-2016-8.
  4. Banker, Steve. “Is Uber Freight On The Verge Of Going Out Of Business?” Forbes. April 12, 2018. Accessed August 01, 2019. https://www.forbes.com/sites/stevebanker/2018/04/10/is-uber-freight-on-the-verge-of-going-out-of-business/#573053e1461f.
  5. “Uber-like Freight Service Steps up AI Investment.” Uber-like Freight Service Steps up AI Investment – Chinadaily.com.cn. Accessed August 01, 2019. http://www.chinadaily.com.cn/a/201801/16/WS5a5d482da3102c394518f69f.html.

 

 

2019-08-21T08:54:16+00:00August 13th, 2019|