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Current Trucking Market
Uber, a taxi hailing application, over the years of its operations has not only topped the on-demand taxi business but has also become a trailblazer for the on-demand applications. Inspired by Uber’s business model which is perfectly amalgamated with cutting-edge tech, entrepreneurs and large-scale businesses have started to invest into this model for different industries. A major industry that has accepted the Uber for X concept is the Uber for Trucks/ Uber for Movers market.
Currently, most market players such as Uber freight, Cargomatic, Doft, Goshare, Convoy and Lugg tend to be very small in comparison to domestic transportation management leaders C.H.Robinson, Hub Group, XPO Logistics, Coyote Logistics, and TQL—each of which has over $2 billion in revenue in the $62 billion domestic transportation management market segment.
However, according to ATA Freight Transportation Forecast 2017, an estimated 2.3% growth rate with regards to freight volumes in 2017 was seen and upto a 3.4% annual growth rate till 2023 is expected.The report further emphasizes that scalability will be a problem in this industry for the players working on the conventional offline trucking model.
To outline some of the other major problems currently faced offline:-
- Drivers drive empty trucks to pick up loads they get paid for only half their journey.
- Furthermore, drivers never know clearly when they would get their earnings. It could be within a week or a month, basically, varies for each trip or the broker-driver engagement.
- Many companies still rely on physical documentation for their logistics(also, largely managed by the brokers), costing valuable time and money.
- Efficient load utilization for each truck type.
- Efficient fleet utilization and management for the Operators or Trucking companies.
Uber for trucks – Business & Market potential
Wondering about the market potential for the trucking industry? It’s Big. 800 billion USD is what the transportation industry in the USA was last valued at, of which gross freight revenue from primary shipments exceeded 726 billion USD.
Not only in the US, in China the Uber for Trucks market has picked up well and is gaining some decent traction, both from the investors and the end users. Currently, Huochebang and Yunmanman, the two largest technology players in the Chinese trucking market are together estimated at 5 trillion yuan ($753 billion).
In an article written by Jeff Burman –
Evan Armstrong, President of third-party logistics provider (3PL) analyst firm Armstrong & Associates, mentions
“Digital freight matching apps have tallied approximately $300 million in venture capital and private equity funding. Investors seem to buy the pitch that these companies are truly unique and will disrupt the transportation marketplace like Uber has with its ride-hailing app.”
It is clear from the above that Uber for trucks and associate app business models are the clear future for the trucking industry.Truck drivers and shippers through this model, are immediately connected with each other saving time and money.Furthermore, drivers can view their earnings reports, app commissions, individual ratings and so on from the app itself.