My brother-in-law (and next door neighbor) owns a logistics trucking company (that mostly ships for my father-in-law's hay company, which is the largest exporter in the US). My father-in-law is the largest exporter of anything out of Utah, and loads all of his trucks back up from the port, making him one of the largest importers. In short, they do a lot of business.
I talked with them at length about this exact idea, and they had me convinced that the Uber model doesn't necessarily make sense in this space.
First of all, there's no network effect or immediacy required (a la Uber). Basically you're just contracting out trucking companies, and there are a bunch of different ways you can already do that, even online. It's not a simple push-button order, and generally the ordering is done based on relationships.
So basically this company is putting that ordering process into an app. I'm not sure if there is a big enough of a differentiation to make a difference. But I wish them luck.
Yeah, that was my thought as well. Logistics companies have been operating computerized dispatch systems for decades: it just never made sense in the taxi business because prior to widespread smartphone adoption, the systems were too expensive relative to the amount of money a single taxi makes.
This might be attractive to small shippers, but yeah, anyone who does any volume of shipping by truck likely already has a computerized dispatch system that's probably integrated into their warehouse management software (so they don't even have to order the truck - the warehouse just does it for them when a shipment is entered into the system).
That is correct. The hard part of the logistics industry is getting the integration between warehouse, trucking and operations correct. I worked as a programmer in this space and most of the time and money in this space is not going towards apps and websites (most logistics companies have that or have easy ability to get those things up and running) but integration between interested parties.
Something something EDI something something kill me.
I too worked in that space. Super not fun. You're absolutely right that there is tons of money to be made by interconnecting interested parties with incompatible systems. It is a massive industry but yet still there is room for new competition.
I agree with you and above, nobody is going to replace their warehouse system's automatically generated requests with this Uber clone, they want deep integration and this doesn't get them closer to that.
Companies are already competing with this but not by copying Uber but by acting as a data intermediary making it easy to connect logistics companies with their end users. Data compatibility is the "hard problem" not connecting two companies together.
Having attempted to purchase truck-shipping online before, and found a morass of confusing interfaces with no current information but plenty of spamming over a year later, I think there is room for improvement here. We ended up hiring someone local whose name we got after about 14 phone calls, and who was much cheaper than anything listed online.
>> there's no network effect or immediacy required
If there's enough "shared trips"[1] , there's a network effect.And actually the lack of immediacy makes more shared trips combinations possible.That's on the customers side.
And on the drivers side - more drivers you'll get, more competition, but also more trucks that are spread through space and time - which would help in finding an optimal driver - with the shortest distance to the next job , and with the end point of that job closer to "home".
> It's not a simple push-button order
Why ?
[1]Or even close to share trips - drive from A to B , and from somewhere near-B to C .Also shared trips could be less-than-truckload and that's probably why they aim at small/medium business first.
Is he shipping his hay as break bulk or in 40ft standard containers? The intermodal market is very different from the bulk market and carriers are – by design – interchangeable. In fact many intermodal carriers scale by bringing several smaller mom and pop – referenced in the article – owner/operators under their dispatch. This is essentially what this startup is doing.
The not having immediacy part is not entirely correct. Line Haul departments of large carriers like FedEx Ground generally have a need to quickly find a truck when their trucks cannot make it from one hub to another. This occurs relatively common and there's an auction market for drivers.
Where, and who, does your father-in-law export hay to? It never occurred to me that it was something that flowed across borders in substantial amounts.
Oh, superb, thanks! Who would have thought that the UAE was a significant importer of hay from the US? That raises yet more questions.
A further random aside: i have no idea what alfalfa is. It seems to be a well-known plant in the US, but i don't think we have it in the UK. Sources tell me we call it 'lucerne', and we don't grow it. It seems we grow various beets and brassicas instead, plus maize and ryegrass. Perhaps because of the climate? Although perhaps just through absentmindedness:
I talked with them at length about this exact idea, and they had me convinced that the Uber model doesn't necessarily make sense in this space.
First of all, there's no network effect or immediacy required (a la Uber). Basically you're just contracting out trucking companies, and there are a bunch of different ways you can already do that, even online. It's not a simple push-button order, and generally the ordering is done based on relationships.
So basically this company is putting that ordering process into an app. I'm not sure if there is a big enough of a differentiation to make a difference. But I wish them luck.