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27
Nov
2017
Uber Water Shipment Shows Trucking's Load-Matching Future

Uber Water Shipment Shows Trucking's Load-Matching Future

27 Nov 2017

Once the Hurricane Harvey dissipated, Niagara Bottling rushed to get bottled drinking water from nearby plants in Texas to those in need. “Everything that could be challenging was challenging,” said Brian Reed, at that time Niagara’s vice president of transportation and customer service. On Friday, Sept. 1, Niagara was ready to send 127 truckloads with 4.8 million bottles of water into Houston. The problem was finding the capacity to haul those loads on what was a late Friday afternoon in Texas, in the wake of a hurricane, and the start of the Labor Day weekend.

“We’re a 24/7 shipper, but when it comes to getting capacity on Fridays, after the hours of 5 p.m. Central Time, or 3 p.m. Pacific Time, things get very quiet,” Reed said (Niagara is based in Ontario, California, in the “Inland Empire” east of Los Angeles). “We have great logistics providers, but the number of people who can book new trucks for us gets smaller” at that hour. “Saturday morning is another open time but by noon, that capacity is gone,” he said.

The problem was compounded by a tight trucking market. This fall, capacity in general is harder to find and comes at a premium price compared with 2016. In early September, hurricanes Harvey and Irma combined with the start of the peak trucking season and a healthier economy to absorb excess capacity and push spot market truckload rates upward by double digits.

That Friday, Niagara found itself “near that window and time of day when our normal capacity starts to disappear,” Reed said. Despite that, the bottler managed to quickly ship all 127 truckloads by turning to one of its newest logistics partners, mobile app-based marketplace Uber Freight. The loads were booked within hours by the small trucking companies and independent truck drivers at the core of the Uber Freight network, launched in April.

At Uber, that feat is seen as a proof-of-concept moment, one that should reduce or put an end to skepticism about its potential in the freight brokerage market. “Seeing those loads clear off the board in minutes was something magical,” Bill Driegert, director of Uber Freight, said. “What we saw during Hurricane Harvey particularly was a situation where our platform showed its value in being able to scale and take on additional volumes at a challenging time for many operators. It was the first time we saw the potential of what this could become.”

The incident also underscores the increasing importance of technology in the logistics and freight brokerage industry, and should impel competitors, including established logistics companies, to double down on the development of digital tools that help speed up shipper-carrier transactions and increase the ease and lower the cost of finding, booking, and shipping freight.

Source: JOC


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