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Posted June 20, 2018

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If You’re a Fleet Manager, There’s an App For That

Statistics show that as of the first quarter of 2018, there are over 6 million apps offered in combined inventory from Google Play, Apple, Amazon and Blackberry. The world’s population has access to an application applied to every industry and almost any challenge. We can play games, find directions, manage our finances and get a ride across town. There is an app solution for banking, shopping, fitness, entertainment and even fleet management and logistics.

In 2016, the global mobile internet user penetration has exceeded half the world’s population, while the average daily time spent accessing online content from a mobile device, such as a smartphone, a tablet computer or wearable, has reached 185 minutes daily among Millennials, 110 minutes for Generation X and 43 daily minutes for Boomers.

The growing popularity of mobile apps can be credited to the ease of use and affordability. They are also easier to develop, which accounts for the influx of options available for download. The Apple App Store estimates that a cumulative number of downloads in 2016 total around 140 billion, and with the market growing daily we can only assume that number has grown considerably with the trucking industry joining the trend. As we have discussed before, drivers are embracing the use of mobile in ways never before considered. With hundreds of apps offered they are gravitating toward apps that make their jobs easier like finding parking, weight station tasks, wayfinding and fuel locations. Fleet managers have access to mobile app that can help with everything from logistics, vendor payment and payroll. Trucking payment company EFS delivers on-the-go convenience with the ability to manage cards and funds remotely from any iPad, iPhone or Android device.

Trucking payment company EFS delivers on-the-go convenience with the ability to manage cards and funds remotely from any iPad, iPhone or Android device.

In a recent report, market research firm Frost & Sullivan outlined 70 apps widely used in trucking. It grouped them into three categories:

  1. Apps focused on the driver (truck stop locators, driving directions, social media, etc.)
  2. Apps that deal with freight (load matching and load boards, for instance)
  3. Apps focused on fleet needs (dispatching, tracking and tracing, etc.).

While task related apps are benefitting both fleet managers and drivers, there is also a shift in focus to a ride or load share app many in the industry are labeling “Uber for tucking” and as to be expected, Uber is hoping to lead the way. Last fall at the American Trucking Associations’s annual management conference, Uber’s Anthony Levandowski discussed his vision for the future in liquidity and automation.

Liquidity, he explained, is the ability to match carriers with shippers. If you’re delivering people, as Uber does via its ride-sharing app, why not food, why not packages, and why not freight, he asked.

— Anthony Levandowski

From Levandowski’s point of view, it might seem like a perfect fit, but in actuality it will be much more difficult to manage. Fleet managers who understand the challenges with maintaining regulations and compliances will be cautious about contracting this kind of freight matching service. Trusting a service outside of the industry could become a huge liability which fleet management and independent owners could not afford to take on.

Fleet managers who understand the challenges with maintaining regulations and compliances will be cautious about contracting this kind of freight matching service.

However, even though fleet managers within the industry are not ready to embrace the potential, investors seem to have their arms and pockets wide open. Armstrong and Associates reports that the segment has attracted over $180 million in venture capital funding since 2011. With this research, Armstrong looked at what was currently offered and categorized them as follows:

  1. Uber-like. Cutting out the middleman or broker, with GPS alerts, trace and track, and automated payments
  2. Load Board Plus. Mobile app extensions of existing load boards
  3. Broker Plus. Proprietary apps that brokers make available to their customers
  4. Specialty Apps. Focusing on specialized freight
  5. Last Mile. Used for e-commerce fulfillment and local delivery

It is clear that these Uber-like companies are here to disrupt the industry and are not afraid to capture new territory especially as private equity and venture capital is pouring in. Companies like Doft and Loadsmart are matching loads with carriers the same way that Uber matches passengers with taxis. In some cases, these companies are adding value to the existing carriers and companies. Loadsmart, for example, built a free fleet management platform that any company can use. They are also looking at data to analyze the business in order to target freight and relevant business.

“. . . we are going to push targeted business to them,” By analyzing how carriers use the service, they can streamline the process. “For the carriers on the platform, we have an idea of what they like [in terms of freight], and where they go. We are only sending them relevant business — loads they can actually pick up and want to pick up.”

— Diego Urrutia, Loadsmart, Chief Commercial Officer

To the investor and the start-up company it seems like a disruption, but fleet managers and others within the trucking and logistics industry say that this kind of technology is far from new or disruptive. Fleet managers and brokers have been using the same technology to match loads with drivers for years. Although there is a lot of money flowing into the industry, Richard “Dick” Metzler, Chief Marketing Officer of uShip, calls this period of investment the “fear of missing out” effect. With a career at traditional logistics companies and experience with FedEx Logistics and XPO Logistics, he suggests that the investment to these industry outsiders will be relatively short-lived.

In the meantime, Uber, the San Francisco ride-services leader, made their intentions to disrupt the trucking industry clear by offering a complete package of trucking technology that would include self-driving trucks and smartphone-based logistics services. But it is still nothing more than what the industry is already doing, and doing better with more experience and know how. Uber’s autonomous vehicle division, Otto has already been fraught with lawsuits and allegations of stolen trade secrets. A lawsuit filed by Waymo, the self-driving car division of Google’s parent company Alphabet, claims that Anthony Levandowski, a former Google engineer who founded Otto, was using the startup as a shell company in order to steal Google’s self-driving tech and pass it on to Uber. That case is currently set to go to trial. Consequently, Uber/Otto testing has slowed and focus has shifted. These issues along with other Uber related scandals having to do with the company’s internal culture, former CEO behavior and a recent board shakeup have interrupted the progress that Uber Freight was expected to have.

Fleet managers and brokers have been using the same technology to match loads with drivers for years.

The original intention for Uber Freight was to level the playing field for an industry dominated by white male drivers. Uber recognized the opportunity to address discrimination by offering a fair chance to women and an under-represented segment of black and Hispanic drivers. While the approach is a positive one and might seem easy, the function of the process is not. The feasibility of getting a return trip after having driven hundreds of miles is not nearly as guaranteed as it would be with the Uber ride sharing service. The freight hauling standards in the industry cannot be taken on that easily and some would say that they can never be matched. Additionally facing a driver shortage, the industry and fleet managers nationwide are already looking at the opportunity to attract drivers of all ethnicities, gender and backgrounds. They are not only addressing discrimination, they are attempting to overcome it with strategies in place that are proving to be successful.

What we are seeing is that although the outsiders might be disrupting the industry for the moment, their lack of experience and knowledge within the trucking and logistics arena is creating obstacles hindering their success. Some start-ups are turning to apps aimed at other areas within the trucking industry where they know they might be more successful. GPS enabled apps like FreightRover, a load matching app designed specifically to let leased owner-operators self-dispatch. The function is similar to what they are using now in the load board but it happens automatically without the necessity of a phone call on the part of the driver. The app relieves pressure from fleet managers and dispatch while improving driver performance.

Industry leaders like EFS are focusing on payment as a way to advance the trucking industry while leveraging the successful strategies that already exist. Profitability is the most important thing in any business, especially in the trucking industry. EFS is focusing on how to create efficiencies within the payment process while leveraging and learning from the date generated from the systems and tools that they have created.

With apps to help manage credit cards and expenses while eliminating paperwork and saving time, companies like EFS will bring much more of a service to the industry and to fleet managers than an Uber-like service ever could. With big picture perspective on payment and technology, the resulting power of their insights, will lead the industry forward with efficiencies, flexibility and growth.

 

 

Resources:

https://www.theverge.com/2017/5/18/15657798/uber-freight-truck-app-ios-android

https://www.joc.com/trucking-logistics/trucking-freight-brokers/will-uber-disrupt-or-improve-freight-brokerage_20171211.html

http://fortune.com/2017/06/15/uber-otto-trucking-waymo/

https://www.statista.com/statistics/276623/number-of-apps-available-in-leading-app-stores/

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