Uber of Trucking vs Tinder of Trucking

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In his latest blog post at Talking Logistics Adrian Gonzales raises an interesting point: Are Today’s Transportation Tech Startups the Uber of Trucking or the Tinder of Trucking?

I agree that moving freight is much more complex than moving people and that the freight industry will not be disrupted by an app only. It is a much more complex industry than people generally imagine. However, based on the three musts for start-ups to succeed, we have to consider the following:

  • Critical mass: once a new startup offers a better way to deal with current industry issues, it only needs to demonstrate critical mass in a specific region, lane or market. That should be enough to generate a strong flow of investments, and that may be too late for incumbents to react. Remember when Yahoo made a $1bn offer to Zuckerberg in July 2006 – Facebook then was not profitable and was only 2 years old. Now Yahoo has just been just sold for $4.8bn and Facebook is worth $347bn. Incumbent 3PLs are nowhere as tech savvy as Yahoo, so when a similar movement happens on the freight industry the results could be even worse for the establishment. In summary, this may happen much faster than people think.
  • Relationships: we believe this is currently true only due to the lack of other exterior signals of reliability. Relationships used to matter if you needed to sleep in another person’s apartment. Now the dual rating system of Airbnb is so reliable that you can trust a stranger to crush in your sofa. Once a strong and reliable online community is built, personal acquaintability should matter less.
  • Quality: industry disruption will only happen once startups stop behaving like incumbents and start acting boldly. Each day companies that begun claiming to be “uber for trucking” end up with the same 2/3 of headcount composed by sales people. Same freight brokerage model with a better user experience and a lot of phone calls.

 

We are trying things that were never done before and we dedicate half of our headcount to software engineers and designers. What do you think start-ups need in order to succeed in the logistics industry?

 

Felipe Capella is co-founder of Loadsmart and Chief Product Officer

Incumbent 3PLs Will Not Disrupt Logistics

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Erica Phillips from The Wall Street Journal brought the news that DB Schenker has entered into an agreement with uShip to use its technology in the European market as digital freight-booking platform.

Companies like XPO Logistics Inc. are spending millions of dollars to develop in-house platforms. Others have pursued acquisitions, including United Parcel Service Inc., which last year bought Coyote Logistics, a freight technology firm, for $1.8 billion. Deutsche Post AG took a €345 million ($383 million) write-off on a failed effort to create its own global freight forwarding technology platform.

These efforts by traditional 3PLs to “become a technology company” through massive investment in IT can make sense from a business perspective but will not create transformative innovation. Take XPO for example, which has focused on a great number of M&A deals to grow quickly and consolidate part of the industry. The number of different systems, competing softwares, conflicting APIs and isolated data is staggering. Combine that with the the fact that breaking down is not an option for them: there are thousands of shipments being moved every day and investors looking at revenues and profits constantly.

Therefore technology investment write-offs like the $383 million mentioned in the article should not be surprising at all. The reality is that incumbent 3PLs don’t have the risk appetite or the incentive to be aggressive on technology adoption, as still have to deal with legacy systems arising from decades of operations and recent acquisitions. Big technology spending disclosed by traditional players are more a PR stunt than an actual willingness to disrupt the industry. Coyote is another good example: it operates in an extremely similar manner to any other big 3PL: based on phone calls, an army of salespeople and a traditional brokerage model.

It will be interesting to see what happens with the uShip – DB Schenker deal. The european market has its own peculiarities, and uShip model looks more like a B2C than a B2B. But more importantly, uShip is focused on matchmaking freight with carriers and does not actually operate the shipment movement from point A to point B.

It looks like DB Schenker is looking more for a platform to manage its partner carriers and tender loads electronically than introducing an innovative business model on the shipper side.

 

Felipe Capella is co-founder of Loadsmart and Chief Product Officer.

Loadsmart SmartWay Transport Partnership

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smartway_transport_partner

January 15, 2015

LOADSMART JOINS U.S. EPA SMARTWAY TRANSPORT PARTNERSHIP

New York, New York — Loadsmart today announced that it joined SmartWay Transport Partnership, an innovative collaboration between the U.S. Environmental Protection Agency (EPA), an industry that provides a framework to assess the environmental and agency efficiency of goods movement supply chains.

Loadsmart will contribute to the Partnership’s savings of 144.3 million barrels of oil, $20.6 billion in fuel costs, 61.7 MMT of carbon dioxide (CO2 ), 1,070,000 tons of nitrogen oxides, and 43,000 tons of particulate matter, the equivalent of taking 13 million cars off of roads.

Developed jointly in early 2003 by the EPA and Charter Partners represented by industry stakeholders, environmental groups, American Trucking Associations, and Business for Social Responsibility, this innovation program was launched in 2004. Partners rely upon SmartWay tools and approaches to track and reduce emissions and fuel use from goods movement. The Partnership currently has over 3,000 Partners including Shipper, logistics companies, truck, rail, barge and multimodal carriers.

Loadsmart is a proud advocate for a cleaner environment. Our goal is to reduce the total number of deadhead miles travelled annually until they are eliminated completely. 

For more information on Loadsmart visit www.loadsmart.com or call 1-646-88-SMART.
For information about the SmartWay Transport Partnership visit www.epa.gov/smartway

Fast Facts: 5 Things to Know About the FAST Act

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1. It’s Been A Long Time Coming

The Fixing America’s Surface Transportation (FAST) Act is actually a compromise between the Senate’s Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act that was passed in July and the House’s Surface Transportation Reauthorization and Reform Act (STRR) Act that was passed in November. According to the Department of Transportation, this five-year, $305 billion plan intends to: “reform and strengthen transportation programs, refocus on national priorities, provides long-term certainty and more flexibility for states and local governments, streamline project approval processes, and maintain a strong commitment to safety.”

2. It Has An Ambitious Set of Goals

Quoted directly from the Department of Transportation, the goals of the FAST Act are to:

  • Help ensure that Americans can get where they’re going more safely and spend less time sitting in traffic.
  • Help raw materials and products can get to their destinations more efficiently.
  • Ensure that the cost of goods and services we depend on every day are not needlessly inflated by poor infrastructure and freight bottlenecks.
  • Ensure that programs work better for states and local partners.
  • Help American businesses can be more competitive and enabled to create more jobs.

3. A Lot of “Big News” Provisions Were Removed

Throughout the last quarter of 2015 there was hot debate over several proposed provisions of the highway bill. It seems that many of these were thrown out of the final version of the FAST Act, including:

  • The proposed increases in maximum weight and length were both thrown out. These provisions faced opposition from major groups like the Truckload Carriers Association and Truck Safety Coalition, who cited increased investment for limited benefits and safety concerns, respectively.
  • The provision that would have encouraged brokers and shippers to hire carriers based off of a set of criteria was thrown out. If this provision had passed, over 450,000 motor carriers would have potentially lost business based on just one criterium- a “Satisfactory” safety rating. Data suggests that nearly half a million small trucking companies and owner-operators are simply unrated and would have been disqualified unfairly.

4. Major Changes are Possible Depending on Research

While quite a few widely discussed provisions were thrown out, others were placed in a sort of legislative purgatory: pending dependent on the result of research.

  • The provision that would have essentially allowed individual states to create compacts with one another to allow motor carriers under the age of 21 to cross state lines was not in the final version of the bill. Instead, the FMCSA will conduct a controlled study on under-21 drivers who served in the military or who serve in the reserves to determine safety and
  • The FMCSA is also required to do research on how detention time impacts drivers, their schedules, their pay and how it impedes the flow of U.S. freight.
  • The FMCSA will also be conducting research to determine whether or not there should be a raise in the minimum $750,000 in liability insurance required for general freight haulers.
  • The FMCSA had to make the compliance and safety scores of drivers private. They must now  commission a Transportation research board to “study of the accuracy of the CSA Safety Measurement System (SMS) in identifying high-risk carriers and predicting future crash risk and severity.”

5. Many are Happy With the Provisions that Were Passed

While no one expected anyone to be completely satisfied, many expressed satisfaction with the measure that were passed, including: a path to reform the Federal Motor Carrier Safety Administration’s CSA safety monitoring system, potential for the use of hair testing for federally mandated drug tests, an easier process for veterans returning from service to transition into the  trucking industry, and dedicated funds for important highway freight projects.

  • American Trucking Associations’ President and CEO Bill Graves said in a statement that “[Tuesday]’s announcement that House and Senate leaders had reached an agreement on a long-term highway bill is welcome news to those of us in the transportation world. While we all, of course, wish there was more money to be had, this bill takes important steps to re-focus the program on important national projects and takes critical steps to improve trucking safety and efficiency.”
  • Anthony Foxx,  Secretary of Transportation and a long-term advocator for improvements in infrastructure said in a statement that, “After 36 extensions, hundreds of congressional meetings, two bus tours, visits to 43 states, and so much uncertainty, it has been a long and bumpy ride to a long-term transportation bill. It’s not perfect, and there is still more left to do, but it reflects a bipartisan compromise I always knew was possible.”

4 Ways Truck Drivers Make the Holiday Season Possible

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We’ve talked about what would happen without truck drivers, but when someone tells you to thank a truck driver, do you really know what you are thanking them for? All year long truck drivers miss countless family dinners and holidays, drive through horrendous weather and sit in hours of traffic to deliver the goods, oil and supplies we depend on as a country. Every holiday season we travel to see our loved ones, enjoy large meals and unwrap presents- none of which would be possible without the 3.5 million truck drivers who work throughout the holiday season. Check out the statistics below to find out exactly how truck drivers make the holiday season possible.

Food

This Thanksgiving, be thankful for truck drivers. Truck drivers carry the nearly 52 million turkeys that will be consumed this year to your local grocery store. They also carry the 841 million pounds of cranberries, 1.3 billion pounds of green beans, 2.4 billion pounds of sweet potatoes and 1.3 billion pounds of pumpkins you enjoy annually. We’d all have empty tables without truck drivers!

Traveling

The holidays are a time for family. In 2014 nearly 100 million people traveled during the year-end holiday season. This year, 46.9 million people are expected to travel 50 miles or more for Thanksgiving. Together, that’s close to one-half of the entire United States population. Without truck drivers, there would be no gasoline to fuel these trips, dampening holiday cheer across the country.

Gifts

In 2014 Americans spent $620 billion on holiday shopping between November 1 and December 16. Considering that 100% of consumer goods are transported by trucks, it’s realistic to say that they worked overtime to make sure stores had everything you needed for your holiday shopping list. On top of delivering goods to store shelves, they also transport a majority of packages. Those are both the packages you order online, and the packages grandma sends. It’s predicted that the U.S. Postal Service will deliver 15 billion piece of mail and packages during the 2015 holiday season.

Everything Else

It’s no secret that truck drivers are responsible for delivering most everything you buy to get in the holiday spirit. Not only do they stock the shelves, they bring holiday cheer in other ways. For example, did you know trucks deliver the helium used to fill the famous Thanksgiving Day Parade balloons? Or that each year Americans buy 33 million real Christmas trees? At any given time there are over 350 million Christmas trees growing on farms around the country. How are these millions of trees delivered from farm to consumer? Truck drivers, of course.

Truck Drivers Make the Holiday Season

It’s pretty clear that we owe a lot to truck drivers. They make our holiday season something to look forward to all year long. Loadsmart would like to thank the millions of truck drivers that keep our economy going not only during the holidays, but all year long.

3 Ways for Truck Drivers to Stay Safe on the Roads this Winter

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3 Ways for truck drivers to stay safe on the roads this winter

With icy roads, snow storms and generally unwelcoming weather right around the corner, it is time to start preparing for winter. For those of you who are on the road most of the time, it’s important to make sure that you and your truck are ready for whatever comes your way. So what can you do to prepare? We’ve put together a list of tips to keep you safe this season.

Pre-Trip Prep

You’ve heard it before: preparation is key. The best tip we can give for a safe, smooth ride is to do your prep work. Know your route, know where the best rest stops are and have a backup plan. Monitor the weather to figure out where the weather is the worst and where it is the best so you can better plan where you should stop. Keep extra essentials on-hand, both for you and for your truck. Good supplies to keep for you include an extra blanket, flashlight, coat, water and a charger. For your truck, it’s good to keep sand or salt, extra windshield-wiper fluid, jumper cables and a windshield scraper.

Be Aware of Your Surroundings

Know your truck. If you’re in the same truck you’ve been in for years, you know your truck’s limits and shortcomings. You know when you need to break, how it handles turns and how it drives on the ice. If you’re in a new truck, or are relatively new to the trade, it’s important to take these points into consideration before you head out into stormy weather. Give yourself extra space to turn and brake. And no matter how long you’ve been on the road, always watch out for black ice, which appears most often on bridges, intersections, overpasses and naturally cooler spots.

Inspect Your Truck

You always inspect your truck, you’ve been doing it for years, we know. Inspections are always important, but during the winter they’re crucial. Before your trip, double and triple check your lights, tires, fluid levels and windshield wipers. Make time during stop offs to check you truck again.

Are You Ready for Winter?

Depending on where you are, you probably still have time to get ready for the cold season. Here at Loadsmart, we want you to stay safe on the road. When the weather turns bad, it’s easy for both sides to get frustrated. With our GPS tracking and open chat platform features, we make it effortless to stay connecting, ensuring a better experience for everyone. Interested? Sign up for free here to access these tools and all of Loadsmart’s other features.

American veterans are saving the trucking industry

How Veterans are Saving the Industry

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How Veterans are Saving the Industry

Each Veterans’ Day Americans take time to reflect and honor all of those who served their country. What many fail to realize, however, is that thousands of veterans continue to serve their country in a different way after coming home. A growing number of military veterans have decided to hit the road as motor carriers to do what they do best- keep America running smoothly.

Why Veterans Make Great Truck Drivers

As of 2013, there were 22,000 active-duty truck drivers and 10,000 who had recently separated from the military.

As Bill McLennan, CEO of FASTPORT told FleetOwner.com, “There’s a lot of similarities between what [servicemen and women] do in the military and what the trucking industry does, and that’s regardless of what their military occupation or specialty is.”

He’s right- to work as a truck driver requires extensive training and discipline, leadership and independence, all of which are skills inset by the military. On top of that, many veterans worked in similar positions while on active-duty, and already have the skills and knowledge needed to safely and efficiently operate a truck.

Why the Industry Needs Veterans, and Vice Versa

It’s no new news that there’s a driver shortage in the industry. The American Trucking Associations predicts that we will need 175,000 new drivers by 2024 to avoid chaos. It’s also not news that there is a huge number of unemployed veterans in the United States. In 2014, the veteran unemployment rate dropped to 5.3%, however, that still left 573,000 veterans without a job. To combat both issues, the government has started giving colleges and schools federal grants, specifically to pay the tuition of veterans who wish to become truck drivers. In addition, most states now offer skill test waivers to veterans who have two years of safe driving experience while on active-duty.

Veterans and the Trucking Industry 

Veterans and the trucking industry have a mutually beneficial relationship, anyone can see that. Hopefully in the upcoming years more veterans will learn about the opportunities being a truck driver presents, and we can begin to reduce the number of unemployed veterans in the United States. For those who are veteran motor carriers, Loadsmart thanks you for your service on both fields.

Logistics technology eliminates deadhead miles to make the trucking industry more environmentally friendly

How Logistics Technology Can Save the Environment

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We’ve talked about how logistics technology can save the industry, but did you know it could help save the environment, too? As a highly fragmented industry that’s severely lacking in technology, many trucks are running with little efficiency. If the trucking industry could eliminate its deadhead miles, trucks would spend less time on the roads, using less fuel and cutting down on emissions.

The Facts of the Matter: Deadhead Miles and the Trucking Industry

In a 700 billion dollar industry that moves 70% of all goods in the United States, there is little room for inefficiency. Class 8 trucks log over 130 billion miles a year, with nearly 20 billion of those considered deadhead miles. The trucking industry accounts for 12.8% of all fuel purchased in the U.S., which translates to 17.5 billion gallons in 2014 alone. By eliminating deadhead miles, the industry would save over 2.5 billion gallons of fuel every year. A decrease in fuel use and emissions will in turn reduce air, water and land pollution, acid rain and ozone destruction.

Real-Time Shipment Tracking and Notifications Eliminate Deadhead Miles

Real-time shipment tracking sounds pretty “Big Brother,” right? Well it’s not, in fact, real-time shipment tracking is one of the most powerful tools available to the industry, for shippers, carriers and the environment. Using GPS technology, logistics platforms are able to send carriers local jobs instantly, eliminating time usually spent at loadboards. When carriers are able to find loads via location instead of traveling back with an empty trailer, shippers receive better rates, drivers don’t have to waste time, extra trips are eliminated and the entire process is streamlined.

Fleet Management Makes For Better Business Decisions

Knowledge is power. It’s an age-old adage for a reason. When dispatchers and owners know exactly what’s going on with their drivers, via tracking, open communication platforms, instant e-document transfers and load organization tools, they are able to make better and more informed business decisions.

So What Does Logistics Technology Mean For the Environment?

With a growing number people in the industry transitioning to technology based platforms, the overall efficiency of the industry is poised to skyrocket in the coming years.Our goal is to bring the excess capacity to market and eliminate the billions of deadhead miles traveled every year. With an increase in efficiency, there will be a decrease in traffic, emission, safety and economic concerns. 

 

The driver shortage, autonomous trucks and other things that could mean big changes in the trucking industry.

5 Things That Could Mean Big Changes for the Trucking Industry

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There are dozens of impending changes in the trucking industry. With new legislation passing monthly, upgrades in technology happening weekly and concerns being addressed daily, it seems that the only constant in this industry is change. So what are some of the biggest things on the horizon?

Driver Shortages

This is by no means a new problem, but it is a problem that’s creating huge changes in the trucking industry. With an estimated 890,000 drivers needed in the next decade and high turnover rates across the board, the industry is struggling to find a solution. When paired with the fact that freight volume is forecasted to increase 29% in the next 11 years, these statistics get downright scary. People are calling for collaboration among fleets, offering more benefits to drivers, mass recruiting and even working on passing legislation that allows drivers as young as 18 to carry freight across state lines. While there may not be any one solution, the one thing we do know is that change is coming.

Long-Term Highway Bill

The Surface Transportation Reauthorization and Reform Act of 2015 (STRRA). Have you heard of it? Maybe you don’t know it by title, but you have definitely heard about how it’s causing changes in the trucking industry. The most noted reform in this bill is a measure that allows states to create “compacts” that lower the minimum age to cross state lines from 21 to either 18 or 19 (depending on the version) to help alleviate driver shortages. While the Internet is abuzz with the potential minimum age reduction, the STRRA is first and foremost a 6-year plan to spend $325 billion on improving national infrastructure, and hopefully combatting congestion problems. At the same time, this bill has language that would allow for the nationwide operation of twin 33-foot trailers and for states to be able to change the maximum weight limit to 91,000 pounds, both of which have raised safety concerns with the Trucking Safety Coalition.

Autonomous Trucks

As technology revolutionizes the trucking industry, many look to autonomous trucks to combat the impending driver shortages. Will these self-driving trucks soon cause major changes in the trucking industry? Sort of. Most “autonomous trucks” are actually only level 3 autonomous, meaning that drivers can cede safety-critical functions under certain conditions, but are able to take back full control at anytime. While companies such as Freightliner say they have no intention of creating a level 4, fully autonomous truck, research from Frost & Sullivan predicts that as many as 182,000 level 3 trucks could be on the roads by 2035. The report goes on to say that the factors that affect the popularity of autonomous trucks include cost, social acceptance, legislation and the maturity of the technology.

Capacity Problems

This problem is the offspring of driver shortages and the recovering economy. On one hand, fleet owners have been seeing an increase in demand over the past couple of years that have many companies operating around  95% capacity. While this seems like a great change in pace for the industry, the reality is that it limits growth. For the companies that are operating at a high-capacity, the ongoing driver shortages and the inevitable worsening the shortage discourage fleet growth. The Wall Street Journal reports that others, such as Aaron Tennant, president of an Illinois-based company,  Tennant Truck Lines Inc., have percentages of their fleet sitting vacant, costing tens of thousands of dollars a month.