Trucking companies shouldn’t be afraid of Uber, or Uber-style technology because the entire aim is make it easier for shippers and carriers to connect, at the expense of today’s middle man. But what trucking companies should be afraid of is to not have such technology, explains Frank McGuigan, president and COO of Transplace, a leading 3PL.
“I don’t like talking about the Uber thing too much, because I don’t like how that commoditizes the very important carrier community,” he says, speaking with Fleet Owner at the Transplace Shipper Symposium earlier this month. “What I do like about Uber is they have terrific technology that makes it easier for carriers to find loads.”
Indeed, “transparency” was a central theme for the gathering of some of the largest shippers in North America. Simply, shippers increasingly expect point-and-click access to trucks, and then to have real-time visibility (and predictive ETA) into each load. And that’s not some luxury wish list for the 2020s. Carriers need to be on board, ASAP.
“Drag your feet and complain about it? I’m sorry, but this is happening,” McGuigan emphasizes. “If you look at where the market is going as it relates to transparency, real-time shipment status, etc., if [carriers] are complaining about ELDs, they’re never going to get it. This is just the way of the world. The best thing you can do as a trucking company is to train your drivers on service, and on technology. The slowest movers are going to be left behind.”
And because Transplace is optimistic about a sustained freight upswing, the need for efficiency—both for shippers and carriers—will only increase.
“There’s going to be more loads than carriers. North America is a strong economy, and GDP is going to grow at a stronger rate moving forward and it’s going to put pressure on capacity in the marketplace,” he says. “Carriers still have the relationships to deal directly with the shipper community. The reality is they need to do business with companies with a lot of information that can maximize the value of their own networks: How many empty miles are we eliminating? What’s our operating ratio?”
And speaking of those relationships and technology-driven “commodification,” McGuigan suggests quality of service and market specialization will be the difference makers for truckers. Why do companies maintain their own private fleets, and hire carriers for dedicated capacity? They have specific service needs that “can’t be commoditized into a simple click on a phone.”
“You don’t Uber the first-name relationships your driver has on a 12-stop route, delivering perishable goods,” he says. “There is enough specialization out there for companies to differentiate themselves on service. Embrace this technology. You can take the best from all of it: the transparency, the visibility, the ease-of-use should be very positive for the carrier community.”
So how do Transplace and other 3PLs prosper in supply chain without middle men? McGuigan suggests carriers shouldn’t view them as a company “that makes money on their backs,” but instead as a supply source to be used to optimize their networks.
“We’re in the business of taking these networks and putting them on top of each other, forming what’s best for the carrier community and what’s best for shipper community,” he notes. “The disintermediation is not going to happen to companies like Transplace. It’s going be for someone who’s taking the carrier’s rate and marking it up $500 and reselling it—and not having the carrier participate in that. Both the shipper and the carrier lose.”
And with all the technology, collaboration is more important than ever.
“Open up your network. Talk to your shipping community about where your holes are so they can work together to try to fill that,” he says. “How many billions of miles are wasted in this country? You talk about sustainability and greenhouse gases? Eliminate that waste.”
In closing, McGuigan’s punchline: “By the way, do we need to mention that Uber is losing an ocean of money?”
