What On-Demand Shipping Will Mean to the Trucking Industry?

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What On-Demand Shipping Will Mean to the Trucking Industry?

When ride-sharing services like Uber and Lyft hit the marketplace, both riders and passengers enjoyed its convenience and ease of use. Instead of calling a traditional taxi service, users could download and install an easy-to-use app and connect right from their digital device.

Passengers can search for available drivers in their area, and the driver and the passenger can review the experience at the end of the transaction. It should come as no surprise that the trucking and transportation industry now uses similar technology to connect drivers and shipping customers. On-demand shipping is the future of logistics, and these are a few tips to get your business rolling.

Concerns of Shipping & Trucking Industry Before Digitization

The trucking industry is huge, and more than 3.5 million people work as truck drivers. In addition to the drivers, there are also support personnel, brokers, and other professionals involved in the logistics. When you want to grow a trucking company, you can expect to face a lot of challenges.

On-demand shipping presents a great new alternative to traditional physical distribution operations for several reasons. These are just a few of the biggest challenges that drivers and other professionals in the trucking and transportatio industry face when they have to deal with using the traditional modes of shipping and freight handling.

High fees of brokerage

Brokers and drop shippers have been a big part of physical distribution and trucking for decades. The broker acts as an intermediary in each transaction and takes a commission on each new shipping deal that they negotiate.

This arrangement benefits the vendors and the customers by bringing the supplier and the end-user together, and it used to be worth paying the brokerage fees and commissions to expedite the deals. But this arrangement invariably resulted in higher shipping costs that were ultimately passed on to the customer.

The digital era has helped obviate most of the traditional brokerage fees that accompany transactions between the supplier, the shipper, and the buyer.

Security issues

With traditional modes of shipping, carriers didn't have access to a lot of detailed information about the shipment or the drivers. Today's on-demand shipping operations give all parties detailed information about the shipments, the drivers, and a host of other detailed information.

Many of the shipping companies also have access to driver telemetry now and have the ability to track shipments in real-time. If there are any complications at any point in the supply chain, all parties will find out right away and have the ability to respond quickly.

Tricky operations

There are a lot of moving parts in shipping freight, and the logistics can be overwhelming to even the most experienced carriers or trucking companies. Most drivers and suppliers still use phone calls and less efficient means of communication that squander valuable time and money.

With today's technology, you're far less likely to lose hours (or days) waiting for someone to return a phone call. As a new truck driver you're also less likely to encounter some of the conventional bottlenecks that occur when team members are constantly forced to communicate with each other one at a time.

Frequent poor customer experience

Traditional shipping has always been plagued with delivery delays, missing or damaged shipments, exorbitant shipment fees, incomplete orders, and a host of other customer service problems. Today's customer is much less likely to tolerate a shipper or a supplier that doesn't consistently offer great service in this era of on-demand services.

The freight industry still hasn't addressed many of these traditional service setbacks very effectively, and you'll definitely be well-positioned to grow a trucking company if you can offer your customers a great service encounter.

Trucking during a pandemic

The COVID-19 pandemic has had far-reaching implications in virtually every industry, and physical distribution is no exception. One of the biggest weaknesses that the industry encountered was massive supply problems throughout the world.

Consumers and businesses stockpiled goods as they became available, leading to massive shortages at retail businesses. On the other hand, the demand for products is at an all-time high.

A forward-thinking trucking company that's prepared to meet the unique transportation and logistics challenges created by our global health crisis can expect to stay very busy for the years to come.

How On-Demand Trucking and Shipping Will Revolutionize the Freight Industry

On-demand services like Uber and Lyft have created an effective template for creating future transportation technology for the trucking and transportation industry.

Shippers and truck drivers can now come together in one place and get connected. Customers with goods to ship can make their orders available to nearby freelance truck drivers on an online platform, and the terms of the deal can be arranged without paying a commission or fees to a broker.

The on-demand delivery platform offers several great benefits for truck drivers:

  • Fewer expenses
  • The ability to take more jobs
  • Trucks don't run empty
  • Reduced administrative tasks
  • Improved automation

Ultimately, taking the broker out of the process means lower costs for shippers and more money in your pocket. You won't miss out on opportunities for work or drive around with an empty truck anymore, and you'll be able to collect online payment on delivery through the same on-demand shipping platform.

How Will Technology Companies Deploy On-Demand Services for Trucking?

On-demand shipping is continuing to gain more market share, but conventional brokerage continues to dominate the industry. Large-scale carriers have a strategic advantage by sheer virtue of the size of their fleet and dedicated logistics, and the brokers operating on their behalf can command commissions of 20% to 45% on each shipment.

Dropshipping is not a business for the faint of heart, and brokers are handsomely compensated for their abilities to negotiate profitable deals for both carriers and suppliers. But now, any independent truck driver has an unlimited rolodex of contacts through the use of next-generation digital marketplaces.

On-demand technology

Anyone who's used Uber or Lyft to arrange personal transportation should already be familiar with its ability for drivers and riders to find each other and rate each other. This technology has already been adapted and put into use by a variety of different contract delivery services such as DoorDash and Grubhub and is also gaining traction in the trucking and transportation industries.

Users can connect using a smartphone app, and owner-operators have a lot more work opportunities available in a bigger and more connected marketplace. Shippers also save handsomely on overhead and other expenses associated with brokerage firms.

How to Build an On-Demand Freight Trucking Platform?

There are a number of different platforms available to handle on-demand freight logistics, or you can develop an app of your own. Developing an app from scratch is definitely a bit more detailed of a process, but you'll have the advantage of creating the User Interface (UI) experience that's the best fit for your particular operation.

When it comes to developing the app, you have your choice of several app development companies. Shop around to find one that you're comfortable with and let them know your requirements and expectations. You don't have to reinvent the wheel and owe it to yourself to look at the business models that are currently in use to see what's the best fit.

Existing trucking apps such as Uber Freight, Convoy, and Trucker Path are good examples of successful models that customers are already using and a good model to consider as you develop your own app.

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Features of On-Demand Trucking App Development

In order to develop a good on-demand shipping and physical distribution app for your trucking company, you'll need a UI for both drivers and shippers.

The apps need to be able to seamlessly integrate the same information but be presented in a way that makes sense to all of the parties in your distribution and supply chain.

Here are some of the basic items that you should include as you develop your custom one-demand shipping app.

Driver’s app

  • Registration form so that drivers can get signed up as providers and enter their payment arrangements.

  • Driver profile, which is a unique ID for each freelance driver so that shippers can review their credentials and qualifications.

  • Shipment details including the location and type of shipment so that drivers can review all pertinent information before accepting the shipment.

  • Shipment filtering to enable drivers to sort through manifests and available orders.

  • Accept/reject request form to enable drivers to either accept or reject the shipment delivery.

  • Availability indicator so that drivers can let shippers know that they are ready to pick up orders or if they're otherwise committed.

  • Trip log to enable drivers to check on the status of a current or previous shipment.

  • Push notifications will give drivers notifications for new activities, including receiving a new shipment or communication requests from suppliers or shippers.

  • Route tracking so that you and your client can monitor the status of shipments until they reach their final destination.

  • Dispatcher connect to enable drivers to get in touch with the dispatcher or clients right away in the event of any issues on the road.

  • Proof of delivery so that drivers can share a photo with their customer to document that the freight was delivered.

Shipper’s app

  • Login/sign up so that shippers can manually login through the app or sign up using a social media profile.

  • Vehicle list so that shippers can view the list of available vehicles in their nearby area.

  • Push notifications will give shippers notifications for new activities including shipment updates and communications from drivers.

  • Hire transport company so that shippers can get directly in touch with the transportation companies in their service area.

  • Live chat to enable shippers to get in touch with the driver in real-time.

  • Scheduled bookings should enable your shippers to schedule and review driver bookings for the upcoming weeks.

  • Promo codes and special offers will enable the users to view and apply special offers and promo codes directly in the app.

  • In-app payments so that you can settle up with drivers immediately upon proof of delivery.

  • Live shipment tracking to enable shippers to check the status of shipments and consignments in real-time.

  • Ratings and reviews so suppliers can offer ratings and feedback about the shipment and the supplier to help the on-demand shipping industry identify its top drivers.

Admin panel

  • Admin dashboard to enable users to monitor all aspects of their operations in real time.

  • Create sub-admins so that you can authorize limited access to management-level features to users in your system.

  • Transaction history to review any previous transaction at any time without having to retrieve paper files.

  • Block drivers/shippers for users to block any driver or shipper from access to future open orders.

  • Manage accounts to manage transactions and payment methods.

  • Manage ratings and reviews to help you curate reviewer activity.

  • Data analysis tracking to help you analyze all of data that is generated in your business.

What Services Are Out There?

At the moment, there are several marketplaces to bring shippers and truckers together. Overhaul is the first to enter the online marketplace, and its technology includes advanced safety and security features.

It also plans on launching a mobile app soon that will include features such as route planning, safety alerts, and driver assistance. Other services available include Convoy, Cargomatic, and Transfix, but no single provider is currently dominating the market share.

This is likely to change through competition, and the trucking industry will likely settle on the marketplace that delivers the most convenience and value.

The Future State of On-Demand Trucking

As the on-demand trucking industry continues to grow, shippers and truckers will continue to get more connected. The new technology is likely to solve many supply problems and future driver shortages and will facilitate cost-cutting measures throughout the trucking industry.

To learn more about how to use on-demand shipping to grow your trucking company or information about insurance coverage, contact CoverWallet online or at (646) 844-9933.