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.
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.
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.
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.
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.
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.
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.
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:
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.
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.
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.
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.
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.
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.
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.