With the growth of consumption globally, logistics are trying to satisfy the market’s needs, but many challenges should be overcome. Currently, even stable transport companies with good truck management can’t predict all problems. For example, worldwide pandemic when many of their drivers get positive Covid-19 tests or when freight brokers can’t find the return freight and the truck travels empty. On the other hand, the suppliers have huge demand fluctuations due to lack of capacity or downtimes for their transport company and late deliveries. To avoid such problems, both sides need some moderators to balance demand and supply. The modern world can offer a nice solution – on-demand trucking startups.
Maybe you have already heard about trucking services apps/websites like Uber for trucking or Convoy. Nowadays, numerous on-demand trucking startups like Uber Freight are trying to jump into the industry and get their “piece of the pie.” Would You like to become a new hero at your local transportation market? Build your own Uber for delivery. Truck owners will be able to find clients on your platform, and shippers will deliver all their goods on time.
Here is a short overview of 5 fast-growing on-demand trucking startups.
Uber launched its Uber Freight trucking business in May 2017. From the USA, the company expanded to Canada and Europe. Uber Freight connects truckers with shippers, pretty, in the same way the company’s ride-hailing app pairs drivers with those looking for a ride. It is a part of Uber’s “other bets,” like food delivery service, Uber Eats, and its New Mobility ventures like Jump-branded electric bikes and scooters.
Uber for trucking offers many possibilities to its users like booking freight delivery using the app, access to transparent pricing and quick payments, tracking the delivery process from the moment of loading to delivery, and submission of PODs (POD – proof of delivery) and fleet management. The system matches shippers to carriers intelligently and can calculate a quote based on market conditions and other factors.
Many big companies like LG, Procter & Gamble, Wis-Pak, Premier Packaging, etc., are already successfully using Uber’s benefits for shipments.
“Making sure that our freight is moving correctly, on time, and at the right price is getting more complex just about every day.… Having an innovation partner is supercritical. We see Uber Freight as a partner who can help us get there.”
— says Paul Heffernan, Vice President, Supply Chain, LG Electronics USA
If you are interested but don’t know how to use the Uber Freight app, here is a video How to use the Uber Freight app.
The company launched its app in 2015 when smartphones just started to be widespread among truck drivers. Co-founders of Seattle-based Convoy are Dan Lewis and Grant Goodale, both former Amazon employees, who handled a massive logistics task.
During these 5 years, Convoy has raised $265 million and reached a valuation of more than $1 billion. Business is interesting for these well-known investors like CapitalG, the venture arm of Google parent company, Alphabet, Bono, Bill Gates, Jeff Bezos, Salesforce.com CEO Marc Benioff, and Expedia chairman Barry Diller.
The main aim of this startup is to bring efficiency to the supply chain industry. There are 2 ways to achieve this goal. First, they reduce the number of empty trail trips, currently 40% of the USA’s highway miles. Second, they try to spread the Convoy trucking services app among small firms with just three or four trucks, which make up most of the trucking industry. Convoy helps these truckers operate more efficiently and gives its customers (GE Appliances, Home Depot, Anheuser-Busch, and Unilever, among them) better tracking and pricing data. The app also offers free access to all available loads, payment with Convoy QuickPay™ without fees, upload of documents electronically, etc. The company makes money by taking a percentage of each transaction on its platform.
Founders Dan Lewis and Grant Goodale are certain that by using data-driven software to better match up shippers and truckers, they can save time, money, and CO2 output.
An Indian startup founded in 2015, BlackBuck is trying to overcome a big inefficiency problem in India’s trucking system. Truck drivers often struggle to find any work on their way back from the unloading point. BlackBuck helps them to find 25% to 30% more work opportunities. The startup makes money by taking a fee between 15% and 20%.
Knowing the Indian realities, BlackBuck has developed a simple app for truck drivers, who typically aren’t avid smartphone users, to help them find work and easily navigate to their destination using Google Maps. On the client-side, businesses can use a similar app to place orders. Recently it also tied up with insurance company Acko to secure all the trucks on its network.
BlackBuck’s matchmaking technology is similar to Uber for Trucking and includes dynamic pricing that considers route demand and job requirements. Indian on-demand trucking apps can offer loads across Europe and India with no registration fee, payment guarantee, and always available issues management.
Today, BlackBuck is the largest trucking network in India, and the company’s technology platforms deliver reliability, efficiency, and seamless experience for shippers and truck drivers. And that is not all; in 2019, BlackBuck has entered the European market and operates in Germany, Poland, France, Denmark, and other countries. BlackBuck has over 30000 shippers and forwarders that provide over 5000 shipments a day to about 10000 clients like Unilever, Nestle, Mondelez, P&G, Colgate, and Samsung, Reckitt Benckiser, Coca-Cola, and others.
As the country with the largest population and developing production system, China is also trying to be on the top of all the newest technologies and logistics know-how. Local companies do 75% of all commercial cargos in China. To minimize fuel costs and increase efficiency, some companies have also started to use on-demand trucking technologies.
Huochebang, founded in 2008, is the largest trucking company in China with 6 thousand employees and a network of 5.2 million drivers. The cloud-based logistics platform helped to decrease fuel costs and carbon emissions by matching the supply and demand at the needed time and place. Thanks to O2O (Online-to-Offline) truck freight platform company that provides integrated services to both shippers and truck owners in real-time.
The startup’s revenue model is pretty unique, as the company doesn’t take any fee for basic matching services. Huochebang earns money by offering additional services, starting from loans and insurance for its truckers to selling auto parts and second-hand trucks. Huochebang also partnered with Alibaba’s cloud unit and Zhong An Online Property and Casualty Insurance, China’s first internet-only insurer.
Like Uber, the Huochebang platform has a rating system where shippers can evaluate the trucker on punctuality, services, reliability, prices, etc. In this way, drivers are motivated to provide a better quality of their services for higher ratings, leading to a higher possibility of getting the next order and more clients. It is essential for individuals who own trucks (individuals own 90% of freight trucks in China) and don’t have many clients and orders. Using this platform, they can avoid downtimes, empty return freights, and overconsumption of fuel (as the app finds more fuel-efficient routes).
Huochebang has achieved huge growth in the last couple of years. Big giants like Tencent Holdings, Baidu, and International Finance Corp. came as investors and companies raised about US$370 million in a financing round that valued the startup currently at over $1 billion.
Due to the fragmentation and huge information asymmetry in the Brazilian trucking market, on-demand tracking startups have a great opportunity to take their place in the sun. With about 400 000 trucks in Brazil, 40% of the time, they are running empty. So such a startup as CargoX, even with no assets, can get benefits matching the shippers and the truck drivers.
CargoX was founded in 2013 by Federico Vega. Headquarter is located in San Paulo, Brazil. The business is so attractive that even Uber co-founder Oscar Salazar became one of the investors.
The company’s main idea is to offer a free market for transport, which mainly connects the cargo with the transport companies, where the shipper, for example, has access to track their in real-time his cargo. Starting in 2013, they launched only a web-site as at that time, most truck drivers had no emails or anything related to the internet. But with the appearance of free phone calls in WhatsApp and increasing smartphone usage, CargoX decided to invest in the on-demand trucking app. And the percentage of truck drivers using the application was higher than those who used the website. Later the company also launched a shipping platform based on blockchain technology, which offers a secure and decentralized environment to shippers and freight forwarders to exchange digital documents in a secured manner.
The pandemic also influences the additional functions of the app. Due to the country’s pandemic restrictions, CargoX inserted a tracking for snack bars and stops for truck drivers that were in operation on the platform. That shows that the company is flexible and ready to develop itself and adapt to new conditions.
Currently, CargoX has a network of 150,000 trucks. Sometimes truckers only contact the company if they’ve made a delivery and are looking for freight to take on their return trip. But there are already stable clients who get all their freight from the company.
As you see, the on-demand trucking apps are already popular worldwide, but there is still a lot of room for improvements and development. Such companies are currently operating only on big markets, so small and not-so-developed markets still lack modern logistics tools. So if you are inspired by the success of such great on-demand trucking startups, you can try to create your own application like uber for trucking. Just add some specific features to stand out from the competitors, and who knows, maybe it will be the next Uber?