Status of On-Demand Trucking
This Article originally appeared in Logistics Brief on January 7, 2020.
The U.A. transportation market is quickly ramping up technology-enhanced options to move products, goods and people in an effort to keep up with demand. Customers are accustomed to free two-day shipping and detailed tracking information to follow their package every step of the way. Any business looking to fulfill these requirements should anticipate the need to outperform their traditional operations. On-demand trucking is a viable solution to meet all of these needs. Trucking companies can use it to find additional product that needs to be moved in the area to eliminate wasteful empty backhaul and businesses can deliver their products faster. It’s a win for everyone involved!
What’s Driving the Growth of U.S. On-Demand Trucking?
It’s no wonder there’s a big demand trucking. The tight U.S. job market, changing import/export levels and new technology have all combined to speed the shift to on-demand trucking:
- Capacity crunch. In recent years, lack of trucks and a scarcity of drivers-for-hire have combined with high freight demand to severely restrict U.S. trucking capacity/availability.
- Electric logging devices (ELDs). Federally mandated ELDs closely scrutinize and monitor drivers to be sure they follow hours of service (HOS) laws, which can impact driver productivity.
- Rising spot and contact rates. Trucking rates continue to rise while capacity remains tight, driving some shippers to move portions of their freight to intermodal transportation or “rail.”
- Trucking apps. New apps are taking center stage: Uber Freight’s app operates much like its ride-sharing service. Both Convoy and Amazon have apps that target on-demand freight, as well, matching trucking companies with shippers who have freight that needs to move. This “at-your-fingertips” flexibility means companies with shippers have flexible options for meeting their trucking needs; carriers can choose higher- and faster-paying freight.
- Rising interest rates. Higher rates mean higher costs for transporting goods, so shippers are best served by choosing their best transportation options.
How Does On-Demand Trucking Work?
On-demand trucking has a bright future for freight and transportation management and load matching.
- Provides a broad network of real-time carriers. This is not the old days of contracting with carriers to lock in capacity months or even years in advance: The capacity just isn’t there. On-demand trucking apps and spot markets let shippers connect with thousands of independent “owner-operator” drivers with empty truck space to sell.
- Leverages technology to handle settlements. Real-time freight visibility is important, of course, but it’s just as important to endure driver certification and timely, accurate freight pick-up and delivery and settlement processing. Having a transportation management system (TMS) connect directly to the asset (driver) through a platform that provides access to drivers’ certification and compliance-as well as manages the settlement through an Uber-like refrigeration-on back-hauls, making it a win-win for shippers and carriers.
- On-demand trucking offers shippers a proven and flexible way of conducting their business, with real-time visibility over truck assets and a simpler way to access settlement, liability and other functions via a single interface. Read how recent innovations in web service technology mean shippers can get direct carrier rates, POD and BOL images, online shipment scheduling, and real-time status updates from all carriers on one platform to optimize shipment, financial and customer relationship management and ensure better freight intelligence.