U.S. trucking business has remained stubbornly low-tech—but this may be starting to change
May 7, 2015 10:27 p.m. ET
One recent morning, Ivan Sandul, a 28-year-old truck driver from Sacramento, Calif., found himself wishing there were an app to make his job easier.
After driving a load of machine parts more than 3,000 miles from California and dropping it off in Canada, he was up at dawn, working the phone from a parking spot in upstate New York, trying to find a load to help begin paying the cost of his return trip home. On his fifth call, he found a freight broker looking for a driver to haul a load of metal from a nearby recycling plant to Ohio.
“I said, ‘I’ll take it. I’m not going to wait any longer,’” Mr. Sandul said. “’I have to get moving.’”
Even as thousands of jobs in the transportation sector, from ticket-takers on commuter trains to delivery agents for the U.S.’s biggest parcel services, have been transformed by mobile technology, trucking has remained stubbornly low-tech.
Independent owner-operators of trucks make up about half of all truckers in the U.S.—by rough estimates about 250,000 drivers—and generally still rely on a system that evolved from one built on handwritten notes tacked to truck-stop bulletin boards. Typically, an independent driver searching for shipments will call intermediaries known as freight brokers and dispatchers. In return for matching them with loads, brokers take a cut—ranging from 10% to 30%—of what shippers pay drivers.
If you wake up too late, Mr. Sandul said, you might end up wasting a working day trying to find the next shipment.
A crop of tech startups believe they can change all that with mobile applications designed to make trucking more efficient. They compete for users by offering a steady stream of work and a smooth booking process that can be completed entirely within a smartphone app. They also aim to undercut freight brokers on fees, allowing drivers to take home more money.
It is a formula for overhauling a sprawling segment of the trucking business: independent drivers like Mr. Sandul who operate on the same roads as national companies such as Schneider National Inc. and Werner Enterprises Inc. but have little of their technology and look for shipments from smaller firms, which post their loads through middlemen.
“I really don’t think that the brokerages serve a huge purpose anymore,” says Bryan Beshore, founder of Keychain Logistics. The company makes an app which, it says, has been downloaded by more than 20,000 drivers. “If you can create an exchange that serves both parties better, you will find supply and you find demand.”
Founded in 2012 by Mr. Beshore, an alumnus of Silicon Valley’s Y Combinator tech incubation program, Keychain uses geolocation information, as well as data on truckers’ schedules and most commonly traveled routes, to match carriers with loads.
Mr. Beshore, who worked for a startup that provided GPS technology for mobile apps in the restaurant industry before founding Keychain, says the company takes between 6% and 10% of the cost of a typical shipment for its services.
Truck drivers aren’t strangers to using mobile technology. Some use mobile electronic logging devices that store how many hours they spend behind the wheel.
A handful of technology startups have targeted the trucking industry over the last decade, but most of these apps have focused on simpler tasks, such as locating nearby truck stops or looking up a weigh station’s hours of operation.
San Francisco-based Trucker Path Inc.’s eponymous app started this way. Over the past three years, the app has been downloaded 200,000 times by drivers, the company says. This month, the app’s maker plans to publicly launch a “marketplace” function to allow drivers to find loads on their mobile phones.
The central issue the new apps seek to address is what is known as backhaul, or the trips that truck drivers must take to return to their point of origin. Because truckers get paid by the mile and typically cover their own fuel costs, they try to avoid making backhaul journeys with an empty container.
For years, truckers found backhaul loads by scanning handwritten notes pinned to bulletin boards at truck stops, known as load boards, and calling to find freight orders through brokers and dispatchers. More recently, load boards have gone online, but most truckers still rely on middlemen.
Online load boards “are really old school and technologically unsophisticated,” says Matt Chasen, founder and chief executive officer of uShip, a company founded in 2004 that became one of the first app developers for the trucking industry.
Mr. Chasen says that uShip has between 50,000 and 70,000 drivers using its platform and charges between 10% and 20% of the cost of a load. It launched a new version of the app in February that focuses on collecting data on trucker behavior to help streamline the matching process.
Industry experts say mobile apps would be of most use to independent owner-operators, who rely on brokers to match them with freight. C.H. Robinson Worldwide
Jeff Tucker, chief executive officer of Tucker Co. Worldwide Inc. and chairman of the trade group Transportation Intermediaries Association, says that as the broker’s role has become less crucial, many companies have begun offering a wider array of logistics services, including networking between shippers, manufacturers and carriers.
“Matching trucks to loads is going to get a whole lot easier over the next 10 years,” Mr. Tucker said. “The main thing that’s going to change, really, is how many brokers there are going be 10 years from now, and I think the answer has to be less.”
Write to Robbie Whelan at [email protected]
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