Since the dawn of the internet, quantum leaps in technology have brought our world more change than in the last thousand years. If you were to tell me as a child, that one day I would hold a device in my hand that let me communicate with anyone, anywhere in the world and to be able to access all the knowledge of the world in an instant, I would have never believed such a thing possible. But here we are in 2018 and many of the companies in the multi-billion dollar transportation industry are still operating in the 1980s. Fax machines, file cabinets, pen and paper coupled with hours of daily telephone conversations are the norm for many trucking and freight brokerage firms as they conduct business each day.
It is no surprise that these companies are not keeping up with industry demands and are being outflanked by new, lean technology companies. These tech companies can do the same thing cheaper, better and faster – the holy grail of business self-actualization that most experts think impossible. Pick two they say. Listen up trucking industry professionals: Do not doubt their ability to disrupt your traditional way of conducting business.
The trucking sector took in $650 billion in total revenue in 2013, which originally caught the eye of some of these technologists from outside the industry. These tech gurus identified vulnerabilities within the trucking industry and weaknesses to exploit. One of those technologists was Dan Lewis, formerly of Amazon, who started Convoy in 2015. He was able to attract big names and big money with his idea to streamline the available truck capacity and match it up with laser-like accuracy to available loads. Some of the big names on board with financial support are Amazon CEO Jeff Bezos, Salesforce CEO Marc Benioff and Dropbox CEO Drew Houston. These are very high rollers, especially Bezos -who is the wealthiest person in the world as a result of his unparalleled success with Amazon.
The antiquated way that many third party logistics companies (3PLs) operate will be replaced soon. There are hundreds of thousands of loads being shipped each day, but the process of connecting the dots is very inefficient. Companies like Uber and Lyft, who have seemingly perfected the matchmaking process in the ride-sharing community, could easily make the shift to the trucking industry. It is the same concept- Uber matches empty car seats to people needing car seats. They could easily match empty trailers to shippers needing empty trailers if Convoy and other disrupting companies stumble.
In conclusion, the next couple of years will be interesting to watch. We are in the midst of a transition in all areas of industry. Transportation will be disrupted – that’s without question. What will we transition to? That remains to be seen as there doesn’t seem to be any limits on how fast and how much data can be analyzed and processed.