Online retailing giant Amazon is reportedly building an app-based service that will make it easier for truck drivers to find shippers that need goods moved. Logistics operations became a significant focus for the company in 2016 as they look to optimize their operational costs and improve customer satisfaction.
But they are far from the only tech company investing in the $800 billion trucking industry. In December, Uber launched a service called Uber Freight that offers an identical service - it seeks to connect businesses that need to ship products with truckers willing to drive them.
In today’s blog, we’re going to compare and contrast the competing initiatives.
AMAZON’S TRUCKING APP
One of the big stories of 2016 was Amazon’s move to break into the distribution network.
This latest development was first reported by Business Insider. Citing a person with direct knowledge of the matter, they revealed that the app is scheduled to launch in the summer of 2017. It will offer real-time pricing and driving directions, as well as personalized features such as truck-stop recommendations. The app may also feature tracking and payment options to speed up the shipping process.
The app is a clear indication of Amazon’s ambitions for the coming year, and will compliment some of the company’s other new services. For example, over the past year alone, Amazon has purchased a significant amount of trailer trucks and cargo planes. It has also launched new “last mile” services like Amazon Flex.
Amazon holds several advantages over its competitors in the logistics industry. It enters the market with a giant shipping network and a rapidly growing package volume, so it should have no problem finding work for truck drivers on its platform.
But Amazon aren’t the only tech company making inroads in the trucking industry. Popular ride-hailing company Uber recently launched its own service, dubbed Uber Freight, in late December. The company is yet to comment on the new service, but we can safely assume that the truck delivery system is connected to Uber’s acquisition of the self-driving startup Otto last August.
Otto was founded in early 2016 by former employees from Google, Apple, Tesla and others. Instead of building its own self-driving trucks, the company’s aim was to build hardware kits for existing truck models. Otto’s co-founder, Anthony Levandowski, became the head of Uber’s entire self-driving division.
In October, a truck outfitted with Otto’s autonomous technology successfully completed the first commercial cargo run for a self-driving truck. The truck travelled 120 miles from Fort Collins to Colorado Springs carrying two thousand cases of Budweiser. At the time, Uber and Otto told reporters that this was just the beginning for what they envisioned. It is likely that carriers and shippers who sign up for Uber Freight will be the first customers for the Otto self-driving kit.
There are many other tech start-ups and carriers working on similar services. Chinese startup Huochebang, which markets itself as the country’s Uber for the trucking industry, recently raised $115 million in funding. The company has more than 2.3 million trucks on its marketplace and has handled up to 100,000 bookings per day.
In the United States, trucks carry 10 billion tons of freight each year. That’s 70 percent of all goods shipped across the country, according to the American Trucking Association. With the trucking industry playing an increasingly central role in the logistics world, expect many other companies to be attracted to the area. For now, Uber and Amazon seem to have stolen a march on their competitors.
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