Digital freight brokerage Uber Freight announced this morning that it has moved tens of thousands of touchless loads with no human intervention. The company termed this a “major milestone in product automation” after moving its first touchless load last fall.
These advances, an Uber Freight spokesperson made clear, involve more complex tasks than pricing and matching, including appointment scheduling and award and document management. Uber Technologies (NYSE: UBER) will announce its first quarter financial results on May 7 after the market close.
The spokesperson said that touchless loads were being moved for ‘key customers’ with whom Uber Freight had API integrations and who had major lanes in markets including Texas and California where Uber Freight has built carrier density and “we don’t have to worry about coverage.” Fleets of all sizes are moving touchless loads.
Uber Freight grew its gross revenues by more than 100% last year, from $359 million in 2018 to $737 million in 2019.
While digital freight brokerages have been criticized by their competitors for bidding aggressively for freight and recording operating losses as they scale, this milestone is something of a vindication for Uber Freight’s strategy. Building API functionality with BluJay and SAP was likely difficult and expensive, but it means that shippers can share data with Uber Freight’s platform almost instantly – much faster than legacy EDI systems. It turned out that buying growth was not just about growing revenue at the expense of take rate, but was necessary to ingest enough data about carrier preferences to source the ‘right’ capacity for any given load.
“Understanding carrier preferences is the most important factor to building density and enabling touchless loads on the carrier side,” the spokesperson said.
Those preferences are studied by analyzing patterns in searching and booking behavior, as well as carrier bidding, which Uber Freight uses to populate the “For You” section of its app. “Saved Lanes” allows carriers to mark preferred lanes to receive alerts about new available loads on Uber Freight’s web-based carrier portal; the company said that the feature would be rolled out to all app users this month.
“We’ve seen a trend towards more automation within shipper operations,” said Lior Ron, Head of Uber Freight, in a statement. “Shippers are looking for partners who can also help them become touchless. Uber Freight’s pricing API allows shippers to eliminate significant labor and friction in their operations.”
Uber Freight went on to say that API integrations are crucial for touchless loads because they enable automated systems to interact with each other – a driver being dispatched to a load by a carrier, and various tracking events, for instance, are all uploaded to the shipper’s transportation management system without human intervention. Shippers who offer flexible appointment times make loads more appealing for carriers, which leads to fewer touches, Uber Freight said.
Sufficient lead times are also important, but not necessary, for Uber Freight’s algorithms to find the right carriers for the job – 25% of all touchless loads were tendered with fewer than 48 hours of lead time before the desired pick up, and 10% were tendered with fewer than 24 hours of lead time.
Those statistics are especially striking when the market dynamics of some of Uber Freight’s core West Coast markets are taken into account. In late March, when outbound Los Angeles volumes softened considerably, carriers avoided the market and inbound spot rates spiked. Freight brokers who spoke with FreightWaves had a harder time booking trucks into Los Angeles in late March and early April. The reality of the way trucking markets work – volumes flow up or down, altering the balance of capacity and eventually moving rates – makes Uber Freight’s ability to source capacity automatically on relatively short notice impressive.
Pricing, of course, is another key variable in easily securing capacity, and FreightWaves wanted to know whether Uber Freight found itself paying more for trucks in order to find the sort of reliable, high-quality carrier needed to move freight without human intervention. The company said that while “rates play a factor,” the key is to get real-time market rates on lanes carriers prefer in front of them quickly. Unsurprisingly, keeping carriers moving on repetitive lanes makes it easier for Uber Freight to execute those loads in a touchless manner; it also helps carriers maximize asset utilization and reduce empty miles and wasted time.
“Touchless loads enable carriers to see business opportunities faster, and by helping them run and grow their businesses with more efficiency, we’re able to create a flywheel that enables high-quality carriers on Uber Freight loads time and time again,” the spokesperson said.
For Uber Freight to execute a touchless load through the entire lifecycle, it needs carriers to use its app to send tracking updates and upload proof of deliveries on time for invoicing. The spokesperson said that in markets where the company has built carrier density, carriers are typically highly engaged and experienced in using the app.
FreightWaves also asked Uber Freight about its current growth plans. Last year, Uber Freight expanded into Canada, Germany, the Netherlands and Poland, and in September 2019 announced a new Chicago headquarters that would house thousands of workers in a 463,000-square feet space. Inis January, the Chicago Tribune reported that Uber Freight was considering subleasing up to 14% of that space; Uber Freight acknowledged the report but said it had nothing further to share at present on Chicago real estate. Uber Freight did confirm that it would have a new presence in The Epic II, a 23-story tower that broke ground in November 2019 in Dallas’s Deep Ellum neighborhood. As of November, Uber planned to occupy the entire 470,000-square foot space in the new tower.
