Transportation Best Practices/Trends: Make me a match The truck-as-a-service market is set to hit $52 billion by 2025. Here’s what shippers need to know about this innovative, digital transportation strategy.

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By Bridget McCrea, Editor · May 9, 2019

Companies like Lyft, Airbnb, and Kickstarter use technology platforms to connect customers with service providers. And that same concept has made its way to the trucking markets, where companies like Convoy, Trans?x, Uber Freight and Loadsmart are using algorithms to pair carriers with shippers who need their loads delivered.

This is no passing fad either. According to Frost & Sullivan, the digital freight brokerage market (aka, “truck-as-a-service” or TaaS) is expected to surpass $52 billion in annual revenues by 2025—up from $11.2 billion in 2018. Thanks to that revenue potential, the research ?rm expects digital freight brokerage to be the biggest market segment, with the telematics devices segment growing from 25.7 million units in 2018 to more than 73.1 million in 2025.

“With the world’s leading truck OEMs like the Traton Group, Daimler Trucks and Volvo Trucks showing clear intention to adopt connected, autonomous, digital and smart services,” Frost & Sullivan analysts conclude, “TaaS is set to take off.”

Digital freight matchmaking A relatively new approach to trucking, digital freight matching uses technology to help truckers and couriers ?ll empty lanes—a service especially relevant for the 97% of carriers that operate 20 or fewer trucks. With digital freight matching, drivers can use a mobile app to match their truck with an available load.

Chris Cunnane (https://www.linkedin.com/in/chris-cunnane-3307148), senior analyst with ARC Advisory Group, (https://www.arcweb.com/) says there are two main reasons a driver may want to match his or her truck to a load: backhauls and less-than-truckload (LTL) deliveries.

“After a truck has delivered its load and is heading back to its origin point with an empty trailer, it can use digital freight matching to avoid deadhead miles,” says Cunnane. “On the LTL delivery side, here’s a driver with extra capacity—so why not ?ll that capacity and make the route more pro?table?”

In surveying the current TaaS environment, Cunnane says Uber is probably the most interesting company to watch right now. “Lots of companies want to be the ‘Uber of freight,’ but Uber has the name recognition and the money to invest,” he says. “In fact, Uber just announced that it’s expanding its trucking business to Europe.”

Truck-as-a-Service Bart De Muynck (https://www.gartner.com/analyst/50254/Bart-De-Muynck), Gartner’s research vice president, transportation technology, likes to think of digital freight matching, or TaaS, as the “digitization of transportation networks.” Much like we’ve seen with Uber for personal transport and Airbnb for property rentals, he says companies like Convoy, Uber, Trans?x, and Loadsmart are utilizing technology platforms to serve as matchmakers in the trucking world.

Pinpointing the advantages of working with these platforms, De Muynck says it all comes down to ease of use and the high levels of visibility that shippers get over their deliveries. The platforms are also helping to ease some of the pain of the capacity crunch and driver shortage, both of which are making it more di?cult to tender loads. Finally, from the trucking perspective, digital freight matching provides a more seamless way to pick, choose, and commit to speci?c load assignments.

The latter is especially useful for smaller, mom-and-pop trucking operations that used online bulletin boards (“load boards”), phone calls, e-mail and faxes to set up their routes. Others worked with freight brokers who, in turn, managed the shipper-trucker relationship. Neither approach is particularly e?cient in today’s fast-paced shipping environment, where customers see next-day and two-day deliveries as the norm.

“At many of these smaller trucking ?rms, one person is the driver, dispatcher, salesperson, and accountant,” says De Muynck. “These new technology platforms make it much easier for those truckers to ?nd loads, manage their businesses and get everything delivered on time.”

An evolving industry Like any promising new technology (think Napster for streaming music and how far we’ve come since then), the digital freight matching market has had its ?ts and starts along the way. “There have been a couple of very visible players, but they haven’t necessarily been the most successful,” says De Muynck, who points to Uber and Convoy as two companies that have signi?cant ?nancial backing, but didn’t really gain the market traction they expected early on.

“Out of their starting blocks, they really weren’t very successful and ran into di?culty gaining credibility with the large enterprise accounts,” says De Muynck. “Some of that had to do with the fact that they entered the freight market saying: ‘We’re going to disrupt the industry; we’re going to disintermediate the brokers.’ I think that was a wrong approach.”

https://www.logisticsmgmt.com/article/j.b._hunt_waymo_partner_up_for_texas_based_autonomous_driving_pilot
https://www.logisticsmgmt.com/article/bridging_the_ltl_expertise_gap_online_learning_evolves
https://www.logisticsmgmt.com/article/prepare_for_same_day_delivery_and_sell_more
https://www.logisticsmgmt.com/article/ftr_trucking_conditions_index_sets_new_record
https://www.logisticsmgmt.com/article/lm_podcast_series_the_state_of_intermodal_with_larry_gross
https://www.logisticsmgmt.com/topic/category/transportation
https://www.logisticsmgmt.com/article/bridging_the_ltl_expertise_gap_online_learning_evolves
https://www.linkedin.com/in/chris-cunnane-3307148
https://www.arcweb.com/
https://www.gartner.com/analyst/50254/Bart-De-Muynck
(/article/bridging_the_ltl_expertise Read the white paper to learn about the transportation industry’s ?rst online LTL curriculum with a path to LTL

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Fast-forward to 2019, and those digital freight-matching platforms are singing a different tune. “Uber has become a true, traditional broker and Convoy has changed its messaging,” says De Muynck. “At the same, the two other vendors that were ?ying under the radar—Trans?x and Loadsmart—have both been successful at working with large enterprise customers like Electrolux, AB InBev [which also works with Convoy], and Walmart. They’ve done pilot projects and are also now working together on an ongoing basis.”

Complementary capacity According to De Muynck, the digitization of freight didn’t turn out to be as disruptive to transportation as players like Uber and Lyft have been to the traditional taxi industry. “Although there are still taxis, they’ve lost a big part of their business to these new companies,” says De Muynck.

Thanks to the growing need for freight, the pervasive capacity crunch, and the trucking industry’s labor problem, digital freight-matching platforms are actually providing complementary capacity to shippers that require it.

“These new platf