By Bill Holloway
Rapid growth in the use of mobile apps is changing the trucking business and could bring congestion reduction benefits as well as efficiency gains. As noted in Intransition Magazine, the way truckers with empty trailers find available loads has come a long way from notes on truck stop bulletin boards. In 1978, Dial-A-Truck debuted a system for displaying notices from shippers and carriers on TV monitors. Over the past few years smartphone applications devoted to these types of one-time moves (known as the spot market) have grown rapidly, bringing new flexibility and efficiency to trucking.
The flexibility brought by these applications also provides a backup when scheduled movements are disrupted. For example, during the “polar vortex” in 2014, the spot market spiked as carriers previously contracted to haul loads fell behind and shippers had to make new transportation arrangements on the spur of the moment. Many of these connections were facilitated by smartphone apps.
These trucking apps also boost efficiency by reducing the number of miles driven by empty trucks and by reducing fees paid to freight brokers. Carriers want to reduce the number of miles that their trucks drive empty—and not making money—as they move between delivery points and their next pickup. Smartphone apps that connect drivers to available loads nearby reduce the total number of trucks on the road and reduce the wasted mileage driven by empty trucks on their way to the next pickup. These apps also reduce shipping costs by dramatically lowering the fees paid to the middlemen who arrange the shipments. According to Dan Lewis, the CEO of Convoy—maker of the app by the same name—who was quoted in a recent Forbes article, the freight brokers that act as middlemen connecting shippers to carriers take fees of up to 45 percent of the cost of the shipment. While Convoy and other apps still charge a fee, they can charge far less than freight brokers by relying on an Uber-type algorithm that offers drivers available loads, which they can accept or reject immediately, with no haggling.
Apps like these could be particularly useful for first-mile and last-mile moves because small packages can be carried in passenger cars, vans, and light trucks that can be operated by drivers that lack commercial driver’s licenses and/or work part time using their personal vehicle.
Bill Holloway is a Transportation Policy Analyst at SSTI.
By Bill Holloway