The US trucking business is an unglamorous affair with lots of moving parts. Now a startup wants to automate the process of moving freight around this vast, almost 10 million kilometre country, and reap the dividends of what it reckons is a $700bn market.
San Francisco-headquartered FR8 Revolution has developed a cloud platform “to change how that market operates”, says Matt Kropp, CEO, thereby modernising a patchwork industry of shippers, carriers, brokers and truck operators that is currently largely dependent on phones, paperwork and as hoc decision making.
But Kropp rejects the notion that this is another ‘Uber for x’ example.
“It’s too simplistic to say this is Uber for trucking,” he says. “The Uber problem is one of ‘I need a car now and give me the closest car’; the shipping one is ‘I need a truck at a certain time with a certain load going in a certain direction, plus there are contractual relationships’. Then there’s the Big Data element of understanding traffic patterns, predicting where you need capacity and optimising routes.”
Kropp and CFO Jan Gildemeister each have over 10 years’ experience in trucking and logistics and say they want to create the “next evolution of trucking technology”. Kropp says that truck fleet operators have tended to focus on improving fuel economy, aerodynamics and other elements but believes that, by taking a fresh look at the logistics of the industry, much bigger savings are to be had.
“It’s an absolutely enormous industry and it’s very fragmented so you have a wide range on logistics firms and shippers. Ten or 20 of the big players [running fleets of trucks] are quite sophisticated and think about Big Data but those with up to 300 trucks might have one or two IT guys. They might have tools for scheduling optimisation but don’t really know how to use them. The smallest players, from one man to 20 trucks, have very little technology and it’s the same thing on the shipper side. Even the biggest companies have a tendency to work with midsized carriers at times and right now there’s a mismatch in how they interface with each other.”
FR8 Revolution’s answer is to provide primarily small and medium-sized players with tools via a free platform it says will provide UPS-class tracking and help make spare capacity available for booking. The result, it says, will be greater predictability, reduced wait times, improved scheduling, better utilisation and lower carbon dioxide emission levels.
“The littler guys don’t have the IT capabilities the big guys do, and we want to provide them for free and provide a marketplace where we act as a broker and take a cut on the fees.”
Could FR8 Revolution possibly harness the data it collects to provide new insights to guide best practices? It’s possible, says Kropp, but he’s very hesitant.
“I want to be careful and we need to be sure were garnering trust. It’s a very competitive industry and a lot of players are careful about whom they trust. We get data on traffic by lane and could provide them with analytics without exploiting it all.”