Status of On-Demand Trucking
On-demand trucking is the process of finding capacity for shipments “on-demand,” rather than through negotiated agreements ahead of time. When a shipper leverages a load matching platform to find last minute truckload rates, for example, that is what is known as on-demand trucking. This type of trucking helps carriers fill empty miles and shippers find the trucks they need when their regular lanes don’t suffice.
The U.S. transportation market is quickly ramping up technology-enhanced options to move products, goods and people in an effort to keep up with demand. Consumers are accustomed to free two-day shipping and detailed tracking information to follow their package every step of the way.
These expectations are becoming increasingly hard to reach as Covid-19 disrupts supply chains throughout the world. Businesses are struggling to adapt to new rules and regulations, shipping delays and material shortages. Consumers are stocking up on essential products like toilet paper, hand sanitizer and flour, making it increasingly difficult for stores to keep their shelves stocked.
Any business looking to fulfil these requirements and navigate through changes brought on by the pandemic need to outperform their traditional operations. On-demand trucking is a viable solution to meet all of these needs. Trucking companies can use it to find additional product that needs to be moved in the area to eliminate wasteful empty backhaul and businesses can find reliable coverage when they need it most. It’s a win for everyone involved!
What’s driving the growth of U.S. on-demand trucking?
It’s no wonder there’s such a big demand for on-demand trucking. Unpredictable market conditions, changing import/export levels and new technology have all combined to speed the shift to on-demand trucking:
- •Volatile market conditions. In recent years, lack of trucks and a scarcity of drivers-for-hire have combined with high freight demand to severely restrict U.S. trucking capacity/availability.
- •Electronic logging devices (ELDs). Federally mandated ELDs closely scrutinize and monitor drivers to be sure they follow hours of service (HOS) laws, which can impact driver productivity.
- •Rising spot and contract rates. Trucking rates continue to rise while capacity remains tight, driving some shippers to move portions of their freight to intermodal transportation or “rail.”
- •Trucking apps. New apps are taking center stage: Uber Freight’s app operates much like its ride-sharing service. Both Convoy and Amazon have apps that target on-demand freight, as well, matching trucking companies with shippers who have freight that needs to move. This “at-your-fingertips” flexibility means shippers have flexible options for meeting their trucking needs; carriers can choose higher- and faster-paying freight.
- •Rising interest rates. Higher rates mean higher costs for transporting goods, so shippers are best served by choosing their best transportation options.
How does on-demand trucking work?
On-demand trucking has a bright future for freight and transportation management and load matching:
- •Provides a broad network of real-time carriers. This is not the old days when you had to contract with carriers to lock in capacity months or even years in advance for every single one of your lanes. On-demand trucking apps and spot markets let shippers connect with thousands of independent “owner-operator” drivers with empty truck space to sell in real-time to cover last minute or unusual loads.
- •Leverages technology to handle settlements. Real-time freight visibility is important, of course, but it’s just as important to ensure driver certification and timely, accurate freight pick-up and delivery and settlement processing. Having a transportation management system (TMS) connect directly to the asset (driver) through a platform that provides access to drivers and ensures drivers’ certification and compliance–as well as manages the settlement through an Uber-like payment configuration–can be a great way to simplify and streamline your business.
- •Focuses on getting shippers normal or “specialized” capacity on a transactional basis. Unlike dealing with large, asset-based carriers, the Uberization of freight means shippers can connect with drivers who offer capacity and even specialized freight treatment—like refrigeration–on back-hauls, making it a win-win for shippers and carriers.
On-demand trucking offers shippers a proven and flexible way of conducting their business, with real-time visibility over truck assets and a simpler way to access settlement, liability and other functions via a single interface. Read how recent innovations in web service technology mean shippers can get direct carrier rates, POD and BOL images, online shipment scheduling, and real-time status updates from all carriers on one platform.