In this week’s edition, technological disruption is officially happening, J.B. Hunt shows Silicon Valley what real innovation looks like, and Uber’s IPO gets rejected. To get future editions of Freight News in Cartoons sent directly to your inbox, subscribe here.
On the heels of FreightWaves’ Transparency19 conference, there’s been some interesting coverage of disruption in the freight industry.
Brian Aoeah wrote a particularly clear-minded piece on how the freight brokerage industry is currently undergoing both supply-side (changes in how suppliers satisfy demand) and demand-side (changes in customer demands and expectations) disruptions. In particular, his take on digital on-demand freight marketplaces is worth thinking about:
“Conventional wisdom among industry professionals is that the trust relationship between shippers, carriers and brokers cannot be replicated through software. I am not so certain. Carriers and shippers have the fundamental need to increase throughput, increase efficiency and improve profit margins. The new entrants can gain market share by proving that they can satisfy those fundamental needs better than their incumbent counterparts on an ongoing basis.”
10xLogisticsExpert also wrote an interesting piece that sees JB Hunt’s “trucks and clicks” approach eventually winning out over Uber Freight’s notions of an “on-demand” industry.
Though talk of disruption can often feel hard to grasp, some recent announcements show what innovation looks like in the real world.
One clear example is J.B. Hunt’s new 360box drop-and-hook trailer program, which will give shippers the ability to reserve trailers from a pool and carriers the ability to bid on moving those trailers through J.B. Hunt’s app. At Transparency19, Shelley Simpson, J.B. Hunt’s COO, talked more about their success over the past decade, tripling in size to become a billion-dollar brokerage and 3PL, fostering a culture of innovation, and transforming into a truly mode-agnostic capacity provider.
“Saying you want to start a brokerage company within an asset-based organization was like cussing in Sunday school,” Simpson said. “It was so counter-cultural to who we were and what we knew. We had to spend so much time communicating to help our people understand ‘the why.’ But if you can paint a picture where your people can see that it’s good for our company drivers and it’s good for our contractors, you can illustrate there’s benefits on both sides.”
Some other notable examples include FreightWaves’ own product SONAR 4.0, Flexe’s on-demand approach to warehousing, Domino’s continued innovations in pizza delivery (this time with AI), and, of course, no list of disruptors is complete without Amazon (this time with their freight brokerage and ambitions of disintermediation).
Uber’s Initial Public Rejection
Finally, as you’ve likely already heard, Uber’s IPO didn’t exactly go to plan. At its peak, investors were valuing the company at $120 billion. In its first few days of trading, it’s been valued at closer to $60-80 billion. If you’re interested in more of the details, FreightWaves’ Vishnu Rajamanickam did a great job breaking down its history, investors, rivalry with Lyft, and the concerns around profitability.
To round out the past couple weeks, Cruise, the autonomous vehicle startup, raised another $1.15 billion to accelerate growth and reach a valuation of $19 billion, while logistics real estate prices continue to climb, with global investment in 2018 in logistics real estate totaling $153.6 billion.
With change in the air, it’s hard not to be excited about the future. But I suppose the important bit is to not allow it to disrupt your sleep.
Steele Roddick is a Content Specialist at Microdea where he creates content that helps transportation companies drive their business forward. He’s endlessly fascinated by technology trends, chess, and discovering new places to travel with his wife.