Uber Inc. has floated out a new company called Powerloop, an affiliate to Uber Freight, which would rent out trailers to carriers and enable them to participate in a re-envisioned trailer pool model. FreightWaves caught up with Max Pike, strategy lead and Kofi Asante, product strategy at Powerloop to discuss the prospects of the new company and what it entails to the trucking ecosystem.
“We had looked across the industry and identified pain points, that made it clear that shippers were less effective when they were dependant on the driver to show up with the trailer in what is called the live load,” said Pike. “A live load is when the driver shows up with the power unit and the trailer, and the shipper facility loads the empty trailer. The same thing happens on the receiver side, where they live unload the trailer. This is not very efficient for the shippers.”
On the other end of the spectrum, the carriers also suffer from inefficiency woes, as they rack up many hours at the shipper’s facility, waiting for loading and unloading. This is especially true of smaller fleets and owner-operators, who do not have the wherewithal to buy more trailers, nor have the connections to secure partnerships with the big shipping brands that work with drop trailers and carriers supplying power-only capacity.
Powerloop offers a solution to this predicament, but allowing carriers with power-only capacity registered in the Uber Freight application to rent trailers and connect them with shippers who are into the trailer pool model. This way, carriers irrespective of their size can haul more loads, thus lowering the barrier to entry for trailer-pool programs.
“We lease trailers from our third-party partner and then rent them out to carriers in our network,” said Asante. “A carrier can rent trailers as needed to fulfill their load requirements.” In general, the number of trailers that a carrier can rent at one time is generally capped on the number of power units they have.
One of the reasons for Powerloop branching out of Uber Inc. is to exclusively tackle the capacity crunch that has taken hold of the industry, particularly after the enforcement of the ELD mandate. “There has been a limited amount of total available driver hours, and there has been an increased focus on the shipper and carrier side to have the entire freight system operate more efficiently,” said Pike.
“We wanted to understand how the drop trailer programs worked historically. What we found was that power-only or drop trailer operations had been managed by asset owning large carriers who had power units with trailers, and would drop these trailers at the shipper’s facility on a more dedicated basis.”
The problem though was that drivers who are sent to pick up the trailers frequently drive back empty, thus ballooning up the transport costs for shippers. For instance, if a shipper is moving trailers from Dallas to Houston, they would also have to pay for the deadhead miles while the trailer returns to Dallas from Houston.
“We wanted to design a flexible and dynamic system where we could ensure that these trailers would be loaded in both directions. The carriers that participate in this program enjoy it - they pick up one of the pre-loaded trailers and move them from one facility to the other and there is another load there for them to bring back,” said Pike. “They are moving around the network in round trips and spending all of their available hours in a day moving freight and getting paid.”
While developing the Powerloop solution, the team tapped into the resources of Uber Freight, and interacted with a lot of traditional brokerage companies and captured their feedback, which was then integrated into the application - all in real time. “In a typical drop freight scenario, a lot of the power-only loads are one-way. We have now made sure to be able to provide round trips for carriers. This is a big one, and there are a number of situations where our carriers are able to interface with our team daily, so we are able to make those changes quicker,” said Asante.
Powerloop had an initial run done with Uber Freight drivers, and Pike explained that the feedback has been extremely positive. “One carrier who has been working with us had initially been just an owner-operator, but he has since then moved everything over to this system of power-only loads, utilized the power loads trailer rentals, and has been able to actually buy a few more power units and move from being an owner-operator to a small fleet,” he said.
Powerloop works with Fortune 500 companies, and has helped them gain flexibility for their shipping needs, especially during the supply crunch times. For the carriers, renting out trailers for loads would mean lesser empty miles, which incidentally also helps with reducing their carbon footprint. At the end of the day, the carriers can do what they do best - haul loads without having long detention times while maximizing efficiency behind the wheel.