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Uber Freight announces Canada and cross-border expansion

(Photo: Jim Allen/FreightWaves)

Uber Freight, the digital freight brokerage division of Uber Technologies (NYSE: UBER), announced on October 29 that it has expanded its operations into Canada to move domestic and cross-border truckloads.

The Canadian market is Uber Freight’s first international expansion in North America. In addition to the United States, the digital brokerage operates in the Netherlands and Germany and last week expanded into Poland.

To facilitate its Canadian and cross-border marketplace, Uber Freight released a Canadian version of its app in both English and French. 

Canada is the United States’ second-largest trading partner, and last year more than $617 billion in goods crossed the border between the two countries. The U.S. and Canadian economies are tightly connected by a dense web of transportation infrastructure including the Great Lakes, highway bridges and railroads. The vast majority – nearly 90% – of the Canadian population lives within 100 miles of the U.S. border, which is also the world’s longest undefended border.

For those reasons, Uber Freight’s expansion into Canada makes a lot of sense and should be accretive to Uber Freight’s existing U.S. customer base and capacity network. 

FreightWaves spoke to Bill Driegert, head of operations at Uber Freight, about the expansion into Canada and Poland.

Driegert said that Uber Freight learned how to solve challenges around currency, regulations and language by going into Europe first. The decision to go into Europe before Canada was driven by two reasons. The first is that Uber Freight’s customers asked them to operate in Europe. The second was that entering the Netherlands and Germany gave Uber Freight a foothold into the larger European market, and the experience gained there would make subsequent smaller expansions go more smoothly.

“By going to Europe we unlocked a whole region,” Driegert said. “If we had gone to Canada first, we wouldn’t have solved the challenges of going to Europe.”

For cross-border loads, Uber Freight plans to work initially with carriers that already operate cross-border, Driegert said. He expects the marketplace eventually to evolve the way it did in the United States, with capacity migrating toward the freight on Uber’s platform.

“What we’ve seen in the U.S., we expect to play out in Canada as well,” Driegert said. “By making freight more accessible, carriers can expand their operations and look at more options, but carriers have to make the decision.”

FreightWaves wanted to know about Canada-specific carrier requirements, and specifically whether Uber Freight would be willing to use carriers who only had facility insurance, a kind of insurance of last resort that has allowed low-quality Canadian carriers to continue operating commercially. 

A spokesperson for Uber Freight said that “on carrier requirements, Uber Freight has proactively discussed regional plans with local policy stakeholders, associations and governing bodies to scale responsibly in the new market, and provides clear information within the platform to allow carriers to stay compliant.”

Driegert would not comment on or confirm Uber Freight’s plans for Mexico, though we note that recent hires in Chicago include brokerage operators who specialize in Mexican cross-border logistics. 

Uber Freight’s early customer base in Canada looks similar to its shippers in the United States, with a focus on food and beverage, consumer packaged goods and retail. Martin Brower, a large supplier of fast food restaurant chains, was one of Uber Freight’s first shipper partners in Canada.

Driegert also discussed Uber Freight’s decision to expand into Poland. Poland and Eastern Europe more broadly is a rapidly growing source of freight and carrier base, Driegert explained, and Poland in particular is serviced by many small fleets run by entrepreneurial, tech-forward young people. He said that in Europe, Polish drivers have a significant presence in international freight.

Many of the truck drivers running lanes in Germany are Polish, and it is likely that Uber Freight had to hire a number of Polish language speakers in order to operate in Germany, which is Europe’s largest economy and domestic freight market. From there, it would have only made sense to expand to Poland, a huge source of trucking capacity that serves all of Europe.

“The biggest freight corridor across Europe is northeastern France into northern Germany, which goes through Rotterdam, and then into Poland,” Driegert explained. “We benefit in Europe because it’s a common market and the barriers to international freight are fewer and fewer. There are also very strong local domestic markets, especially in France and Germany, with local carriers.”

Uber Freight has effectively connected Europe’s largest port (Rotterdam, which had a record throughput of 14.5 million TEUs in 2018) with the continent’s largest freight market (Germany) and its largest source of trucking capacity (Poland).

Uber Freight has learned what distinguishes the various European markets from each other: in Germany, for example, carriers tend to be a little larger and there is less fragmentation than in the United States; owner-operators are typically leased on to larger fleets. The fleet management platform that Uber Freight rolled out in the United States in August helped the digital brokerage scale in the German market.

The Netherlands has a vibrant truck customization scene and there’s a great deal of pride in the industry; in Poland, truck fleets of one to 10 trucks are common. The visibility solutions market is also very different from the United States – in Europe it’s very fragmented and divided between more than 350 providers. 

“It’s a fast-evolving environment,” Driegert said.

Still, what surprised Driegert was that the fundamentals that motivated carriers to join the platform in North America and Europe were largely the same – carriers want to get paid quickly, they want control over their routing and they want transparent price discovery. 

“One of the surprises was how open and tech-forward carriers were,” Driegert said. “They all want easier access to freight. They want to keep their trucks moving, get paid fast and have that visibility.”

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John Paul Hampstead

John Paul conducts research on multimodal freight markets and holds a Ph.D. in English literature from the University of Michigan. Prior to building a research team at FreightWaves, JP spent two years on the editorial side covering trucking markets, freight brokerage, and M&A.