Bill Driegert believes that the coronavirus pandemic is accelerating an irreversible digitization of the transportation and logistics industry, and that shipper behavior, technology adoption and network design will enter a “new normal” after the crisis.
Tuesday afternoon, Driegert, Uber Freight’s co-founder and head of operations, appeared on FreightWavesTV during a wide-ranging coronavirus update for the transportation and logistics industry.
“It’s a once-in-a-lifetime event that has been incredibly disruptive, and there’s a lot of uncertainty,” Driegert said. “We’ve seen shippers change plans on a weekly basis.”
While Uber’s Rides business is down 80%, the Freight business was in a unique position to respond to the crisis. Since the crisis began, Uber Freight has moved more than 30,000 relief loads, a portion of which were moved for zero profit. For specific humanitarian projects, like moving personal protective equipment (PPE) with Salesforce, Uber Freight has even covered the cost of transportation.
Addressing Uber CEO Dara Khosrowshahi’s letter to employees and the notion that Freight was being “reevaluated,” Driegert emphasized that nothing was changing about Uber Freight’s product road map or service offering, and suggested that the impact to Uber Freight was about further adjusting its path to profitability.
Driegert said Uber Freight’s technology platform has allowed it to adapt quickly to the dynamic freight environment, which saw truckload volumes spike to historic levels in March, collapse through mid-April, and then start to normalize as businesses and communities return to work.
Uber Freight’s platform designated which loads offered to carriers qualified as coronavirus relief under the Federal Motor Carrier Safety Administration’s guidelines, which waived hours-of-service regulations for qualifying freight. That allowed carriers to make quick, informed decisions about market pricing and their own productivity, and empowered them to help out with relief efforts.
On the shipper side, Uber Freight’s recent work in integrating its application programming interfaces (APIs) with important platforms like Oracle and BluJay has paid off. APIs allow software to pull information from databases over the web in an automated way; customer calls into Uber Freight’s market pricing APIs have increased 150% since the pandemic began. Shippers want instant rate data and instant execution, which has become more important now that they have less clarity into consumer demand and their own production capacity.
“We don’t expect markets to return to the same place they have been before,” Driegert explained. “Technology expectations have changed, networks have changed, and we’ve seen fundamental changes in how shippers operate in the market. We’re going to return to a new normal.”
Driegert said that while no one could predict exactly where freight markets would head from here — though he did note that volumes in Uber Freight’s European business, which operates in the Netherlands, Germany and Poland, are “normalizing” — shippers are undertaking strategic reviews of their supply chains.
“All of our shippers and those who had extreme disruptions, everybody is looking at that right now: making changes in sourcing strategies, where they place facilities, and their network design and topology,” Driegert said.
As for the rest of 2020 and 2021, Driegert said he expects Uber Freight’s tailwinds to continue blowing: changing shipper expectations and volatility-driven demand for data and instant execution.