DC Velocity - September 2018

16 DC VELOCITY SEPTEMBER 2018 www.dcvelocity.com newsworthy

ers. The “Uber Freight for Shippers” platform offers rate quoting,
load building, load tracking, and document management, Uber Freight
Product Manager Stefan Sohlstrom said in an interview.
Uber Freight says it is initially launching the platform to support busi-
ness on 53-foot, dry van, full-truckload shipments. The unit intends to
expand the product to include additional modes in the future, according
to Sohlstrom.
Uber Freight is targeting the platform toward the lower end of the
market, where the majority of mid-market and small and medium-sized
shippers still rely on some combination of spreadsheets, e-mails, and
phone calls instead of a central booking system, Sohlstrom said.

“Most of our external product focus has been on the carrier side, with
an app to build up our carrier network,” said Sohlstrom. “But we’ve also
been meeting with shippers to learn how they ship and what their pain
points are. For example, they really dislike when brokers [give] them
one quote, but a couple hours later, they say it is no longer available.”
Uber Freight acknowledged that there are other freight-matching
products that directly link shippers and carriers. However, it said its
version would support more granular
visibility than comparable platforms
provide because it will leverage its
connection to its carrier network to
create a tighter integration between
the shipper and carrier segments.

That visibility will let shippers track loads with global positioning system (GPS) data and view time stamps from every event along the load’s trip, instead of relying on carriers or brokers to share that information, the company said.

Asked whether the platform would divert business from Uber Freight’s brokerage operations by putting shippers directly in touch with carriers, Uber executives said that both products were part of a larger scheme. “The shipper platform won’t take anything away from the rest of the business; it’s simply another part of the Uber Freight ecosystem that helps us seamlessly connect the best drivers with the best loads,” the company said in an e-mail statement. “Uber Freight is essentially building ‘Uber for Trucking,’ which means improving all sides of the industry.”

THIN MARGINS

Uber Freight, which launched in May 2017 in Texas, now operates
nationwide, the spokeswoman said. Load volume is doubling every
quarter, she added. The unit has offices in San Francisco and Chicago.

However, an industry source said the unit is generating only 3 percent gross margins on annual revenue of about $500 million, an unsustainable ratio. The source, who works for a logistics technology company, said that more than a dozen Uber Freight employees, including executives, had applied for jobs there in the past two weeks. The Uber Freight spokeswoman would not comment on the unit’s profitability position.

—Mark B. Solomon and Ben Ames

UPS Inc. has launched a digital platform to match merchants’ warehousing needs with available capacity, becoming the latest, and by far the biggest, player in the nascent but high-potential field of flexible warehousing.

The platform, called “Ware2Go,” is designed to provide small to mid-sized e-commerce merchants with warehouse and DC space when they need it and to give warehouse operators a channel to fill space that might otherwise sit vacant. According to virtually every data point, industrial vacancy levels are at or near all-time lows. But those numbers track space that has been leased, not space that is actually used. Flowspace, a recent entrant in the segment, said earlier this year that of the warehouses that have listed on its platform, about 20 percent of their space, on average, is vacant. UPS’s own research has found that many warehouse operators have difficulty leasing smaller amounts of space and thus, will let the space sit vacant.

Under the program, UPS will vet the warehouse operator’s capabilities before allowing it to join. Merchants will sign one contract with the warehouse unit regardless of the number of warehouses they use.

UPS will manage all billing and payments between the merchants and the warehouse operators. The Atlanta-based shipping and logistics giant will also negotiate lease terms with the warehouse operators. The platform will match demand with supply based on information provided by merchants about their products, space requirements, and regional delivery needs.

The merchants will retain ownership of their goods. UPS will handle all shipping with guaranteed two-day deliveries, and its cloud platform will provide merchants with end-to-end visibility of the order fulfillment process.

Ware2Go was actually launched in July after an incubation process with BCG Digital Ventures, an Atlanta-based corporate investment and incubation firm that owns a minority financial stake.