The end of freight brokerage as we know it ? [EN]

Article first published on 03/05/2019

Not yet operating in Europe, but very active in the USA, #uberfreight and more recent #amazon are trying to disrupt the freight brokerage market. Taking out the intermediate both platforms bring together shipper and carrier plus all technologies you'd expect to get from companies as Uber and Amazon. Will this mean the end of freight brokerage as we know it ?

Just a couple of weeks ago, Uber announced it's imminent arrival in Europe, starting in The Netherlands to further deploy their platform into the rest of Europe in the coming months.

Whilst Uber seems to be ahead of Amazon (as Amazon only launched their platform in the USA end of April 2019) and no plans or information are currently known when Amazon will enter the EU market. Amazon is announcing offering transport of full truck loads without margin.

Making the costs of shipping 30% cheaper for the shipper than he is currently used to.No mobile phone app for Amazon as of yet, but we can imagine the simplicity of Uber's freight app if it is anywhere near their other app's. This means that any potential shipper doesn't need any knowledge about transportation, doesn't need to worry about his carrier network or volume consolidation, as it's "idiot proof". It's not just about taking out the middle man, but adding tech into the chain (the shipper can follow it's cargo in real-time, send text messages to the driver and instantly be informed of arrival, demurrage / damage), so what would be the added value of a today's freight broker ?

As for Amazon, giving its normal go-to-the-market strategy, e.g. get as much market share as possible in as little time as possible by reducing the rates to than (when market share is big enough) increase prices slowly, it will be a hit in the USA. As a shipper you can save up to 30% on your transportation costs, at least that is if you ship FTL's and not have any part loads / groupage or parcels. Amazon uses its already very extended carrier network to optimize flows and that's the main reason why they can offer such low tariffs.

With the announce of Uber Freight moving into Europe, freight brokers should be wary that it is competition and should not underestimate the disrupting factor of these platforms and / or applications. It will put constrains on current carrier relationships, rates, used technologies etc.

For as it stands at the moment there is still opportunity to co-exist, as groupage, part loads and parcels are currently not at stake, and by embracing these platforms rather than fear them, freight brokers can take the advantage.

They'll get on a silver plate the full stack of technologies used by these platforms, no need to invest to compete, no extra costs. You could actually use them to forward more freight, increase throughput and earn extra revenue. All that whilst offering the same tech to their current customers ....

It will be interesting to follow how this will evolve, but it will definitely disrupt the current market.

Source: https://www.supplychaindive.com/news/amazon-digital-freight-brokerage/553661/