Online marketplace uShip, which is doing for shipping what eBay did for sales, is moving deeper into the world of industrial transportation.
The company is letting freight brokers leverage uShip’s spot market exchange to connect with thousands of motor carriers already registered with uShip and rated by its customers — typically individuals or small businesses with something to ship.
“In the past six years, we’ve built a robust exchange platform for all different kinds of freight, but we’ve focused mainly on the retail side of the transaction,” uShip CEO Matt Chasen said. “Now we’re introducing brokered freight into the marketplace. “It’s a natural evolution for us to expand from the retail side of the business to the broker or wholesale side.”
Chasen, who founded the business in 2003 after struggling to find someone to haul an antique dresser from Ohio to Texas, launched uShip into the world of brokered freight at the Transportation Intermediaries Association’s annual conference in Orlando, Fla., this month.
For freight brokers, uShip can be an added source of capacity as capacity is getting thinner on the ground and much more expensive. The company has more than 200,000 freight brokers and truckers on its platform. Until this month, those customers could only bid on shipper-posted freight. Now brokers can post loads as well.
The company also will let freight brokers and third-party logistics companies develop their own auction-style exchanges using uShip’s technology.
“It’s a hosted, software-as-a-service private spot market exchange,” Chasen said. “It’s a better way for freight brokers and 3PLs to manage their existing carriers.”
Although it sounds similar to a traditional load-matching service, uShip employs a very different model, Chasen said. It developed as a consumer-oriented auction service where individuals or companies put items to ship up for bidding.
Auto transport is uShip’s biggest category, followed by household goods, but its customers have used the platform to find carriers to haul everything from boats to furniture to, on one occasion, a herd of domesticated whitetail deer. Many of the trucking companies using the site are small carriers looking to fill backhauls.
The company has more than a million customers, or “shippers,” and grew from $600,000 in revenue in 2006 to $5.4 million in sales in 2009. Most of its shippers are individual consumers, but a growing number are small businesses, Chasen said.
“We’ve been growing up-market to bigger shippers,” he said. “About 30 percent of our users are businesses, and half our freight is from businesses. We’ve also been evolving toward more repeat shippers,” rather than customers who have a one-time special need, such as moving a motorcycle or a pet or an armoire.
The company added several features for freight brokers. For one, only truckers verified by CarrierWatch can bid on brokered freight. That freight also will have a fixed offer price from the broker, although carriers still will be able to bid, Chasen said.
The transaction is completed online, from shipment tendering to payment, and there are no fees for brokers. Carriers pay a transaction fee. uShip also allows users to review and rate carriers, providing an eBay-like feedback system for users.
Chasen expects the service to become more popular among business shippers and freight brokers as truck capacity gets tighter.
“Last year we saw a tightening of capacity on our site for the first time ever,” he said. “It’s rebounded in the first quarter, so we think carriers are putting more capacity back in.” That also could reflect increased flow of business to his platform as capacity tightens elsewhere.
As an auction site, uShip isn’t a broker itself any more than eBay is a retailer — although some of its functions are similar. “We go after retail customers, so we see brokers in some marketing channels as competitors,” Chasen said. “But at the end of the day, brokers are some of our top customers,” he said. “We can generally deliver them more customers than they can get through marketing themselves.”
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