Uber Freight moves into SaaS territory

Uber Freight moves into SaaS territory

Digitally native brokers have developed tools to optimize freight in their own networks, but allow shippers to manage loads outside that network places them in the category of more neutral technology providers. Photo credit: Shutterstock.com.

Truckload broker Uber Freight on Tuesday released two transportation management products aimed at large shippers that moves the company into the realm of software-as-a-service (SaaS) provider.

The first product, Uber Freight Enterprise, is “an extension of our self-serve shipper platform for [small and medium-sized businesses],” the company said in a statement. The tool allows large-volume shippers to source capacity through Uber Freight’s freight rate marketplace, while also getting visibility into truck estimated times of arrival (ETAs) and digital access to load documentation.

The second product, Uber Freight Link, allows large-volume shippers to use the Enterprise product to manage and execute loads outside the Uber Freight capacity network. This would represent a true move into SaaS in that it would allow shippers to essentially use Uber Freight’s software as their platform to manage all truckload freight.

That constitutes a significant evolution among digitally focused brokers and international forwarders, which have thus far set out to optimize shipment management within their own networks but have not yet provided tools to allow shippers to manage freight moving with competitors.

Uber Freight said Link enables large shippers to more broadly use its one-tap tendering, visibility, exception management, and digital documentation technology across their full carrier networks, instead of relying on one-to-one electronic data interchange (EDI) connections with carrier transportation management systems (TMSs).

The broker said, “major shippers have already successfully piloted these products” and that both tools are now available to North America–based shippers. 

Broker-TMS links becoming more important

Uber and other emergent, digitally native brokers have been busy the past year developing integrations with existing TMS providers. The broker Convoy, for example, announced in August a slew of TMS integrations with established providers such as Blue Yonder (formerly JDA Software) and more early stage providers such as Shipwell and SwanLeap.

Convoy said such integrations allow shipper transportation teams to instantly book backup and spot freight with its real-time rates and 100 percent coverage guarantee.

Uber Freight has itself been an active player in the TMS integration space, tying up such partnerships with Oracle Transportation Management, SAP, BluJay Solutions, and MercuryGate, among others.

The company said its new software products are intended to “complement shippers’ existing TMS and [warehouse management] solutions.”

The lines between brokers, TMS providers, and visibility providers are blurrier than ever. Large incumbent brokers such as C.H. Robinson, GlobalTranz, and XPO Logistics have long provided technology tools to their customers, and in certain cases, those products are used in a self-service manner by the shipper.

Visibility providers are also moving into the brokerage and TMS space by using location data to provide access to available freight capacity, either internally or as SaaS products to be provided to other brokers.

In reality, large brokers have to account for a wide variance of appetite for such tools among their customer bases, from shippers that want a traditional brokerage arrangement to those wanting a managed transportation services engagement where the broker provides and runs the TMS for the shipper to a more self-service environment.

In a 2019 briefing with JOC.com, for instance, GlobalTranz said it was looking to grow the customer base of users of its TMS as a standalone offering.

Shipwell provides an interesting example of how difficult it is to categorize newer entrants into the freight transportation space. The Austin, Texas-based company began as a SaaS company, intending to provide data analytics to domestic third-party logistics providers (3PLs). But it moved toward serving shippers with visibility, rating, system integrations, and analytics tools, landing a $35 million funding round in fall 2019.

Shipwell can appear different depending on the vantage point, offering capability that looks like a standalone visibility data provider, a TMS provider, a rate marketplace, and a business intelligence tool, or all of the above. Because Shipwell has a freight brokerage license — in order to offer users the ability to secure rates through the platform — the company has also been dubbed a broker by some in the industry.

The line between broker and marketplace has been especially hard to delineate among early-stage companies, with Convoy, Uber Freight, EmergeTMS, and Transfix all wanting to be defined as freight marketplaces at some stage of their development.

Questions of viability of the Uber Freight and Convoy model — using venture capital to quickly grow their business — have also dogged both companies.

“Since Q3 2018, [Uber Freight] had $1.396 billion in revenue and paid out $1.78 billion to carriers, meaning their investors supplemented $384 million,” Jonah McIntire, CEO of truckload optimization software provider TNX Logistics, wrote in an August newsletter. “But don't most businesses earn a profit? Yes, the normal brokerage gross margin is 12 to 15 percent. So, when Convoy or Uber Freight go below 12 percent, they are already giving cash to someone.”

Contact Eric Johnson at eric.johnson@ihsmarkit.com and follow him on Twitter: @LogTechEric.