Will the Sharing Economy Disrupt Trucking, Transportation and Logistics?

Article from Trucks.com

Written by Richard Metzler, chief marketing officer at uShip. This is one in a series of periodic guest columns by industry thought leaders.

If you have ever purchased something on eBay, hailed a ride from Uber or vacationed in Airbnb lodging, you’ve participated in the sharing economy. The commonality with these on-demand companies is that customers transact online or through an app, but the service itself is fulfilled offline. A growing number of on-demand delivery start-ups —Instacart, Postmates and many more — have logistics at the heart of their value proposition. You want that meal, chinos or bottle of Smirnoff now? It’ll be in your hands in an hour. This pledge for instant gratification is leaving many in the shipping and logistics industry asking, “Will the sharing economy and this recent need for speed disrupt traditional transportation and logistics as we know it?”

The answer lies in how on-demand, two-hour delivery stacks up to time-tested logistics models that are the cornerstone of the biggest global companies: FedEx, UPS, DHL and others. In an era of instant gratification, old-school logistics are still what bring the bottom line — and on-demand start-ups would be wise to heed their experience. In other words, Internet/app economics and logistics economics are at odds with each other. And I’ve got $100 of my own money — and over 30 years of experience to back up my bet — that I know which system is going to come out on top.

How did we get here?

Every single industry is churning out the Uber of X, attempting to emulate the ride-sharing company’s success. These new businesses include Instacart’s groceries services, Luxe’s on-demand parking and valet, BloomThat’s flower delivery and the now-defunct HomeJoy’s maid services. Caught up in the wave, as well as a fear of missing out on the next Uber, venture capital firms last year pumped more than $17 billion into 214 companies that have some kind of on-demand delivery component. The logistics industry alone garnered more than 13 percent of all VC investments, with a disproportionate going to Uber. In fact, a significant portion of investment has gone into companies big and small that claim to be the “Uber of freight” — attempting to instantly match loads with trucks through the use of apps.

But after a giant — and irrational — influx of investment “exUberance” into physical delivery and logistics companies, the bloom is off the rose. This is making B-round investments extremely tough to come by for all but a few that remain in the game by adapting their methods to what consumers really want.

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