Join Transform 2021 for the most important themes in enterprise AI & Data. Learn more.
Roughly 80% of all cargo in the U.S. is transported by the 7.1 million people who drive flatbed trailers, dry vans, and other heavy lifters for the country’s 1.3 million trucking companies. The trucking industry generates $726 billion in revenue annually and is forecast to grow 75% by 2026. Even before the pandemic, last-mile delivery was fast becoming the most profitable part of the supply chain, with research firm Capgemini pegging its share of the pie at 41%.
To tap into this, in 2017 Uber launched Uber Freight, the company’s grab at the $8.1 trillion global logistics transport industry. Uber Freight connects carriers and drivers with companies that need to move cargo. When a business schedules a delivery through Uber Freight for shippers, they get prices upfront in the Uber Freight app. Customers are matched intelligently with carriers in Uber’s network and see a real-time, mutually agreed-upon quote that’s determined by market conditions and “other factors.”
Uber Freight customers can book loads and reloads together to make it easier for carriers to travel more efficiently. For recurring shipments, the recently introduced Lane Explorer feature leverages machine learning to assess dynamic factors and generate rates for each of the next 14 calendar days out.
In a conversation with VentureBeat, Uber Freight marketplace head Bar Ifrach spoke about the logistics and freight challenges and opportunities brought about by the COVID-19 pandemic. While some shifts in demand were more predictable than others, such as the uptick in hand sanitizer shipments, others, like the explosion in home goods purchases, required a watchful eye on the part of Uber’s engineers to ensure the algorithms powering Uber Freight remained stable.
Starting in March, when the pandemic was just taking hold, Ifrach says there was strong demand for consumer products and medical equipment, followed by sudden shortage shocks. In the second half of 2020, demand for shipment was still increasing — but supply was becoming less efficient.
“The freight network is never fully balanced, but it has some organic balance to it, meaning that when a truck goes from point A to point B, there’s some chance it will come back from B to A full of merchandise,” Ifrach explained. “The industry average is about 79% of the time a truck is full. But what we were seeing early on was that there was a really big increase in imbalance.”
Even in the face of instability, Uber Freight’s algorithms remained remarkably consistent, according to Ifrach. He explained that Uber uses both internal and external data to train the algorithms, as well as internal tools to monitor them and guarantee they remain adaptive to change.
Load bundling increased on the Uber Freight platform by 100% in April and May, according to Ifrach. This led to a 22.6% reduction in empty, or non-revenue, miles for drivers using bundling. As an added benefit, because it gave drivers the option to book loads and reloads together instead of booking each load separately, Uber said it likely helped reduce greenhouse gas emissions from trucks on the road.
“Many of our algorithms are looking at what’s happening [in real time] and are able to look at all sorts of adjustments to the baseline,” Ifrach said. “When there’s a very strong impact in a particular region, it’s this ability to adapt more quickly that’s needed.”
Beginning last June, Uber began tracking thousands of loads per week with its participating freight partners. Using this data, the company developed an estimated time to arrival model based on machine learning algorithms Uber claims are 50% more accurate than a leading industry benchmark.
Uber’s investment in technology and infrastructure is paying dividends. During its most recent earnings call, the company revealed that Uber Freight posted year-over-year revenue growth of 43% to $288 million, up 8.6% over Q3. CFO Nelson Chai told investors listening in that there was a 45% quarter-over-quarter increase in the number of active shippers using Uber Freight’s API and enterprise offerings.
Chai attributed a least a portion of the growth to the launch of Uber Freight Enterprise and Uber Freight Link last September. The former is a corporate-scale extension of Uber’s self-serve shipping platform, while the latter enables enterprise shippers to leverage Uber Freight’s technology across their full carrier network.
Uber announced in March 2019 that it would hire hundreds of Chicago-area Uber Freight workers ahead of plans to lease additional city office space. Later that year, Uber signed a 10-year lease on the Old Main Post Office in the Chicago River district and hired “thousands” of new employees in the region, substantially growing its Chicago workforce. The investment came to $200 million collectively, according to Uber.
“We have a terrific group with people with stats expertise, distance expertise, economics expertise, operations research, and very strong engineering around handling data and flowing back data and algorithms — building products that [perform really well]. The goal is to provide shipping quotes really quickly to shippers [so that they can] make the best decision for the business,” Ifrach said.
VentureBeat’s mission is to be a digital town square for technical decision-makers to gain knowledge about transformative technology and transact.
Our site delivers essential information on data technologies and strategies to guide you as you lead your organizations. We invite you to become a member of our community, to access:
- up-to-date information on the subjects of interest to you
- our newsletters
- gated thought-leader content and discounted access to our prized events, such as Transform
- networking features, and more
Become a member