According to press reports, Amazon is building an app that matches truck drivers with shippers, a new service that would deepen its presence in the $800 billion trucking industry.
Reportedly scheduled to launch next summer, the app is designed to make it easier for truck drivers to find shippers that need goods moved, much in the way Uber connects drivers with riders. It would also eliminate the need for a third-party broker, which typically charges a commission of about 15 percent for doing the middleman work.
The app will offer real-time pricing and driving directions, as well as personalized features such as truck-stop recommendations and a suggested “tour” of loads to pick up and drop off. It could also have tracking and payment options to speed up the entire shipping process.
This is the latest in Amazon’s rumored plan to become a full-scale logistics company that controls the entire delivery cycle. Over the past year, Amazon has purchased thousands of trailer trucks and dozens of cargo planes while launching new “last mile” services like Amazon Flex that take packages straight to the end customer.
But the broader goal is to improve the “middle mile” logistics space, which is largely controlled by third-party brokers that charge a hefty fee for handling the paperwork and phone calls to arrange deliveries between shipping docks or warehouses. It would make shipping more efficient and cheaper not just for its customers but also for Amazon, which has been dealing with rising shipping costs lately.
The new service would put Amazon squarely in competition with numerous startups in this space, such as Convoy and Trucker Path, while putting a direct hit on incumbent players, including the publicly listed ones like C.H. Robinson and J.B. Hunt.
The opportunity is huge for Amazon. Roughly 84 percent of all freight spending is on trucking, and the market is estimated to be worth $800 billion, according to the trucking startup Convoy.
Trucker Path, another startup in this space, says truck driving is the most common job in 29 U.S. states, but it’s a market that’s been slow to adopt new technologies, as most of the trucking companies are small businesses and 90 percent of them own fewer than six trucks.
But unlike its competitors, Amazon has an advantage in not having to worry about demand from the shipper’s side. To make an “Uber for trucking” marketplace work, you need demand from both sides of the equation — shippers and drivers. But Amazon already has a giant shipping network and a rapidly growing package volume, so theoretically it shouldn’t be hard to find a load match for the drivers on its platform.
There are some regulatory problems that need to be addressed. For example, drivers are not allowed to press more than one button when making a call while driving. There are also strict limits on how long drivers can go without a break. Amazon may be considering adding Alexa’s voice controls and new auto-logging features to get around these issues.
Analysts said if the service works for Amazon, the company’s next step could be to make it available for a fee to non-Amazon shippers as an easy-to-use option for business-to-business freight shipping.
“This is the next piece in the jigsaw puzzle,” said Cathy Roberson, a shipping industry analyst. “It’s all falling into place for Amazon as a logistics provider.”