Why the WSJ’s “reinventing the trucking industry” story got it wrong
By Jason Cahill
You probably saw the Wall Street Journal article from today titled, “Startups Accelerate Efforts to Reinvent Trucking Industry.” The story discusses the growing number of firms that are focused on disrupting the trucking industry by eliminating the broker to allow truckers direct access to shippers, so they can get loaded in less time, for less money.
Here’s the thing — I used to be one of these start-ups trying to accelerate and reinvent the trucking industry. Despite being an Army Special Forces veteran, I’m a true data and logistics nerd at heart and I used to believe that Silicon Valley could solve the problem of 1 in 5 trucks driving empty — in other words, I thought an app could solve all of trucking’s problems.
But I was totally wrong. And the WSJ article was wrong, with the exception of XPO Logistics Inc.’s CEO who noted, “Many aspects of transportation brokerage will ultimately be disrupted by technology, but we are likely to be the disrupter rather than the disrupted.”
I, too, wanted to eliminate the middleman — get rid of brokers like we got rid of travel agents through the use of kayak.com and priceline.com (as the WSJ article suggests). But then I talked to truckers — listened to them and heard their needs:
- My sister has worked for a trucking company for the last 15 years and through her connections, I conducted interview after interview with truckers.
- They all said “yeah, your app sounds interesting and all, and I’ll test it out — but I’m never going to give up the relationship with my broker. I trust him.”
- From a first-generation, Georgetown Law-educated trucking company CEO to a fourth-generation Massachusetts-based retail trucking company, I kept hearing the same thing.
Truckers have a love-hate relationship with brokers. But what I learned is — brokers aren’t going anywhere anytime soon because brokers own and manage the relationship with shippers. And a point that cannot be overstated — shippers, too, have complete faith in and reliance upon their brokers.
I was on cloud 9 — dozens of customers, revenue flowing, but I lost a huge customer because a trucker using my app didn’t show up — he wasn’t invested in my company… and didn’t care whether the load was moved or not. This is a challenge that will prove a significant roadblock for all companies claiming to be the “Uber for trucking.”
So here’s the real solution that will disrupt the industry — let’s HELP the brokers. Empower them. Update their technological capabilities. Make THEM the leaders of the trucking tech revolution. Empower brokers with big data capabilities that will transform the sector — and help increase incomes for both brokers and truckers.
The CEO of Convoy trucking, Dan Lewis, was quoted as saying, “You can’t have 1 million small trucking companies without brokers, but they’re taking a hefty fee without adding much value.” I disagree. Brokers add a lot of value, and even more with just a little bit of help.
I’ve talked to brokers. I know what they want. I know their pain points.
So I’ve reinvented my company, Traansmission, to help brokers — not eliminate them. It’s where real change will take place, at scale.