Land O’Lakes has partnered with Uber Freight, a service from Uber, to gain transportation capacity at potentially better prices.
The spot market for additional transportation has been increasingly tightened due to multiple factors such as driver shortages and increased economic demand for goods. The result has been an upward pressure on transportation carrier prices over the last 18 months when using traditional transportation brokers.
By using technology via Uber Freight, the company has been able to secure spot transportation capacity at reduced prices.
This post is based on the Logistics Management article, Land O’Lakes lock in Texas-based capacity, by Jeff Berman, November 6, 2018. Image source: Shutterstock / Chesky.
1. Will success with Uber Freight displace the traditional broker model? Why or why not?
Guidance: Include capacity planning in the discussion. There’s a need for long-term capacity sourced at a reduced price and the addition of short-term capacity to handle immediate demand through Uber Freight. The instructor could introduce the concept of read/react as a sourcing strategy as applied to transportation capacity.
2. Could Uber Freight be applied to last mile shipping?
Guidance: Students may recognize that last mile shipping could be performed with other technology-driven applications from Uber and other similar companies. Ask the students to detail the potential pros and cons of using Uber Freight versus Lyft to deliver packages the last mile to a customer’s home. Issues with security and package tracking should be highlighted.