Can Technology Revolutionize The Traditional Trucking Industry? Manufacturers Hope So.

A few technology companies have claimed they’re going to disrupt trucking and transportation. They want to “Uberize” the industry, believe autonomous and electric trucks are the future, or even promise that the right software will flip freight on its head.

Of course, in this age of supply chain uncertainty, manufacturers are listening intently. As they should be. Regardless of whether technology can revolutionize trucking, even gradual improvement would mean significant savings.

But here’s the question: Is an industry as old and complicated as logistics susceptible to a large-scale overhaul?

Andrew Hurst has a unique perspective. An industry veteran, he’s been a leader at Ark Transportation for 14 years, half of them as CEO. In that time, he’s also spun up two technology-enabled startups, Veroot in 2010 and Delivered in 2022. He says the industry is clamoring for new technology­. There have been few advances in the last two or three decades—but he views a complete overhaul largely as a pie in the sky.

“I think the biggest impact right now in our supply chain is how efficient you can be with labor management and capacity management,” Hurst says. “That’s where I see the future of logistics going—taking the empty capacity off our roads.”

Folks living through supply chain chaos in their businesses aren’t the only ones keeping a keen eye on logistics; investors are, too. From 2020 to 2022, supply chain tech startups brought in $124 billion in funding, according to PitchBook. That’s nearly double the three-year period before it.

Pointing $124 Billion in the Right Direction

Hurst has intently watched every Uberization effort so far. He’s watched technology companies attempt to enter the industry only to realize the intricacies don’t fit their model, and then bail.

Uber
UBER
itself, in fact, has seemingly changed its approach. They developed Uber Freight with the idea of bringing the Uber-centric independent contractor model to trucking but hit major roadblocks. Now there’s talk Uber may spin off freight altogether, either as a separate public company or by selling to a private buyer. It seems even Uber can’t Uberize the supply chain because of its extreme complexity and regional discrepancy.

For Hurst, one takeaway is that technology solutions tend to stumble when they take a top-down approach. “They run into human problems—Donna on the dock doesn’t like X, and she doesn’t care what the app says, she’s not going to do it,” Hurst says. “Until we get to a point where robots are doing that job, where the quote-unquote Donnas of the world aren’t around, we’re stuck with this sort of in between.” For now, Hurst says, there are simply too many variables feeding into the transport business, and those variables are constantly changing and susceptible to the rules and regulations in any given region of the U.S., let alone the world.

That doesn’t mean there isn’t an opportunity to bring about meaningful change to the industry. In his eyes, some of the most important opportunities lie in creating more transparency and collaboration from one supply chain partner to the next. “Your competitor is your competitor, there’s no benefit to sharing information—that’s what the thought was,” he says. “But we see a lot of the money being poured into the startup world pointed toward transparency, whether that’s via rate shopping or through visibility tools so companies know where their stuff is at.”

Through his startup Delivered, Hurst is attempting to put his money where his mouth is. He’s creating a logistics operator that is light on physical assets, choosing to partner with a network of carriers so he can—with the help of machine learning—match shipments with their most optimized path from point A to point B. For example, the company uses unused air capacity—capacity in planes already scheduled for flight—to ship items. All things considered, he’s creating what he calls a “decentralized FedEx
FDX
or UPS.”

“You slap the Delivered label on your box or your package in your warehouse, it’s picked up very much the same way you’d expect,” Hurst says. “But once we pick up the package, its lifecycle is going to be very, very different than if you were using one of the incumbent carriers.”

Logistics Progress Won’t Be Instant—It’ll Be Incremental

A revolution may not be in the works, but an evolution within the trucking and logistics industry is underway. While no one can predict whether the promises made by companies developing autonomous trucks will come to fruition, we can definitively say that in this industry, there are no quick fixes. Manufacturers, however, can expect innovations to come online in the next five years and create more efficiency between themselves and their vendors. As always, manufacturing leaders should be keeping their eyes open to new technology.

“If you change even the smallest little efficiency percentage for a company, that could represent billions of dollars,” says Hurst.

That’s what he’s trying to do with Delivered. He sees innovation from that $124 billion in startup funding creating steady improvement for the industry. But he cautions new entrants to do their homework. Even if their innovations are software-centered, in this industry they’re very much solving human problems. “Logistics is about continuous improvement,” he says. “It’s about evolution and not being afraid to change—but changing incrementally.”

New, technology-fueled entrants to the market may want to keep Hurst’s principals in mind, favoring incremental supply chain advancements with a foundation of industry expertise over unicorn concepts that can tend to be top-down and go-for-broke. I’m optimistic they will, and that we’ll begin to see the emergence of a more resilient, supply snarl-free, and efficient supply chain over the next decade.