Uber Freight is helping combat a $1.3 billion problem that the trucking industry has ignored for years
Jeff Gritchen/Digital First Media/Orange County Register via Getty Images
- Uber Freight announced on Thursday that truck drivers using its app can rate the retailers and warehouses they work with. Shippers will also be able to rate truckers in the coming weeks.
- During the two-month pilot period, Uber Freight amassed more than 10,000 reviews from truck drivers.
- That could help solve the pervasive issue of unpaid detention time, in which truckers lose $1.3 billion annually waiting at warehouses for loads.
Truck driver Bill Hieatt spends hours nearly every day at work not getting paid."At some of these companies, it's like being an indentured servant," Hieatt, who has been a trucker for 20 years, told Business Insider.Advertisement
Truckers such as Hieatt are expected to spend hours at warehouses waiting for their shipments to load or unload. Warehouses often do not have their shipments ready for truckers, even when they're on time, and that results in truck drivers being "detained."
Those shippers, which might include small businesses and major retailers, should load or unload in a two-hour window in accordance with industry standards. After that, shippers are expected pay an hourly rate for every hour that a truck driver is detained at a warehouse.Except they usually don't. According to a survey, administered by the freight marketplace DAT Solutions, of drivers from 257 trucking companies, only 3% said they receive detention pay for at least 90% of their claims to the shippers.
"Detention time is nonexistent most of the times," Hieatt said.Read more: Grocery stores would run out of food in 3 days if long-haul truckers stopped workingLosing out on that pay is critical for truckers because they're usually paid per mile. All told, truck drivers lose $1.1 billion to $1.3 billion in pay every year because of detention, according to a 2018 study by the Department of Transportation.Advertisement
A new feature from Uber Freight could help combat that
Uber Freight, which launched in late 2016, matches shippers and truckers through an online marketplace. Typically truckers have to work through freight brokers, who take a commission of 15% to 20% for the shipment.
On Thursday, Uber Freight announced that truck drivers using its app can rate the retailers and warehouses they work with. The service has already amassed more than 10,000 unique facility reviews from truck drivers during the two-month pilot period.
Courtesy of Uber Freight
Xinfeng Le, the Uber Freight carrier product lead, told Business Insider that truckers are most keen on rating shippers based on their ability to load and unload quickly, as well as their availability of parking, food options, bathrooms, and so on.
"This ties back to what drivers actually care about," Le told Business Insider. "When they're at a facility, they want to be treated with respect."Allowing truckers to rate facilities will promote "transparent and collaborative environment" in transportation, Le added. Truck drivers will be able to point out which retailers are holding up drivers, and then those retailers can address issues to ensure the people who move their goods are being treated respectfully.
Courtesy of Uber Freight
"Driver detention is an urgent issue that must be addressed by our industry. It's a matter of fairness," said Don Thornton, a senior vice president at DAT Solutions. "Many shippers and receivers are lax about their dock operations, but it's the carriers and drivers who are forced to pay for that inefficiency."
Shippers will be able to rate truck drivers in the coming weeks. Anheuser-Busch, Land O'Lakes, Niagara Bottling, Colgate-Palmolive, and other retailers are all active users of Uber Freight, the company told Business Insider.
Nixing detention times is good for people and for businessesUber Freight is one of many startups in the trucking community that's working to eliminate the middleman in freight brokerage - such as Transfix, Convoy, and Next Trucking. The founders of those companies have previously told Business Insider that automated freight brokerage can also help benefit truckers.Advertisement
But doing right by truck drivers isn't just good for the 1.8 million men and women who haul freight for a living. As a truck-driver shortage descends upon the US, it's becoming necessary for retailers to ensure that truckers are willing to work with them.Read more: Truck drivers' salaries are experiencing an 'unprecedented' jump, but it's not enough to end the driver shortage that's making everything more expensiveThe van-load-to-truck ratio peaked last year, according to DAT Solutions. In June 2018, there were 9.9 loads for every available truck. That ratio was 5.6 loads-to-truck in June 2017 and 2.9 the previous June.Advertisement
Transfix CEO Drew McElroy said shortage of capacity is forcing companies to drastically reconsider how they treat their drivers. If retailers don't change their behavior, McElroy said no one would be around to move their goods.
"There are places that trucking companies will not pick up from - I don't care if you pay me twice what the guy across the street is paying me, I'm just not going there," McElroy told Business Insider last fall. In October, 80% of truckers said there are shippers they specifically refuse to work with."And if you're in the business of selling widgets and if you can't psychically move your widgets, you're dead."Advertisement