Wednesday, March 28, 2018
Today’s society is highly reliant on the logistics industry. In the U.S., the spending in the logistics and transportation industry totaled $1.48 trillion in 2015 and represented 8% of annual gross domestic product (GDP). (Selectusa.gov)
With the increasing popularity of imported goods and online shopping, the industry is estimated to double within the next 7 years. This and the fact that this cumbersome industry is lacking efficiency in many sectors makes it appealing to innovative companies who have the means to invest.
This is exactly why Amazon and Uber targeted logistics as well.
The most valuable startup in the world has been working on implementing its successful business model for logistics. They launched UberRush and Uber Freight, both directly matching shippers with carriers - UberRush focused on parcel delivery and Uber Freight on trucking. To incentivize the use of their platform, Uber also recently launched Uber Freight Plus which can help transport vehicle owners alleviate costs. (Techcrunch.com)
The company has been working on more ambitious plans as well, autonomous vehicles. They have been testing both autonomous cars and trucks and although they were showing progress and their self-driving trucks which recently started delivering freight in Arizona (TheVerge.com), the testing had to be paused because one of their autonomous cars caused a fatal accident. (TheGuardian.com)
The motivation of the retailer giant to conquer the logistics industry is understandable. Its customer satisfaction is highly dependent on the logistics service providers’ service quality and the company can save a lot by dealing with logistics in-house.
Amazon has been known for experimenting with innovative ideas and they have been doing so with logistics solutions as well. As an example, the company has been using unique “chaotic warehouses” which rely on a complex barcode system. The have also been working on solutions that enable drone delivery. In 2017 they patented a drone-beehive idea which would work as a multi-story drone center. (TheVerge.com)
Both companies have outgrew their original business concept are now utilizing their immense tech knowledge to revolutionize the logistics industry. What will this mean for the current market players? Is it possible to transform this enormous market?
Take a look at the following infographic to find out!