‘Uberization’ of freight services set to explode

by MM&D Staff

ABI Research forecasts Freight as a Service (FaaS) will represent 30 percent of total goods transportation revenues by 2030. Its benefits, similar to Mobility as a Service (MaaS), include cost reductions, resource utilization improvements, and convergence of market landscapes through adoption of a sharing economy business model.

FaaS streamlines freight and parcel delivery services through new advancements in cargo market places, on-demand transportation, freight brokerage, and ridesharing. With IoT applications fueling its current growth rate, FaaS revenues are on track to exceed $900 billion by 2030.

“With an average global air cargo Freight Load Factor of as low as 44 percent and a structural 20 percent long-haul truck cargo capacity utilization deficit in the US, the freight industry needs to act,” said Dominique Bonte, managing director and VP at ABI Research.

“The last-mile freight delivery segment will experience the largest upheaval due to the rapid adoption of e-commerce and the need for faster, cheaper, on-demand delivery through new transportation modes and technologies.”

Uber already offers the UberRUSH and UberEATS delivery services and recently invested in truck platooning startup Otto. The industry is also testing drone-based delivery with companies like Amazon, FedEx, Flirtey, Google, and UPS all on board. Audi and Daimler, both partnering with Amazon and DHL, are using telematics to test direct-to-car delivery, and Volvo launched its commercial in-car delivery service just one year ago.

Daimler and Workhorse, meanwhile, are considering hybrid models, integrating autonomous vehicles, drones, and/or robots with smart home technologies. The aim is to provide end-to-end delivery of parcels inside homes and commercial sites by using indoor navigation and remote electronic door unlock technologies.

However, transportation efficiency improvements can be taken to yet another level by leveraging synergies between FaaS and MaaS. Repurposing excess MaaS capacity of driverless vehicles or shuttles during off-peak hours for freight transport and delivery will allow ultra-high utilization rates and very low costs per mile.

“Both FaaS and MaaS are seen by governments as strong engines for economic growth,” concluded Bonte. “Governments need to move forward with new legislation to allow for the deployment of delivery technologies like UAVs and create frameworks for the underlying business models.”

These findings are from ABI Research’s report “Freight as a Service”.