Logistics Companies face disrupter Uber

If you haven’t heard of Uber before, you’ll certainly be familiar with the name in the future. At present the company is best known for its “Uber-convenient taxi app.” which is a strong competitor against HAILO. Now the company is moving into the logistics market and it could well bring a fundamental change to the way in which large-scale, traditional logistics companies operate.

Logistics Companies

Uber produces apps that effectively bring crowdsourcing into new markets and in terms of logistics, UberRush is the latest version to come to London and it offers a small business and enterprise solution. Small retailers, for example, can get on-demand deliveries and returns done in a highly cost-effective and responsive manner – in much the same way that consumers currently use apps to call a taxi.

There is a lot to play for commercially and Uber considers the UK courier market as a significant opportunity; if they secured just 10% of the estimated £7.1bn value of business, it would create a £700 million revenue stream. However the longer-term play may well be focussed on the online retailers like Amazon and Google where logistics are core to the business model and any efficiencies in this respect would have a major impact on profitability.

So should the logistics incumbents be worried?

The dominant players in the market, like Fedex and UPS will want to play down the potential impact of the business model and of Uber itself, indeed Fedex CEO says “…great company…but I don’t think it’s likely to be a major player in the logistics business.” He asserts that the app. doesn’t change the basic costs associated with the logistics business. Yet this assertion could be misguided; real-time access for businesses to the nearest physical courier or service supplier will inevitably cut down on the transport time taken to pick up the goods.

Recently the founder of the supply chain consultancy Tompkins pointed out that these larger businesses operate nationwide yet the demand to service business efficiently at a local level is increasing. This also reflects the ethos of LaMiLo which we have discussed previously.

All of this points to greater opportunity for smaller players and logistics companies like Cargocare in the marketplace. Local, specialist suppliers that are on hand quickly and are not carrying legacy investment costs on large transport fleets may well emerge as the winners in this full-on commercial battle now underway in the UK.

Checking out logistics companies? Contact Cargocare

Cargocare is a family-run, professional freight forwarder that offers customers a hands-on, reliable and cost effective service. We operate daily services between the UK and Ireland and our range of services include personal shipping, last mile logistics, freight forwarding, storage and more. Call us to talk through your requirements and get a competitive quote for a superior service – contact us.