Our featured highlight for Supply Chain Matters This Week in Supply Chain Management Tech is news that Uber Technologies is selling an estimated $500 million stake in its Uber Freight brokerage service to select private investors.
Uber has recently exited the freight brokerage business in Europe, selling that portion of the business to a German based investor in an all stock deal.
The deal, which is being announced as a “Series A preferred stock financing” move, is reportedly led by New York based private equity firm Greenbrier Equity Group.
As part of this deal, two managing partners of Greenbrier will join Uber Freight’s board of directors.
Uber has reportedly declined to name other investors. The announced investment reportedly values the Uber Freight business at $3.3 billion after the funding round.
News of investment talks involving the North America logistics operations of Uber Freight were reported by Bloomberg back in July.
This Editor spoke with Bill Driegert, head of operations for Uber Freight North America to gain an overview of the Uber Freight brokerage’s operations.
Dreigert joined Uber in September of 2016 after prior stints at Pepsico, Coyote Logistics and Amazon. The Uber Freight business began in stealth mode in May of 2017 essentially leveraging Uber’s technology talent and infrastructure in what Drigert described as logistics heavy load matching processes. That included taping into Uber’s resident artificial intelligence specialized data scientists.
Testing has included load matching for full-truckload van, refrigerated or flatbed loads among major cities across Texas. The company is now expanding its service offering on a broader nationwide emphasis.
A primary emphasis was placed on developing an easy to use App that provided truck drivers super user friendliness, one-click load acceptance and at the same time added value, particularly to assist drivers in securing up-front pricing, planning of loads in any given week, or navigating road and facility complexities. Driegert emphasized an overall obsession with one-step execution, in a process area known for lots of searching and phone calls. For small carrier fleets, Uber Freight provides a Dispatcher App for scheduling and monitoring of truck assets.
For companies tendering loads, the emphasis was on access to large numbers of owner-operator drivers and small regional carriers, as well as seamless integration with existing resident TMS systems. Driegert indicated that having real-time pricing in the TMS routing guide has provided exploding interest. Uber Freight has already struck partnerships with BluJay Solutions, Oracle and SAP TMS product groups.
Being a new market entrant, this provider has to compete with established broker players such as C.H. Robinson, as well as other on-demand technology driven disruptors such as Convoy , Flexport, Loadsmart , Transfix and many others.
The company reported $211 million in revenues in most recent quarter, an increase of 27 percent. While the provider is not yet profitable, the goal is to do so this year. Recent staff reductions undertaken were undertaken to reduce costs and achieve profitability in a much more-timely manner.
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