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Uber And Convoy Up The Ante In Freight Price Analytics | Benzinga

Both Uber Freight and Convoy released new data-driven products last week meant to help shippers understand trends in freight markets. The competition between the two large digital brokerages appears to be heating up and is driving a new wave of technological innovation, creating more transparency and smoothing out information asymmetries.

In our view, Uber Freight’s Lane Explorer represents a significant advance in price discovery, predictive analytics, and freight market transparency for the transportation and logistics industry. FreightWaves spoke to Stefan Sohlstrom, Product Manager at Uber Freight.

“It starts with Uber’s ride sharing,” said Sohlstrom. “Our core expertise was balancing supply and demand—finding the right amount of riders and drivers and matching them together. It’s what we’re utilizing on the freight side, to make tools like Lane Explorer to create accurate prices and predict the amount of trucks and the cost of trucks.”

Sohlstrom said that while Lane Explorer generates quotes for lanes between any two zip codes in the lower 48 states, the granularity of Uber Freight’s supply and demand data is actually on a lat-long level. We wanted to know how Uber Freight mitigated the risk of runaway spot market volatility.

“In terms of calculating supply and demand,” Sohlstrom began, “our methodology increases our price to account for volatility. The entire model is built around mitigating risk, and improving on itself. The model is imperfect and makes mistakes, and every single day it learns from its mistakes. Every day, on aggregate, shippers get a more accurate price than the day before.”

“We’re making a probabilistic bet that we can find you a truck for this [price]. The optimization running is truck cost prediction—that’s what it’s improving upon every day. We’re trying to understand the likelihood of a truck picking up a load for a certain rate on a certain day in a certain place,” Sohlstrom said.

In the past, logistics services offering guaranteed capacity have charged high premiums to shippers, far above market rates, but Sohlstrom said that he has already received anecdotal feedback from shippers that Lane Explorer’s “prices are incredibly competitive, especially where we have carrier density.” Rather than being the highest-priced option on the routing guide, Sohlstrom said that “the intention is that Uber Freight be the benchmark that shippers go to first. Lane Explorer helps them understand what the market is doing and brings transparency, not just to our rates but to the entire market.”

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Uber And Convoy Up The Ante In Freight Price Analytics | Benzinga.

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