May 17, 2020

You've Got to Carrier Rate

Source Consulting
Luke Kupersmith
carrier rates
Freddie Pierce
3 min
Think of the savings!
Click here to read this article in the magazine edition! Shipping is much more complicated than it may initially seem and it is becoming an increasingl...

Click here to read this article in the magazine edition!

Shipping is much more complicated than it may initially seem and it is becoming an increasingly important area to save money in.  Today, we are living in a hyper-competitive business climate that is also fairly tough due to the economic downturn.  Concurrently, many businesses rely on carriers as a means to get their product to customers but only use one carrier exclusively.  However, many of these businesses don’t realize that both the tough economic environment and their shipping actually can go hand-in-hand in helping save the company money.  By understanding how to properly compare the rates of the shipping carriers, businesses can make simple and better cost-savings decisions. 

To understand why we only suggest comparing only two carriers, businesses need to understand the oligarchic structure of the shipping industry.  The shipping business is only made up of a few players, the biggest two being FedEx and UPS, who dominate the majority of shipments and the two that will most likely get your patronage.  This set-up also creates an easily visible but interesting scenario of brand loyalty.  Nearly 50 percent of large businesses exclusively choose one carrier versus the other in shipments via the air.  Understanding this fact can lead you to better comprehend why we do focus on only these two companies. 

Thus, it is important to constantly compare these two major shippers—doing so will readily show you differences in shipping rates and prepare you for a future carrier negotiation. One major aspect to remember when comparing prices is to not look at the two side-by-side directly.  Because the carrier’s base tariff and fee schedule can widely differ from the carriers, a 30 percent discount from UPS may not be the same for FedEx.  Instead, to accurately determine the difference between the rates from both carriers, calculate any applicable discounts, incentives and rebates first and then compare the actual net cost. 

Additionally, remember these tips as well when comparing the two carriers.  One note is to calculate and compare these numbers yourself before any actual negotiation takes place instead of relying on the respective representative to do the work for you.  Think of how you would negotiate a car—you would go in with your research that represents the amount you found in your research to compare and contrast with the dealer's numbers.  Also, you do not have to do these calculations on your own.  There are tools on the Internet that can help you figure out these comparison rates as well—many of which are free.

These numbers can help with the carrier negotiation process but are only one part of being able to get discounts for your shipping contract.  Make sure to conduct the appropriate research about the carriers and go in with a determined attitude.  With these different tools under your belt, you and your company can be well on their way to saving money on shipping and helping your company focus on what’s important to all of you - the content and the people. 

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Jul 22, 2021

Uber Freight to Acquire Transplace in $2.2bn Deal

2 min
Uber Freight’s acquisition of Transplace will supercharge parent Uber’s move into logistics and supply chain

Uber Freight is to acquire logistics technology and solutions provider Transplace in a deal worth $2.25bn. 

The company will pay up to $750m in common stock and the remainder in cash to TPG Capital, Transplace’s private equity owner, pending regulatory approval and closing conditions. 

“This is a significant step forward, not just for Uber Freight but for the entire logistics ecosystem,” said Lior Ron, Head of Uber Freight, and former founder of the Uber-owned trucking start-up Otto.

Uber’s Big Play for Supply Chain

Transplace is one of the world's largest managed transportation and logistics networks, with 62,000 unique users on its platform and $11bn in freight under management. It offers truck brokerage and other capacity solutions, end-to-end visibility on cross border shipments, and a suite of digital solutions and consultancy services. 

The purchase is the latest move by parent company Uber, which launched as a San Francisco cab-hailing app in 2011, to diversify its offering and create new revenue streams in all transport segments.

Transplace said the takeover comes amid a period of “accelerated transformation in logistics”, where globalisation, shipping and transport disruption, and widespread volatility are colliding. 

Uber Freight plans to integrate the Transplace network into its own platform, which connects shippers and carriers in a dashboard that mirroring the intuitive experience found in its consumer vehicle booking and food ordering services. 

“This is an opportunity to bring together complementary best-in-class technology solutions and operational excellence from two premier companies to create an industry-first shipper-to-carrier platform that will transform shippers’ entire supply chains, delivering operational resilience and reducing costs at a time when it matters most,” said Ron. 

Frank McGuigan, CEO of Transplace, said the resulting merger will offer enhanced efficiency and transparency for shippers, and benefits of scale for carriers. “All in all, we expect to significantly reduce shipper and carrier empty miles to the benefit of highway and road infrastructures and the environment,” he added. 

History of Uber Freight

Uber Freight was established in 2017 and separated into its own business unit the following year. In 2019 the company had expanded across the entire continental US, established a headquarters in Chicago. Later that year it launched its first international division in Europe, initially from a regional foothold in the Nertherlands, and later moving into Germany. 

The logistics spinoff attracted a $500m investment from New York-based Greenbriar Equity Group in October 2020, and launched a new shipping platform for companies of all sizes in May, partly in response to a driver shortage in Canada.

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