Uber Freight Exchange: Envisioning a freight marketplace for all

By Eric Berdinis, Director of Product Management

When we launched Uber Freight Exchange last year, we sought to bring the neutrality, transparency, and efficiency of a financial exchange like the New York Stock Exchange to logistics.

Shippers need agile procurement solutions that ensure they’re getting the best outcomes from their network in all market conditions, across spot and contract. Carriers need to maximize utilization, grow revenue, and build sustainable relationships. Uber Freight Exchange helps shippers and carriers come together through a technology-enabled contract and spot marketplace.  

Over the past 12 months, Exchange has experienced remarkable adoption. To date, more than 70 shippers have awarded $350 million in freight to over 1,000 carriers across more than 8,500 lanes. An additional 150 enterprise shippers are preparing to use Uber Freight Exchange by early next year. Starting today, contract procurement on Exchange is available to all shippers at no cost—and the Uber Freight team is just getting started.

After hearing many shippers’ and carriers’ procurement challenges, we wanted to share a sneak peek into the future of Exchange. Our vision for Exchange is centered around what we consider the three core pillars of modern procurement:

• Diversified networks vastly increase competition and drive cost and service

• Automated partner management helps keep your internal costs down

• Intelligent pricing finds the best rates on your behalf, with your control

Diversified networks vastly increase competition and drive cost and service

Shippers today use “mini-networks” of a few dozen carriers that artificially limit their cost and service outcomes. These smaller networks provide a balance between accountability and competition, but imagine the difference between having 20 carriers compete versus having 20,000 carriers compete.

Shippers tell us having access to a vast network of carriers would give them stronger negotiating power for pricing and contract terms, broader geographic coverage, access to specialized modes, volume surge support, risk diversification, and market shift hedging. Shippers wouldn’t be the only ones winning. As networks expand, carriers would get a foot in the door with more shippers to deliver great service, build new relationships, and ultimately expand their business.

Our aim with Exchange is to facilitate these introductions and help thoughtfully expand shippers’ and carriers’ networks. Carriers will build their reputations on Exchange by winning RFPs and moving spot loads with high service. Shippers can easily form new carrier relationships through Exchange’s recommendations, see their historical performance, and try them out before offering more volume.

Automated partner management helps keep your internal costs down

Trying out a network of hundreds or thousands of carriers sounds impractical, but the technology to operate a scaled network is already here. Shippers worry that expanding their carrier base could overwhelm their ability to onboard carriers, maintain compliance, protect against fraud, manage communication and payment channels, and drive carrier service metrics.

Uber Freight has tackled these same challenges while building a highly automated brokerage to manage tens of thousands of carriers over the last 8+ years. Exchange puts this automation directly in shippers’ hands to manage their spot and contract freight.

Trust and reliability, for example, are top reasons shippers keep their networks small. We tackle this problem with an automated scorecard that spotlights carrier performance while flagging issues in real-time. We reward thousands of top carriers each month to help them win more freight—all while retaining performance guardrails that automatically hone our carrier network over time.

Real-time carrier scorecards provide service accountability at scale

Shippers using Exchange will be able to set up their own performance system to help build and refine their carrier network automatically and help ensure only top carriers move their freight. With the power of a robust platform, they will also be able to see how their carriers are performing on average across other Exchange shippers—something shippers share is key to trusting a carrier they haven’t established a relationship with. Carriers will use their Exchange history and reputation to forge these new relationships and build their business—all while operating on Uber Freight’s award-winning fraud detection system.

Intelligent pricing finds the best rates on your behalf, with your control

Across stock exchanges, airlines, online auction systems, and well-known ride-sharing services, intelligent pricing can be a win-win for all marketplace users. Dynamic pricing models can also help operators make more informed decisions.

In contract procurement, shippers want to know they are getting the best rates possible from their trusted carriers. Exchange: Contract will give shippers the ability to quickly analyze bid results against incumbents and market rates. Shippers will create custom scenarios to identify the best carriers to meet their network needs. If time is of the essence, shippers can choose to get an instant contract rate from Uber Freight’s brokerage to help them quickly secure contracted capacity for new lanes.

In spot procurement, shippers need to balance cost and speed. Exchange: Spot will offer bid-only auctions and an option to add a Book-it-Now price to help shippers get faster, more competitively priced coverage while saving their team’s time evaluating bids. The Book-it-Now price can be driven by the shipper or by our proprietary pricing model. This model helps predict what a particular spot auction will go for given the millions of spot transactions that occur across Uber Freight’s network each year. 

Shippers must balance spot and contract to get the best outcomes overall, and Exchange will look out for opportunities to optimize between the two. For example, it will recommend when to turn a consistent spot lane into a mini-bid or when to take a contract lane to the spot market to ride a downward trend in carrier costs. This will allow shippers to effectively balance their contract and spot procurement strategies to support their supply chains.

Help build the future of procurement

The Uber Freight team is proud of what we’ve built. We also know there’s more to do to realize our vision of creating a more open and equitable marketplace for all. We envision a future where shippers and carriers work together seamlessly, empowered by data, technology, and a shared commitment to efficiency—and we’re eager to work with you to advance this goal. We invite discussions and collaborations from all industry partners to define and participate in Exchange. 

As of today, any shipper can start running contract bids on Uber Freight Exchange and invite carriers to bid on their contract freight. Early access to spot procurement is available for Uber Freight Transportation Management customers. If you’re interested in getting priority access to Exchange: Spot—while also sharing feedback to shape the future of Uber Freight Exchange—please join our spot procurement waitlist today.

It’s time to experience the next generation of freight procurement. Learn more about Uber Freight Exchange.