Eleven years ago, when Uber first launched in San Francisco, they likely didn’t expect that not only would the online car hailing model revolutionize the mobility industry, but that it would also trigger a transformation of the global logistics market.
In 2015, the industrial internet drove the boom in China’s road freight transportation market, the country home to the world’s largest logistics market and nearly three hundred road freight platforms fiercely fighting for a piece of said market. To capitalize on such an opportunity, entrepreneurs and investors turned their attention to logistics, hoping to create an “Uber of freight” through using Uber’s business model to transform this traditional industry often plagued by inefficiencies.
When it came to actual business operations, however, the complexity of the logistics industry, with its many variables and scenarios, far exceeded expectations, resulting in 90% of these road freight platforms ending in failure. Six years on, the platforms that survived the freight hailing platform battle royale and have continued their focus on road freight transportation, with Yunmanman, Huochebang, FOR-U SMART FREIGHT, and Huolala emerging victorious. All of these platforms come from truckload freight transportation, a 566 billion dollar market.
According to the Blue Book of China’s Logistics Industry, released by CIC (China Insights Consultancy), China’s road freight transportation market for 2020 exceeded $930 billion, of which the express delivery markets was $137.7 billion, the less-than-truckload (LTL) market was $229.5 billion, and the full-truckload (FTL) market taking the largest share of the market at $566 billion.
At present, the express delivery market in China is highly concentrated, with seven listed private companies, S.F. Holding for instance, merged in the market. By the end of September 2020, CR5 of China’s express delivery industry reached 75%. On the other hand, for the LTL and FTL industries, the market is excessively fragmented, providing perfect ecosystem for the incubation of integrated online platforms.
Due to the complexity of the LTL transaction process, as well as less standardized services, the online road freight hailing platform model is most likely to be realized first in the FTL market. Compared to China’s express delivery market, with its seven listed companies, the FTL market share is four times that of express delivery. Given the lack of listed companies in the industry, the FTL market is believed to be the next incubating pool for super-unicorn companies.
Manbang, also known as Full Truck Alliance Group, formed in 2017 through a merger between Yunmanman and Huochebang, is currently the largest vehicle-to-cargo information-matching platform in China, while FOR-U SMART FREIGHT, with its targeting of online transactions as its model, has quickly become the most competitive transaction platform in this field in China.
According to the Wall Street Journal, FOR-U SMART FREIGHT has built a tech-driven full performance model through its Smart Pricing System, Smart Dispatching System, and Smart Service System, improving the efficiency and service quality of its full truckload transportation.
In traditional freight transportation business models, for example, it is difficult to monitor the status of vehicles in transit. Such a business model also suffers from a lack of sufficient service standards. In comparison, FOR-U’s Smart Service System automatically records the route to be taken, and has accumulated over 100 unforeseen scenarios. If the system recognizes that the status of the vehicle is abnormal –for example, if the vehicle has not arrived at the loading location thirty minutes before scheduled loading– the smart alert system will send a reminder to the driver to get to the loading location, reducing the chances of delivery delays and other unforeseen incidents, guaranteeing safe, timely delivery.
The COVID-19 pandemic has truly upended the way the world operates, yet it also brings opportunity for improvement. Through digital platforms, shippers should to build up flexible transportation networks, while drivers should improve their overall operational efficiency. Given these potential improvements, the growing importance of digital road freight platforms could not be better demonstrated. With its considerable capacity for innovation and high growth, FOR-U SMART FREIGHT made the “2020 Forbes China gazelles 100 list”, and was the only company selected from the FTL transportation sector in China by the Boston Consulting Group (BCG) as one of the world’s 100 “tech challengers” in the “2020 BCG Tech Challengers: The Next Generation of Innovation in Emerging Markets” report.
L.E.K. Consulting believed that the “Uberization” of logistics was initially thought to be a long-term process, yet it now appears that, due to the impact of the COVID-19 pandemic, escalating market demands, and the rapid development of freight hailing platforms, this process will be greatly accelerated.
Media Contact
Company Name: FOR-U Smart Freight
Contact Person: Kevin
Email: Send Email
Country: China
Website: https://www.for-u.com/en/
