Freight has been a buyer’s market ever since the recession got in gear. Traditionally, the drastic decline in sellers—carriers—should lift prices, but that hasn’t happened because shippers are sitting on inventory until the Ultimate Buyer, the consumer, starts spending again. And as always, the little guys, under-capitalized O/Os, are the worst hit.
So it’s good news when someone finds a way not only to stimulate shipping, but to actually create loads that might not otherwise exist. That’s what uShip, an Austin-based company has done on a site that looks like eBay, works like eBay, quacks like eBay and was funded by the same company that bankrolled eBay.
Is it the next eBay? Nah. Will it revolutionize the freight industry? Nah again. Is it good for small shippers and small truckers? Absolutely. But before we explain how this six-year-old phenomena works, it might be helpful to tell how it began, because its origin explains why it works.
Back in 2001, the mother of uShip founder, Matt Chasen, wanted to send an antique dresser from Ohio to Texas. She never did because the best bid—$1,000—far exceeded the dresser’s worth. A year later, when Chasen and his wife moved from Seattle to Austin, he reserved a 9 ft. truck at a local rental center. On moving day, however, he discovered a cavernous 20-footer was the only available vehicle.
Chasen took it anyway and remembered his mom’s plight. It occurred to him there must be people in Seattle with similar loads, too small for most shippers but plenty to fit in his over-capacity truck. Too bad he and they had no way to connect. He could make extra money and they could get their goods delivered at a reasonable price.
Of course what Chasen was thinking of was a load board, but like most people outside the trucking industry, he’d never heard the term. Most small shippers who go outside UPS are household movers whose only load experience is flipping through the Yellow Pages. Chasen’s insight was to see a market for onetime shippers, occasional shippers, and regular small business shippers.
From Idea to Reality
Back in Austin, Chasen enrolled in the MBA program at the University of Texas’ McCombs Business School. There he and two classmates researched the market and developed the concept of a load board for non-commercial users. They presented it to Benchmark Capital, eBay’s original banker, which responded with $5 million in seed money. In 2004, Chasen and his partners launched uShip.com.
The original business plan was to provide an eBay-like site for customers to ship small freight such as golf clubs, pianos, cars, and, yes, eBay items. All that has indeed come to pass, but to the founders’ surprise, even astonishment, uShippers have also negotiated contracts for a WWII truck, a bronze church bell, a “pet alligator,” an entire warehouse of vintage baseball cards and, oh yes, a hovercraft. In six years, some 900,000 listings have produced more than $125 million in brokered shipping.
A visit to uShip’s site shows a model of navigation, information and smooth understated design. Its marketing is state-of-the-art, complete with the usual social media suspects; an irregular but informative blog; and “community forums” (one for shippers and another for truckers, both accessible to anyone). Its pitch is geared to shippers, but since uShip knows it can’t succeed without active carriers (or “service providers”), it provides them with easy registration and plentiful advertising tools. A design template ensures that every carrier has a consistent uShip look and reliable information.
Good for Shippers
uShip’s site features lots of testimonials from happy shippers (or even the occasional unhappy one). Like eBay, there’s a ratings system for carriers and shippers. The overwhelming impression is that uShip customers are not merely content but ecstatic with service and price.
And its carriers? uShip doesn’t feature similar testimonials from delighted carriers, but then most load boards don’t. The numbers seem to speak for them though. uShip has just a hundred thousand shy of two million carriers in major categories such as Household, Boat, Vehicle, Heavy Equipment, Pet & Livestock and Special Care. This doesn’t include unnumbered others in Food & Agriculture and Junk Haulers.
Good for Carriers
To get the carrier’s perspective, we spoke with Matt Gehman, owner-operator of Wolverine Logistics of Fort Worth. Matt has two trucks and specializes exclusively in motorcycles (though he’ll do the occasional dune buggy). Wolverine joined uShip in May 2007 and a year later was selected as uShip’s “Member of the Month” with a 100% approval, a rating that still stands as of January 2010.
“I’ve been doing this for a long time.” says Matt. “We deliver everywhere. Most of my customers are businesses or collectors that already know about Wolverine. We do about fifty bikes a month. I guess since ’07, we’ve done about nine hundred bikes through uShip, so it’s brought in a lot of extra business, mostly from people shipping for the first time. Most of my new business comes from my own site, but you know, sometimes people are cautious. They go to uShip and there’s our record. It speaks for itself. uShip takes its cut but that’s business I might not have gotten. It’s a good deal. Everybody wins.”
Good for You?
By design, uShip will never be a serious challenge to established load boards. On a good day, its volume is a mere fraction of GetLoaded or TruckersEdge, but it fills a niche that the big boards can’t. So if you’re finding lean pickings on your usual boards right now, check it out. It could be a great way to fill extra capacity and, who knows, you might snag a contract for a hovercraft.
This story was drawn from articles in CNN/Money, The Wall Street Journal, The Austin Business Journal and The Austin Statesman as well as original reporting by Ernest Sharpe.
This article is provided as a service for truckers and everyone in the trucking industry by Advance Business Capital. ABC is the first and only factoring service designed by truckers for truckers. We provide innovative financial solutions exclusively to For-Hire truckers and Freight Brokers and are proud to be the first factoring company to receive the P3 (Preferred Platinum Provider) endorsement from the Transportation Intermediaries Association.