Uber Freight has launched a new procurement channel that enables shippers to source capacity directly over its freight marketplace.
Market Access functions in real time and can serve as a middle ground between contract and spot shipments, the company said in a March 9 announcement. The system includes automated and competitive freight procurement, price controls and flexibility.
Uber Freight describes the service as an expansion of its existing procurement mix that is designed to provide shippers with a way to source capacity for unplanned freight, including low-volume and volatile lanes. The Uber Freight marketplace consists of more than 70,000 carriers.
“We are excited to continue growing our real-time procurement offerings with Market Access,” Bill Driegert, head of operations at Uber Freight, said in a statement to Transport Topics.
The program’s artificial intelligence-based pricing algorithm helps shippers competitively shop capacity for their freight, which can help them respond to volatile market conditions in real time, Uber Freight said.
It can be set up in conjunction with transportation management systems or function as a stand-alone product.
Market Access was in development before the coronavirus hit, but Uber pushed forward with development because it believed the conditions brought on by the pandemic accelerated the need for additional procurement options. A testing period involving several enterprise shippers nationwide started in February 2020, with electronics manufacturer LG among those participating.
“We decided to introduce Market Access at LG both because of the trust we’ve built up with Uber Freight and because there was such a unique need for a procurement offering like this,” Paul Heffernan, vice president of supply chain at LG Electronics USA, said in a statement to TT. “Market Access allows us to access competitive rates on inconsistent volume, especially important in a tight market.”
Market Access also guarantees price controls and cost transparency. Shippers will pay carriers the costs incurred over the Uber Freight marketplace plus an agreed-to fee upon delivery. Shippers that require additional control will be able to apply pricing guardrails or change the pricing priority, meaning they can pay more if they need the load to be picked quickly or pay less if cost savings are more important than timing.
They also can set up a price ceiling in which they won’t pay over a certain price. This is to enable shippers to set boundaries based on current needs and specific lane knowledge.