Truck Topics

A new business model: uShip

There's a new way for professional drivers to find freight on the Internet, but it's not your typical load board. 

Instead of a shipment consisting of 30,000 lbs. of steel, with this load board you're just as likely to find a Shipper who wants an antique table moved 800 miles.  Or, instead of a load of boxes that would take up half the space of a straight truck, chances are someone has a shipment that will fit in a cargo van with room to spare.

Welcome to uShip.com.

As the company describes itself, "uShip is a marketplace connecting people with shipping needs to people who are already making the trip, including feedback-rated drivers, couriers, and movers who have excess shipping and moving capacity."

Founder and President Matt Chasen says that uShip is important to the expediting community because it allows the owner-operator or driver to:

Control his business by actively finding his own jobs Eliminate empty miles Add dollars directly to his bottom line Reduce down time waiting for loads Utilize an online feedback system to enhance his reputation

Chasen, a former Boeing Co. engineer, says that this concept revealed itself on a trip from Seattle to Texas.  It occurred to him that his rental truck was two-thirds empty and he began brainstorming about how he could lower shipping costs by matching excess truck capacity with people's oversized deliveries.

Utilizing its patent-pending uSearch technology, uShip launched its marketplace in March 2004.  Its staff consists of six full-time and 12 part-time employees (and plenty of technology) at its Austin, TX headquarters.

Who's using uShip
Most of the Shippers who utilize uShip are individuals, small businesses, and eBay users who are looking for an easy, cheap way to ship just about anything.   The company says that its Shippers have listed anything from a 6-bedroom household, to a warehouse full of 1 million baseball cards!
 
The Service Providers using uShip are movers, van lines, freight carriers, freight brokers, vehicle/boat carriers, couriers and independent drivers.
 
As Matt Chasen says, "Our business model is similar to eBay's. uShip is a peer-to-peer marketplace that connects drivers with shippers."   During the developmental stages of the business, the founders took a weeklong road trip with a truckload of multiple shipments from Austin to Northern California to prove to themselves that it could be a profitable venture for the driver.
 
uShip explains to its potential Shippers that isting a shipment in its marketplace is an alternative to paying high retail prices for shipping and moving.  Its advanced technology allows its Service Providers to find shipments along their route, better utilize the space in their trucks, and bypass the middleman.

The concept is catching on.  UShip has attracted more than 7,000 Service Providers and has brokered millions of dollars in shipments since launching the company in 2004.  Chasen says that uShip has thousands of listings on the web site at any given time.
 
How it works
Shippers list the details of their shipment, including a "target" price on the uShip web site.  Service Providers find shipments using the company's four search methods, including its patent-pending "uSearch". 

Service Providers can ask questions about shipments using a Question & Answer email system and make bids.  Shippers then view the details of the bid and can ask the Service Provider additional questions before accepting or declining the bid.

When a Shipper accepts a bid, the match is complete, and the Shipper and Service Provider are given each others direct contact information to arrange the final pick-up, delivery, and payment details.
 
There are currently no listing or match fees for Shippers. Service Providers only pay a match fee if their bid is accepted by the shipper. The match fee is 7.9% of the accepted bid price with a minimum fee of $1.00. uShip uses this example:  If a Service Provider selects a shipment with a $100 offer price and is approved by the shipper, he is charged 7.9% of $100, or $7.90. This fee may be authorized upon match, but it will appear on the Service Provider's credit card during the first week of the month following the month of the match.
 
uShip can be used to ship anything that the law allows, even many things that traditional shippers refuse to ship, like live plants or even people, or as uShip terms it, ridesharing.  The Service Provider has the right to inspect the contents of any shipment and to refuse any prohibited or restricted items.

What makes it different
Chasen stresses that besides the shipper-base differences between uShip and the typical trucking load boards, there are other points that make uShip unique:  "We're a totally open system - we don't charge subscription fees for our Service Providers and we don't charge listing fees for Shippers. We're transaction-based which means that we only charge a fee when the Service Provider makes money.  It also enables the Service Providers the opportunity to competitively bid on the listings and this makes it a more efficient way for the Shipper to find a carrier for that shipment."

uShip's President has a message for the owner-operators and drivers of expediting: "We would like to enable them to find more business, to generate more revenue and reduce their empty miles."

uShip's original business plan called for regional shipments between Austin, Dallas and San Antonio. But the founders had to change their operational strategy very quickly when shippers starting posting listings all over the country.  This sent the founders scrambling for interstate carriers to fill the bill.
 
Analysts say there is a vast opportunity to change shipping logistics, and online auctions like uShip are on the leading edge.  uShip says that it is revolutionizing the shipping industry just like eBay did for the auction industry. 

The ebay connection
With what he perceives as a remedy to eBay shippers' pain, Chasen has focused much of his marketing efforts on customers of the leading online auctioneer. Around 30 percent of the shippers listings on uShip are ebay
items because the web location offers a lower-price option than traditional LTL shipping.

To be sure, eBay sellers often are limited to regional sales of bulky items because buyers aren't willing to pay big bucks to ship large, albeit sometimes low value, items.  As Chasen states, "Many times, transactions on the larger ebay items fall through because of the costs of shipping through traditional methods." 

"It doesn't make sense to buy an armoire on ebay for $500 and then pay $800 to ship it.  Now, we can offer a discounted price compared to retail shipping cost, while at the same time offering a shipment to a service provider.  Some of the big categories we see from ebay are home and garden, lawn furniture, business equipment and machinery, to name a few.  Other large items from ebay that we see listed on our site include vehicles and boats."

To sum up
Growing by leaps and bounds in less than two years of operation, uShip is a low-cost, convenient way for Service Providers to find backhauls and supplemental freight to enhance their bottom line by offering the private-party shipper a lower cost alternative to traditional shipping methods.

For more information, be sure to visit the comprehensive uShip web site, particularly the FAQ section and the User Agreement, both of which will answer many questions in detail.

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