How to Become the Top Online Shipping Marketplace

Moving is hard. Not only because of the changes it entails but because you have to pack things up without losing, forgetting, or breaking anything. The good news is that there are a lot of carrier companies ready to help you. The bad news is that not all of these companies can meet your needs, and some may even damage your stuff or scam you.

That’s why Matt Chasen founded uShip — a digital marketplace that matches people who need to move things with those who need to fill space in their vehicles. Matt came up with the uShip concept while moving from Seattle to Austin in a half-empty truck. 

This idea was with Matt the whole time he studied at the McCombs School of Business, and he launched the uShip website right after he graduated in 2004. Now, with funding of $69.7 million, uShip is one of the biggest online shipping platforms. uShip’s services are available worldwide, and you can find over 18 localized versions of the uShip site. Matt’s company helps millions of users transport shipments of nearly any kind and claims that new freight gets posted on the service every 30 seconds. 

Services from uShip are useful not only for people who move. The other side of the idea was to help the trucking industry with the problem of deadhead miles — legs that trucks drive empty before picking something up. According to research by the Environmental Defense Fund, 15 to 25 percent of trucks in the US ride empty at any given time, and 36 percent of space in trailers is underutilized. This is probably why many big companies, including Amazon and Uber, are striving to create their own online services for the trucking industry.

What trucking industry problems do platforms like uShip solve?

The trucking industry drove nearly $740 billion in revenue from freight in the US in the last two years. Nevertheless, this industry sees a lot of losses due to empty miles and a shortage of drivers. And one of the main sources of these problems is a highly fragmented market.

According to The Economist, only 20 percent of the shipping market is held by huge logistics firms in the US, such as C.H. Robinson and XPO Logistics. The Trucker Path blog says that about 80 percent of trucking companies are working with no more than six trucks. Most of these companies and solo truckers depend on brokers who make calls to find loads for them. This operating model, however, is inefficient and fails to adopt the latest technologies.

Read also:How You Can Develop an Uber for Trucking

As you can see, the target audience of uShip and similar services is individuals and businesses, on the one hand (which can use the platform to deliver their products), and logistics businesses and brokers, on the other. uShip, for example, partners with eBay and Ritchie Bros to help them ship their goods locally and internationally. eBay states that its buyers and sellers have saved more than $20 million thanks to cooperation with uShip.

In an interview for Business Insider, Transfix CEO and co-founder Drew McElroy says that drivers and shippers still have a lot of problems related to inefficient cooperation. This is exactly where an online shipping platform can come into play and bring together small companies, solo truckers, and their clients.

If you’re wondering why we keep talking about uShip, let us explain. We picked this service as a great example of a shipping e-marketplace that has both strengths (which helped it grow big) and weaknesses (which can be slightly reworked). So let’s explore what we can learn from uShip’s experience.

What are uShip’s main strengths?

uShip was the first company to transport almost anything: furniture, vehicles, even adorable kittens! And all of that can be moved by any kind of transport: trailers, vans, or giant trucks. This wouldn’t have been possible without an easy-to-use and continually expanding set of online tools. Let’s look at the top uShip functionality.

Shipment listings and price estimates

The whole idea of uShip is that customers can create shipments through either the mobile app or web application. The service requests important information about each shipment, including the type of freight, its weight, dimensions, and quantity, and pick-up and delivery points. This information helps to efficiently match shippers with carriers and avoid misunderstandings.

After a shipment is listed, the shipper starts receiving bids from service providers. To make a well-considered decision, shippers can view the public profiles of these services providers and see their experience, ratings, shipper reviews, and service history. This way a shipper can find a service provider with an attractive price and a good reputation.

Creating a shipment listing on uShip

[Creating a shipment listing on uShip]

uShip also lets users calculate the approximate delivery cost. Traditional online services offer estimates and brokership via email and phone. uShip, on the other hand, is online only, and users can get a cost estimate before placing a listing. Delivery estimates are based on data for similar shipments made via uShip and its partners, but that still doesn’t guarantee total accuracy.

To attract new customers, uShip also offers a similar shipping calculator to estimate the delivery cost before even registering with the app and creating a shipment listing. The accuracy of this tool is a bit lower than the one used while placing an actual shipment request, but it still helps users get an approximate price tag and decide if it’s worth using the service.

Notifications

uShip relies on push notifications to match users and inform them of important things. For example, uShip alerts carriers about nearby shipments. Carriers can customize notifications with filters such as freight type, price, and location to be matched with suitable shippers.

Notification options for carriers on uShip

[Notification options for carriers on uShip]

Shippers can receive alerts about the status of their shipments, from request processing to delivery. 

Built-in payment system

uShip pays attention to payment security. That’s why this shipment company has integrated the Stripe payment system so users can connect a credit card or link their PayPal account. It’s against uShip’s policy to use instant cash transfer systems like Western Union to pay for services on the platform, as these payment services don’t provide information that’s necessary in case users open a dispute or are accused of fraud. 

Depending on the type of shipment, users can choose between full prepayment during checkout or paying a deposit. Payment methods are usually specified by service providers at the very beginning of the negotiation. 

Prepayment in full is usually required for shipments costing less than $2,750. In this case, users pay for their shipping via Stripe while booking. Payment is only released to the carrier when the shipper confirms successful delivery. This can be done either by the shipper pressing a Release Payment button in the app or by the shipper passing a special payment code to the carrier upon delivery. This way, uShip guarantees safety for users.   

Deposit bookings work for shipments estimated at $2,750 or more. Using this payment option, shippers pay a certain amount of money through the uShip web or mobile app and pay the remaining sum to the carrier directly. Carriers usually specify a desired method of payment within the payment terms in their quote. It can be cash, credit card, or PayPal. 

uShip Pro package

Individual shippers, businesses, brokers, and logistics companies can use the uShip Pro package with a set of advanced features: integration with transportation management systems, a dedicated mobile app, networking, and automated load alerts.

Ship with Confidence Guarantee

When it comes to payment issues or lost or damaged cargo, uShip users can rely on the Ship with Confidence Guarantee (SWCG). This is a dispute resolution system that allows users to report any problems with cargo or a carrier. According to the SWCG, users have to inform uShip within fifteen days of delivery or thirty days of booking to get a refund or solve a problem.

Cargo insurance

Most carriers on uShip provide some kind of insurance of their own. But to be on the safe side, uShip has partnered with third-party insurance companies to provide users coverage if their cargo is lost or damaged. uShip insurance is not obligatory and is offered at additional cost depending on the value that shippers claim for their shipments. Compensation is paid out once a shipper proves cargo damage or loss. 

To file a claim in case of any shipment issues, users have to fill in a claim form and supply any supporting documents or media files:

Filing a claim on uShip

[Filing a claim on uShip]

What uShip features could be improved?

Thanks to its customer-oriented functionality, uShip managed to develop a successful Uber-like app for the trucking industry. Still, there’s room for improvement. If you avoid these issues in your own shipping marketplace, you’ll surely stand out from your competitors.

Simple profile set-up and verification

Shippers and carriers can quickly sign up and start using uShip by providing a name, email, and phone number. Carriers are also required to provide details about their company along with optional information like their Motor Carrier Number. In addition, carriers have to upload photos of their equipment and pass a Stripe verification procedure. 

Registration for carriers on uShip

[Registration for carriers on uShip]

However, such an easy registration process for carriers increases the chance of fraud. Anyone can sign up as a carrier and book a shipment even before they’re verified. We actually registered a fake shipper account and a fake carrier account without even providing an MC number or insurance number. This allowed us to effortlessly contact our fake shipper account and “offer” delivery services outside uShip. 

In the interface for asking a question, uShip will flag any contact information until a carrier submits a quote. But once a quote is submitted, a carrier can leave his or her contact information, which will be visible for all users on the platform.

Submitting a quote on uShip

[Submitting a quote on uShip]

Of course, uShip can later block the comment and even block the carrier, but there’s still a chance that some users may fall victim to the scam. And for uShip, such an easy way to give out contact information to shippers means potential monetary losses and reputation problems.

Shipment tracking 

All authenticated users can track their shipments in real time, as uShip is a location-aware application that uses GPS technology combined with the Google Maps API. If a carrier opts in for location sharing from their app, the shipper will be able to track the shipment on the map in real time. Moreover, with GPS on or off, the shipper will see the contact information of the service provider.

Tracking a shipment on a map in uShip

[Tracking a shipment on a map in uShip]

The downside of this shipment tracking system is that users don’t know where their shipments are when location sharing is turned off on a carrier’s device.  

Bills of lading

A bill of lading (BOL) is a document that’s similar to a receipt and contains detailed information about a shipment. If the information in the BOL is different from the actual state of the shipment upon arrival, the receiving party can start a dispute and use the BOL to prove that the shipment was somehow changed or damaged.

To get a BOL on uShip, users have to fill out a form and describe the state of their shipment in detail. After that, they have to download the BOL as a PDF file, print out multiple copies, and give them to carriers. Yep, that’s right. While everything’s online in uShip, there’s still some actual paperwork that has to be done with every single shipment. We can only imagine the amount of paperwork when sending multiple cargos at once. 

How to turn these weaknesses into strengths

We’ve carefully analyzed uShip’s competitors and tried their apps. Here’s a list of improvements to help you build a great marketplace platform for connecting shippers with carriers.

Improved security

As we’ve mentioned, anyone with a verified Stripe account can become a carrier on uShip. Unfortunately, this allows the possibility for dishonest people to act as service providers and get money from users in violation of the platform's rules. Even though cargo insurance or SWCG can help shippers claim compensation in case of fraud, these users will still have a negative user experience and may not want to come back to the platform, instead leaving negative feedback and causing reputational damage. 

A more sophisticated carrier and broker verification mechanism could fix that. If you look at Uber Freight, you’ll find it requires carriers to provide a multi-combination licence or permission from the Federal Motor Carrier Safety Administration (FMCSA). And one more good idea would be to partner with FMCSA to check carriers that have low ratings.

Additionally, Uber Freight regularly verifies the insurance that registered carriers provide. If it’s less than $100,000, Uber Freight might restrict access to the carrier until they meet the insurance requirements.

Enhanced communication

The main purpose of an online shipping marketplace software is to connect carriers and shippers. Notifications alone aren’t enough to accomplish this.

uShip allows users to ask and answer questions about quotes. But you can go further and implement real-time chat in your app. Chat will help carriers and shippers stay in touch, which is especially important in case of emergencies. Moreover, you could offer chat rooms for communication between users and their brokers or brokers and the carriers they work with. 

Evolved tracking

If carriers don’t turn on location sharing in their uShip app, users can’t track their shipments at all. Moreover, carriers quite often rely on partners that don’t have the uShip app installed, so there’s no way of tracking shipments in this case either. You could solve this problem by integrating with, say, the one by United Postal Union or any similar parcel tracking database and providing shippers with tracking codes or QR codes with details on their cargo. This way shippers could see delivery milestones along with approximate delivery times once carriers checked in on the delivery route.

Easily accessible BOLs

Uber Freight has made it possible to submit proof of delivery via the app by allowing shippers to take pictures of signed BOLs and send them to carriers or brokers. You could do that as well, but a better idea would be to let shippers sign documents digitally (just like in the Roadie app) and share PDF files of BOLs right in a chat with a broker or carrier if necessary. This way you’ll reduce the amount of paperwork and the number of mistakes when filling in information about cargo due to low-quality pictures taken on the go.

As you can see, there’s still a need for developing strong online freight services. These services should help the trucking industry continue driving toward more efficient use of resources. An Uber for trucking model is the best solution to the most common problems of carriers and shippers. But you shouldn’t just build an Uber or uShip clone app. You can create a constantly developing and innovative marketplace app. If you need help with custom marketplace app development, feel free to contact us.

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