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The two forces reshaping the landscape of shipping and logistics

The shipping and logistics space is being rapidly transformed by technology. Innovations in this space span the way buyers and sellers transact (digital freight brokerages), the way goods are monitored during shipment (sensor-enabled real-time monitoring) and the manner in which risk is managed (novel approaches to pricing insurance). With diverse opportunities like these, it is no surprise that this is a space ripe for significant disruption.

And yet technology is not the only force driving change. Regulators are taking a fresh look at the lives of workers in the gig economy, often concluding that many folks classified as independent contractors ought to be treated as employees. As we will see, this is causing a sharp uptick in the creation of small-motor carriers. At the same time, oddly enough, driver scarcity is forcing innovators in the shipping and logistics space to think very hard about how to entice new drivers into the market.

Two forces — driver scarcity and regulation — are working in unison to forge the shipping and logistics space of tomorrow. Before we dive into precisely how this is happening, let me introduce the dramatis personnae in this ecosystem:

  • Shippers — These are the folks who have goods that need to be moved from point A to point B.
  • Carriers — These are the folks who shippers hire to load goods on a truck and move them from point A to point B. I will use carriers and small-motor carriers as interchangeable terms.
  • Brokers — These are the people who connect shippers with carriers, often doing the hard work of making sure that carriers are properly licensed and have the appropriate levels of insurance.
  • FMCSA — Federal Motor Carrier Safety Administration, the body responsible for facilitating safety programs, licensing motor carriers and ensuring compliance with a wide range of shipping and transportation rules and regulations.  

A tale of software and shipping

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