How Uber Freight is working to ease congestion at the ports

Lior Ron, Uber Freight Head, discusses how the company is working to alleviate port congestion amid the ongoing truck driver shortage.

Video transcript

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ZACK GUZMAN: Welcome back. As we've been discussing for weeks, maybe even months now, supply chain issues have continued to cause a problem across all kinds of sectors in this pandemic recovery. And something that's making it worse actually began way before the pandemic hit, that is a shortage of truckers here in the United States. In fact, the American Trucking Association puts that at a shortage of about 80,000 drivers, an all-time high when they looked at it. And pay continues to rise to attract more of them, rising five times as fast as the historical average, according to their chief economist.

And for more on all of those issues, very happy to welcome back into the show here, the head of Uber Freight, Lior Ron joins us here. And Lior, when we're looking at the issue, obviously, Uber has a lot of technology to help in these kinds of supply chain issues in terms of freight. And that's what you guys are working on. But if the main cause here tends to be human shortage of labor, how bad are things right now? And how tough is the stack right now against the technology trying to help?

LIOR RON: Thanks for having me again, discussing this super-important topic. It's bad. There's a lot of shortage because, as you just covered, the runway in other companies-- we all accustomed now to order more and more and more goods and shifting a lot of our spend as consumers from services to goods. And in the end of the day, there's a truck driver behind that box that we're ordering. And the system is just completely over-flooded with demand.

We're living now in a 2X more demand compared to last year with less truck drivers compared to pre-pandemic. So as a result, there's just a lot of demand for those services. And there's just not enough capacity to go around.

AKIKO FUJITA: Yeah, two times more demand, I mean, that certainly speaks to the real supply-demand imbalance that we're seeing play out. You mentioned the shortage that we saw even going into the pandemic. I know more truckers have pulled back during the pandemic as well. But there's also this competition between long haul and short haul.

And I know that Uber afraid has focused more on long haul. How many of these drivers are you losing to more competitive prices that can be found in this last-mile delivery?

LIOR RON: That is a great question. Truck drivers are choosing to go to last-mile. They're choosing to go to construction. They're choosing to go to more local jobs because life on the road is hard. Being away from the family 250 days a year, being stuck in facilities waiting to load and unload for eight hours a time, driving empty because the system is inefficient, we see that we had a drop in truck driver capacity over the pandemic.

A lot of them chose to do other jobs. A lot of them chose to maybe accelerate their retirement. The average age of a truck driver is 55 in the United States. A lot of them are choosing to stay home because of health concerns. So there's definitely ample of choices out there in terms of labor. And if we want the economy to keep moving, then we need to invest in those truck drivers. And we need to equip them with the best of breed technology to allow them to be more efficient and to allow them to be more competitive.

ZACK GUZMAN: Yeah, I wonder how much of that really is convenience versus also, I guess, some of the realities of where technology is maybe eating into the share of what the future of trucking looks like for these drivers, given the fact that we are seeing the rise of autonomous driving in the longer haul, kind of highway portions of these drives.

Of course, Uber sold off the self-driving technology piece of the business a while ago. But I mean, how important is that still in terms of the top endeavors there at Uber to really tackle it and maybe solve it in terms of what you're working on at Uber Freight?

LIOR RON: Autonomous will happen. And we're excited to be part of the future when that happens. But we're still far away from full commercial reality at scale. So I don't think it impacts truck driver choices on their profession. What impacts is those challenges.

So what we're focusing now is how can we help those challenges by providing them better tools, by allowing them to minimize their empty miles, by allowing them to have more committed capacity to utilize their trucks. It's about helping them with technology now to make it more bearable on the road.

Autonomous will play a part, but it will play a part in the far future. And it's not really impacting their choices today.

AKIKO FUJITA: In terms of the problem we're seeing play out right now, we have seen the ports in LA and Long Beach move to this 24-hour operation. But the criticism on the back of that was that, well, if you don't have the trucks standing by, you're not going to get the pipeline going. To what extent are you in communication with some of the ports to try and accelerate the deliveries and maybe facilitate some of this backlog or help facilitate and process some of this backlog?

LIOR RON: Super-important. There's a massive basically jam into the ports in Long Beach and other ports. And although we're not operating directly in the port, we focus on how can we move those containers as fast as humanly possible once they exit the port into inland. There's actually two or three truck movements from the port to a distribution center just outside of the port and then from there to a host of other destinations across the US.

So it's really about finding, how can we just move those containers as fast as possible outside of the port to a destination? And how can we get those containers as fast as possible back to the port so they're available for the next unloading and to send them back over the ocean. And we do that by, first of all, just tapping to more and more truck drivers.

We now have the largest digital network in the United States with over a million truck drivers. And equipping them with our technology that allow them to not run empty and minimize empty miles so they can actually go back from wherever they're going. We can find them the load to go back to the origin and to the port as fast as possible.

Or it's about allowing them to actually pay past there. We actually just launched a wallet product to allow to pay those truck drivers within two hours. So they can get their earnings and be on the road faster and have that financial stability.

And it's just a host of other things that we are doing to support them. And I'll end by saying, we are seeing a resurgence. So I think there is hope. We are seeing a resurgence of small owner-operators that are coming back to the market massively because the prices are elevated, because it's easier for them to do business.

We're actually now at a 3X higher registration of new trucking companies compared to any year in history.

ZACK GUZMAN: Yeah, some of that optimism there in terms of things getting addressed and problems getting solved. But Lior Ron, the head of Uber Freight, appreciate you coming on here to chat with us. Thanks again for the time.