Some Chicago startups are working to digitize the logistics space, something that is especially important for the trucking industry.
“This was and is the physical capital of logistics in the U.S. and North America, and I think it's only appropriate that this continues to be the digital capital of logistics in North America and globally,” Lior Ron, head of Uber Freight, Uber’s logistics division headquartered in Chicago.
He was speaking at the Chicago Venture Summit Future-of-Logistics event earlier this month. The summit brought together Chicago’s logistics sector, one of the city’s fastest growing industries. The number of Chicago-based logistics tech companies nearly doubled between 2019 and 2021.
Ron thinks the industry is at a crossroads. With more older truckers getting ready to retire, he voiced concerns over its future with fewer younger truckers entering the industry to replace them.
“This is not a desirable profession, and the average age of a truck driver in the U.S. was 35, 20 years ago, it was 45, 10 years ago and is now 55. The same Baby Boomers are aging out of the industry,” Ron explained. “The reality is if we don’t do something about that … we will not have enough capacity to support all of that ecosystem."
One innovation that may reshape the logistics sector and supply chain in general is self-driving trucks, but the question is whether the technologies will be widely operational in time to replace aging truckers.
“The era of self-driving and autonomous driving is upon us,” Ron said. “We are moving dozens of autonomous loads as we speak in Texas, between Dallas and Houston, with a driver still in seat but not touching the wheel.”
Similar to Uber Freight, CDL 1000, a Chicago startup that's become a key player in the logistics space, sees the potential future in self-driving trucks.
No. 3 on Inc. magazine's 2022 rankings of the 5,000 fastest-growing U.S. private businesses, the company announced last week that it's launching a new service — Demurrage as a Service (DaaS) — to help customers save money by avoiding late fees.
CDL 1000 also recently committed $100 million to digitize the drayage space. Drayage refers to the transportation of freight from an ocean port to a destination and is often described as the "the first mile."
CDL 1000 founder and CEO Andrew Sobko told Chicago Inno that while he thinks self-driving trucks may be the future, he still has significant safety concerns.
“I personally see it working on long-haul trucking, but not for short-haul trucking because it is too complicated," he said.
Sobko also thinks self-driving trucks may have more competition coming from the railroads, which may also start incorporating self-driving tech.
Ron envisions having a hybrid network with an Uber Freight driver driving the first mile — the complicated drive from the facility to the highway — and the self-driving truck taking over and running for anywhere from five to 200 miles autonomously.
“That future is upon us and it could have foundational implications for everything logistics,” he said.
