Why Global Supply Chains Have Been Under Pressure In Recent Times?

Synopsis

Logistics and supply chain management firm Uber Freight expanded its shipper platform during the pandemic to support a host of small businesses. The company has seen the number of small businesses using the platform grow by 10 times during this period.

Logistics moves the global economy in the 21st century

Logistics moves the global economy in the 21st century, says Lior Ron, Co-Founder and Head, Uber Freight. “It is more than 10% of the global GDP. It is a $4-trillion global market, with almost $1 trillion in the United States. Each one of us is ordering more and we expect it to arrive at our doorstep faster and faster. This is literally the biggest industry moving the economy yet it is under so much pressure,” he said, while speaking recently at the virtually held TiEcon 2022.

Talking on how small businesses played a pivotal role in the logistics industry, Ron said equipping such businesses with the right technology was of utmost importance. “We now have 1.7 million truck drivers on the platform as it is so easy to use. This is the largest profession in the United States and globally. For us, it is all about how we can equalise the playing field for the smaller players and what kind of technology can allow them to compete better.”

Ron was bullish about the opportunities available in this industry because of technology and called it a “golden age” for entrepreneurs in the logistics space. “There are 3x-5x more registrations of truck drivers entering the market in the past 12 months than any other time in history,” he said. This despite the truck-driver profession not being an optimal one as they would be away from the family for at least 250 nights a year, sleeping at truck stops and facing other problems.

Understanding the cash flow

It is important for businesses and truck drivers to understand cash flow and all other aspects so that they can stay ahead of the curve and resolve problems as soon as possible. Ron said the company has extended services and know-how to them to help in this process. “We have helped them with credit cards and a bank account so that they can manage the cash efficiently. But they also need to manage their taxes, fuel expenses as well as insurance. If anyone thinks in terms of SMB innovation, this is the industry because there are 3 million of such businesses who are smart, adopting technology and hungry for innovation,” he said.

Addressing a question on the importance of hiring key talent, Ron said the company has added over 100 engineers to the team over the past 12 months. “We have expanded our footprint from just San Francisco to hiring engineers, tech talent, data scientists and designers in Chicago, Dallas, Seattle and New York. So, there has been a lot of success so far but also we have a lot of appetite and love to adore a team,” he stated.

Various Covid waves

Talking about how the various Covid waves have been unpredictable, Ron said the post-pandemic era would give us unique insights into consumer behaviour. “We are living in interesting times. How consumers actually act and behave and move between goods and services will be seen. But it is getting better as peak supply is much more than before. It is easier with the demand but there is still a lot of volatility. It is going to get better towards the end of this year but it is still going to be an unknown territory. Technology can play a very important role.”

Delving more on the supply chain, Ron said it was an exciting time in terms of the vast opportunities that lie ahead. “We are living in a golden age of supply chain innovation. More enterprises and startups are going into this industry because they see the massive market size,” he added.

Global supply chains have been under severe pressure in the aftermath of the pandemic with freight rates soaring, material shortages crimping industries and labour unavailability posing a key challenge.