The Future of Freight: Insights from Industry Leader Bill Driegert

Introduction: A Transformative Force in Logistics

The logistics industry is constantly evolving, and few individuals have had as significant an impact as Bill Driegert, the current Head of Trucking at Flexport. With a remarkable career that includes co-founding Uber Freight in 2016, Driegert has been at the forefront of innovation in the sector. In this article, we'll delve into his insights on Flexport's transformative impact on the broader logistics landscape, the ongoing supply chain crisis, and the remarkable demonstrations of emerging technology applications. We'll also explore Driegert's predictions for the trucking landscape fifty years from now, offering a unique perspective shaped by his extensive experience and innovative mindset.

Flexport's Acquisition of Shopify Logistics: A Game-Changer

In June 2023, Flexport acquired Shopify Logistics, a move that has significantly influenced Driegert's role and the company's direction. The merger of the two teams has accelerated Flexport's goals and created a powerful synergy of motivations, cultures, and capabilities. Driegert sees this as an opportunity to build upon existing ideas that have become common in the market, but now on a global scale across a broader set of services.

The acquisition has provided Flexport with:

• Significant acceleration with customers
• The ability to be more patient, targeted, and thoughtful in scaling and going to market
• A chance to build on current capabilities while treating it like a greenfield build

This strategic move has positioned Flexport to make an even more significant impact on the logistics landscape, leveraging its unique advantage in simplifying global freight.

Flexport's Vision: Building a Global "Conveyor"

Flexport's ambitious vision, as described by Driegert, is to construct a "conveyor from the East to the West." This metaphor signifies the company's goal of creating a continuous, efficient movement of goods between any two countries worldwide. The aim is to remove friction from the incredibly complex process of global freight movements, with trucking being a crucial component.

Key aspects of Flexport's vision include:

• Streamlining transportation of goods between any two countries
• Removing friction from the complex process of global freight movements
• Making global trade easy for everyone
• Enhancing freight efficiency to improve quality of life globally
• Simplifying operations for carriers and providers

Driegert believes that Flexport's unique combination of scale, ambition, talent, and culture positions the company to tackle this challenging mission effectively. By simplifying operations for carriers and providers, Flexport aims to make life easier for shippers and merchants, ultimately leading to more accessible and affordable goods worldwide.

Key Takeaways from the Supply Chain Crisis

The recent supply chain crisis, exacerbated by factors such as COVID-19 and subsequent lockdowns, has reshaped the freight and supply chain industry. Driegert highlights several key takeaways from this period:

• Exposure of process gaps in many shippers' operations
• Massive network disruptions coupled with stimulus-driven surge in consumption
• Severe capacity shortfalls leading to carrier control of pricing from mid-2020 to early 2022
• Shippers regaining control and making permanent improvements to freight management methods in 2022-2023

Three significant shifts accelerated during this period:

1. Adoption of real-time pricing and execution for shippers
2. Reduction in contracting cycle times
3. Increase in rejection rates (30-40%) by carriers due to the time lag between pricing and actual execution

These shifts have led to a more responsive procurement process and a surge in the adoption of real-time capabilities. While the immediate crisis may have passed, the core challenges in freight persist, including its cyclical and unpredictable nature.

Flexport's Approach to Future Mitigation

To address ongoing and future challenges in the freight industry, Flexport is focusing on several key areas:

• Advancing the shift towards touchless pricing, contracting, and execution across all modes and regions
• Improving information and intelligence
• Enhancing responsiveness and resiliency
• Running businesses mindfully, especially in the absence of Zero Interest-Rate Policy (ZIRP)

Driegert emphasizes that while external factors like global economic instability and geopolitical uncertainties cannot be directly resolved, Flexport can prepare by focusing on these areas. This approach aims to help the company and its clients navigate the challenging landscape more effectively.

The Impact of Uber Freight on the Trucking Industry

Reflecting on his experience at Uber Freight, Driegert highlights the significant impact the company had on the trucking industry:

• Pioneered a new approach enabling small carriers and owner-operators to book freight easily
• Introduced upfront fixed pricing and one-touch booking, revolutionizing the industry
• Simplified access to freight that was previously inaccessible to small carriers

This innovation transformed the industry from a system akin to Craigslist listings to a more streamlined, transparent process. Driegert sees this trend continuing to expand and believes there's a massive opportunity at Flexport to further ease access and opportunities for carriers worldwide.

Predictions for the Trucking Landscape in 50 Years

Looking ahead to the future of trucking, Driegert offers some intriguing predictions:

• Majority of truckload moves conducted by Autonomous Electric Vehicles (EVs)
• Alternate fuel drivelines and driver-pilot support for long-haul cross-country moves
• Significant footprint of lights-out manufacturing facilities (with zero personnel)
• Full AV regional shuttles becoming commonplace

Driegert believes that the winners in this future landscape will be those who can effectively integrate all these elements within their operating system and have the personnel with the sophistication to bring together the various components.

Emerging Markets and Sustainability in Freight

While the current market conditions make it challenging to identify significant growth areas, Driegert notes some trends in the freight industry:

• Consolidation of market share by tech-driven brokers and top-tier intermediaries
• Expansion of small carriers empowered by technology
• Potential for either consolidation or fragmentation in the market, depending on how technology is distributed

Regarding sustainability, Driegert highlights California's mandate for electric drayage trucks and expresses enthusiasm for shepherding the market towards a more sustainable future. He emphasizes that Flexport's focus on simplifying freight inherently leads to greater network efficiency and truck utilization, resulting in less waste across the supply chain.

Conclusion: Embracing the Future of Freight

As we look to the future of the freight and supply chain industry, it's clear that technology, sustainability, and adaptability will play crucial roles. Flexport, under the guidance of industry leaders like Bill Driegert, is well-positioned to lead this transformation. By focusing on simplifying global trade, enhancing efficiency, and embracing innovative technologies, the company aims to create a more accessible, affordable, and sustainable future for logistics worldwide.

As the industry continues to evolve, it will be fascinating to see how Flexport's vision of a global "conveyor" materializes and how predictions for the future of trucking come to fruition. One thing is certain: the freight industry is on the cusp of a revolutionary transformation, and companies that can adapt and innovate will be at the forefront of this exciting new era.