Ocean Spray Says Uber Freight Provides The Right Balance Of Service And Cost

Last week, Ocean Spray announced that Uber Freight is now one of its top five carriers, having moved more than 1,500 loads for Ocean Spray in 2018. Ocean Spray is a cooperative of more than 700 family-owned cranberry farms that harvest more than 220 billion cranberries a year for more than 1,000 different products, including cranberry sauce, dried cranberries, and cranberry juice.

Many of Ocean Spray's farmers are from multi-generational farming families, and one of the company's core duties, according to CEO Bobby Chacko, is leveraging technology to innovate and usher these businesses into the future. An intelligent, efficient supply chain is a key element of that strategy. 

Uber Freight's digital freight brokerage platform allows shippers to find capacity from small carriers and book them quickly, without having to haggle over price. Uber Freight brought in more than $370 million in gross revenue last year, and recently announced an expansion into Europe. Although Uber Freight – categorized under ‘Other Bets' in Uber's financial reporting – is a relatively insignificant part of Uber Technologies Inc UBER, it's expected to grow quickly over the next four years.

In Morgan Stanley's initiation report on the company, analysts wrote that they expected Uber Freight to grow at an 85 percent compound annual growth rate from 2018 to 2023, transforming the brokerage into a $3.9 billion business by 2021.

Deutsche Bank said that positive feedback from shippers on their partnership with Uber Freight was one of the biggest positive surprises during its research prior to initiating coverage of Uber.

"Throughout the course of our diligence the feedback on Uber Freight was the biggest positive to us," Deutsche Bank said in its initiation note on June 4.

FreightWaves spoke to Earl Larson, Ocean Spray's vice president of global supply chain and operations for cranberries, by telephone.

"This business revolves a lot around capacity in the market, and with many of the conditions working against shippers the last couple of years, we've tried to be on top of emerging trends and solutions to find capacity," Larson said.

After the harvest, cranberries are brought from a farmer's bog to an Ocean Spray facility within 24 hours, Larson explained. While there's no precise deadline on when the berries have to be transported from the farm, the sooner the better, Larson said, adding that "it's a beautiful and hectic time of year."

After the cranberries are in Ocean Spray's network, there are really two kinds of additional moves that Ocean Spray's carriers have to perform. The first is inter-company transfers, in which product moves between Ocean Spray facilities in different regions or in different parts of the world. Finally, Ocean Spray has to find trucking capacity to deliver its products to its customers, many of them grocery stores.

Larson cited increasingly strict on-time and in-full service requirements from Ocean Spray's  customers, and said that after a trial phase, Uber Freight proved that its platform could provide capacity that performed at the right level.

"We like to have a good mix of carriers and good relationships across a number of carriers, but not too many," Larson said. "Uber Freight fit in well, because after we trialed with them, they proved that the method and technology were delivering results, in the sense of on-time and at the right cost."

Uber Freight's technology integrated seamlessly into Ocean Spray's transportation management system, Larson said, so that his transportation managers do not have to change the way they tender loads to carriers in order to use Uber Freight's capacity.

"They work with us a lot more than what just appears on the app," Larson said.

Ocean Spray tries to source capacity from a diverse array of asset-based carriers and third-party logistics providers so that when market conditions change, Ocean Spray is flexible enough to adapt. Larson said he expects the relationship with Uber Freight to continue growing regardless of the freight cycle.

"We always look at balancing cost and service," Larson said. "Based on the success of this relationship, we can move forward no matter what the conditions in the market are."

Image Sourced From Pixabay