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I'm in that space right now and yeah, the state of the technology is horrible, but I think there are some real barriers to disruption. At first glance a compar

I'm in that space right now and yeah, the state of the technology is horrible, but I think there are some real barriers to disruption. At first glance a comparison to Uber disrupting the taxi market seems like a good one. But I would estimate that 75% of the work is responding to something going wrong, so it is going to be very different situation since you are not going to get the real cost savings until there is a system that can start handling the edge cases. Also, the margins are low. Average around 15%. Uber is currently taking 25% and still hemorrhaging money. So it is a harder problem to automate and it needs to be done at a lower margin. I'm sure it will happen someday, but I think it's 5-10 years out or more.

ryanmarsh 7y ago
Yes the software for even intermodal is pretty simple. The complexity comes from the human idiosyncrasies, including those of the customers. The transportation departments of some of the larger shippers can be very demanding, and a total shit show at the smaller ones. Amazon has the power to make them adapt.
CriticalCathed 7y ago
Since you appear to know some about UBER: What is UBER spending money on? They don't own the cars, they skim off of drivers. I presume the only costs they should have are infrastructure maintenance, software development, and insurance (if they do it in house?) On the surface it seems like they have a license to print money.
- NotSammyHagar 7y ago
  They are subsidizing the fares, for one thing. Every ride costs them a few dollars of loss.
  - csomar 7y ago
    What do you mean by their margin is 25% if they are subsidizing the fares?
    - bostik 7y ago
      As far as I understand, this can be distilled down to: 1: Uber is charging 25% commission for the use of their platform 2: Uber is still losing money Which means that in order for them to break even they would need to charge a higher commission at the existing fare rates, or bump the fares to a level where their commission covered their costs. Well... There's always the third option too: cut their own cost base significantly. Each of those options carries an economic impact and knock-on effects.

ryanmarsh 7y ago

Yes the software for even intermodal is pretty simple. The complexity comes from the human idiosyncrasies, including those of the customers. The transportation departments of some of the larger shippers can be very demanding, and a total shit show at the smaller ones. Amazon has the power to make them adapt.

CriticalCathed 7y ago

Since you appear to know some about UBER: What is UBER spending money on? They don't own the cars, they skim off of drivers. I presume the only costs they should have are infrastructure maintenance, software development, and insurance (if they do it in house?) On the surface it seems like they have a license to print money.

NotSammyHagar 7y ago
They are subsidizing the fares, for one thing. Every ride costs them a few dollars of loss.
- csomar 7y ago
  What do you mean by their margin is 25% if they are subsidizing the fares?
  - bostik 7y ago
    As far as I understand, this can be distilled down to: 1: Uber is charging 25% commission for the use of their platform 2: Uber is still losing money Which means that in order for them to break even they would need to charge a higher commission at the existing fare rates, or bump the fares to a level where their commission covered their costs. Well... There's always the third option too: cut their own cost base significantly. Each of those options carries an economic impact and knock-on effects.