MAN Truck & Bus invests $8.5M in logistics startup FR8 Revolution
31 May 2016
MAN Truck & Bus AG, part of Volkswagen Truck & Bus, is investing up to $8.5 million in the US start-up FR8 Revolution Inc. (“Fr-eight”). Silicon-Valley-based FR8 has developed a comprehensive “operating system” for a connected transportation industry that will be launched in the second quarter of 2016. The IT platform will provide shippers, carriers, and truck drivers with a uniform and transparent platform for planning cargoes based on real-time data.
Currently, around 12,000 freight brokers in the US act as intermediaries for free-loading capacities between shippers and carriers via telephone, e-mail, and fax. The system is highly fragmented and thus often very inefficient; it is difficult to compare prices and costs for mediation are high. The FR8 system aims to support all parties involved in the process of this ecosystem, to leverage the existing potential, and to make it significantly more efficient.
MAN Truck & Bus intends to participate actively in shaping the digital transformation of the industry, gain experience, and transfer business models to Europe. The system will be launched together with various partners in the US: groups of traders, fleet operators, freight brokers, and shippers.
The logistics industry is not working as economically as it could. All parties involved still have limited access to real-time data. Where are the trucks currently located? Do they have free loading capacities? What are the current prices? What is the current driving period of the truck driver? To this date, almost 35% of the freight volume is not used at all or not used efficiently which is neither economical nor environmentally friendly. In collaborating with FR8, we can open up new possibilities for changing the system in Europe.
—Joachim Drees, Chief Executive Officer of MAN SE and MAN Truck & Bus AG
In Europe, too, haulers, dispatchers, and truck drivers lack sufficient information on logistics processes using a variety of different IT systems.
The system developed by FR8 has been designed as an open platform across brands. This provides the opportunity to integrate apps for all target groups. Shippers, for example, can view current freight rates, locate the truck's position, and manage invoices.
Carriers, for example, can view freight plans of all trucks on one screen only; in addition, they can enter free loading capacities on the electronic freight exchange or manage the drivers’ time behind the wheel and rest periods.
The drivers are connected online with the carriers, can view their route planning and change them if necessary; they also receive information on when the next visit to a workshop is due.
Digitization is fundamentally changing the world of transportation. Connected services help our customers to be more productive and competitive while opening up completely new business areas. We will be changing more and more from a truck manufacturer into a provider of intelligent transportation solutions. Our partnership with FR8 will bring us one step closer to this goal. We would like to transfer our experience and ideas to Europe as well as to our brands.
—Andreas Renschler, Member of the Board of Management of Volkswagen AG and CEO of Volkswagen Truck & Bus GmbH
Volkswagen Truck & Bus has sold more than 200,000 networked trucks from MAN and Scania. As of 2017, every new truck from the production line will be online. For this reason, Volkswagen Truck & Bus has announced that it will make a three-digit million investment into digital technologies. Today, more than 300 employees at MAN and Scania already work on digital innovation.
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