FR8Star CEO Matt Kropp brings an outsider's fresh perspective to trucking technology. In this exclusive interview, he shares his thoughts on ELDs, autonomous trucks, blockchain, and more.
While the potential for blockchain technology to transform how the business of transportation is conducted is real and exciting, it’s not here yet. But technology currently available can allow small fleets and owner-operators to take advantage of systems and processes that will one day scale up to full-blown blockchain operations.
That’s how Matt Kropp, CEO of FR8Star, characterizes his company, which uses mobile apps and real-time data from customers to put shippers, loads and trucks together as quickly and efficiently as possible for flatbed and heavy-haul fleets and owner-operators.
Kropp has been on the forefront of emerging technology since the 1990s, and founded a company that he says is the leading venue for processing medical records for organ donors today. He eventually found himself consulting with Daimler on telematics and communication technologies, before founding FR8Star.
In March, Kropp raised eyebrows by presenting the Austin’s hip, trendy, and decidedly non-trucking-oriented South By Southwest (SXSW) music and technology fair to raise awareness about cutting edge transportation technology and the importance of trucking in today’s fast-changing global economy.
In this exclusive HDT interview, Kropp talks about FR8Star, as well as current and future transportation and technology trends that will affect trucking on both macro and micro levels soon.
HDT: You started out as a software developer with no background in trucking until your consulting work with Daimler. And now you’re attempting to revolutionize how fleets and small carriers conduct business today. How did that happen?
Kropp: During my time working with Daimler, I started thinking about various digital strategies in trucking and how to use the increasing amounts of data coming off of trucks to help fleets make more money. And that eventually led to founding FR8Star, which is all about using technology to create a new marketplace that is a better way for shippers and carriers to get together and move loads.
HDT: So you’re leveraging the big data revolution that is starting to transform trucking?
Kropp: Yes. But – I know this is a trite phrase -- I was more interested in the democratization of that technology. Yes, there is a Big Data revolution taking place. But it’s primarily the large fleets that have the assets in place to take advantage of that technology. At the same time, costs for more accessible types of technology – smartphones, for example – are coming down. So that seemed like a good way to bring this type of technology and capability down to a level where smaller fleets and operators could take advantage of it.
HDT: So you think there’s still a considerable lag between a lot of technology and its accessibility for your target customer base?
Kropp: Without question. My research found that many of the cutting-edge technologies today are primarily being used by large fleets, because there’s just not enough benefit there to justify the high acquisition costs for smaller players. Even today, most small carriers you talk to don’t have Omnitracs or GPS tracking or systems like that. However, they all have smartphones, and now – no matter what you think of them – they also have ELDs in their trucks. And these systems can deliver the same functions as a service like Omnitracs right from the cab or a truck or even via a phone in the driver’s pocket. This technology isn’t free, but it is available at a very low cost.
"Today, most small carriers you talk to don’t have Omnitracs or GPS tracking or systems like that."
HDT: How do you use the information generated by an ELD or a smartphone to enable better business transactions?
Kropp: Well, now we have vital location and condition information from every one of our carrier customers available. We know the available hours of every driver we work with, for example. And all of that makes it much easier for us to match up the right truck and the right driver with the right load. And shippers are better off, as well. Because their load can be matched up quicker with a closer truck. And they can probably get a better shipping rate in the process.
HDT: I don’t mean this to sound demeaning, but it sounds sort of like “blockchain light.”
Kropp (laughing): I like that. And it’s not a bad analogy. In many ways, a truck moving freight from Point A to Point B is the perfect basis for blockchain. And once the load arrives, the payment is automatically released. That is, at its core, what blockchain is designed and intended to do. And I think we’ll see that eventually. But we’re not there yet. And I don’t think the industry is ready to adopt it yet. Because there are still a lot of practical issues that still have to be worked out. Right now, blockchain works in the sense that you can set up specific conditions for a shipment: The load will be picked up between these times, and delivered at its destination between these times. But blockchain still can’t account for all the variables and uncertainty that drivers deal with every day – things like weather, traffic congestion, running out of hours, breakdowns or something as common as the shipper simply isn’t ready to go. We see that all the time with our heavy-haul customers – a crane, for example, isn’t there in time to be loaded per the contract. There is a promise of eventually transparency and flexibility in blockchain. But we have a ways to go before we’ll be at that point. In the meantime, we need to take baby steps and use the technology we have now to work smarter and better. There are still a lot of trucks out on the road today without any kind of tracking technology on them at all. ELDs are a major first step toward enabling blockchain. And in the short term, they will at least provide location and tracking data that can be used for systems and solutions like ours.
HDT: There’s a lot of pushback on ELDs, though.
Kropp: Yes. And it’s understandable. Driving a truck is a hard job; you’re away from home a long time, and 11 hours behind the wheel makes for a long work day. And traditionally, one of the benefits of the job was that you were essentially your own boss: You’re in charge of a load and getting it to its destination on time. And anything that puts constraints on that way of working takes away from that experience.
HDT: It’s ironic that drivers who didn’t want a boss looking over their shoulder all day are now sometimes being monitored more than someone who works in a office.
Kropp: Exactly. And, of course, there are real-world, practical concerns about ELDs, too. We see this a lot with heavy-haul and oversized loads. You just can’t stop those trucks anywhere. You can only get off the highways in certain places. So what happens if you’re low on hours and can’t stop? What do you do? And there are challenges for LTL fleets as well. No one wants to run out of hours 30 minutes away from a nice truck stop and have to pull off and sleep on the side of an interstate. The intent with ELDs is safety. But in practice there are significant downsides. Which is why a majority of drivers are opposed to them today.
HDT: Do you think ELDs will ever be accepted by drivers?
Kropp: What I hope happens is that we work through an initial adjustment period once the ELD mandate comes fully into effect. And once the industry works through those growing pains, I think ELDs will be really beneficial – even for drivers. Just having the ability to have the visibility to stop a driver from deadheading 500 miles to pick up a load when there’s one waiting 5 miles away will be better for drivers and help resolve some of the HOS issues we’re dealing with now.
HDT: But you’re doing more than just showing shippers and drivers where each other are, correct?
Kropp: Yes. We are a marketplace specifically for flatbed and heavy haul carriers. Shippers today who need to move something big go to a broker, get a bunch of quotes, and then settle on a carrier. There’s not a whole lot of visibility in that process – just accounting for all the permits that have to obtained to move an oversized load is one example. If they come to us, we can show those permits up front and quote a price based on input from our carrier customers. If they like the price, they can book the load and they’re done. They’ve got a truck. And on the flip side of that transaction, we’ve got a customer base of about 4,500 trucks in our network that are telling us all the time where they are, what their availability is, and what kinds of loads they’re interested in hauling. It makes for a more efficient business environment, and we pay fleets the same day as the load is delivered. There are no factoring or quick-pay charges to deal with. And we can do that because we’re taking advantage of the data that is out there.
HDT: What are your thoughts on the other emerging trucking technologies that are getting most of the headlines today?
Kropp: My view is that autonomous driving technology is coming – although not as fast as most people think. And it won’t have the effects people are predicting. I don’t think robots are going to be taking jobs away from drivers anytime soon – maybe not even within our lifetimes. But autonomous technology will change how drivers do their jobs. Take Peloton and their platooning technology. It is possible that in the not too distant future, the rear driver in a platoon will be able to take an 11 hour rest off duty while the truck is moving down the road. The lead driver will be on duty and still in control of the platoon. It’s essentially a modern take on the old team-driver scenario. I can see cases coming soon where a driver gets a truck loaded, drives through city traffic until they get on the Interstate, then takes a rest period while the truck drives that portion of the run. Then, once it’s time to get off the highway and back into city traffic, the driver goes back on the clock and takes control of the truck again.
HDT: That would end a lot of the ELD issues right there.
Kropp: Yes. And it actually might help with the driver shortage. because there is serious potential with autonomous technology to make drivers’ lives easier and better. But it won’t be a fix-all solution. When you look at heavy-haul and oversized loads, for example, they are so much more complicated and have so much more risk involved that I can’t ever imagine trucks hauling them without a human onboard and in charge. And I think when you look at it that way, good drivers will migrate to jobs that pay more for their skill sets in a world where autonomous technology is common.
HDT: Looking at FR8Star, things are just beginning now. When do you think these data-driven marketplaces will begin to transform our industry?
Kropp: I think business like ours, as well as Convoy, Uber and Transfix, all have incredibly powerful models that will pay carriers more money and faster. My take is they’re really going to take off in the next two to five years and become the preferred way of contracting loads.
HDT: I know you take issue with the common assumption that truckers today either do not like new technology or don’t use it.
Kropp: We just surveyed 300 flatbed haulers on this very subject and found that 95% of them say they are tech savvy today. And we absolutely see that with our customer base. Anyone who says truckers don’t like or understand new technology doesn’t understand who’s in trucking today. They are definitely engaged and interested in ways to do their jobs quicker and easier.
HDT: What was up with your decision to present at SXSW? That’s not a trucking audience.
Kropp: No. But it is a very technology-focused audience. So it was a good forum for us to talk about the fact that trucking is becoming more technology savvy and spread the word on what we’re doing. We had a very good crowd on hand and got a good reception for our message.