DB Schenker hires uShip to improve freight brokerage

In an effort to capitalize more quickly on the rise of e-commerce, DB Schenker has purchased the exclusive European rights to uShip’s transportation management software (TMS), rather than creating its own system.

The two companies signed a five-year deal that uShip’s chief marketing officer Dick Metzler explained as a way for “uShip to support their brokerage business in terms of managing third-party carriers.” DB Schenker said it plans to use uShip’s freight brokerage platform to connect shippers and trucking companies in Europe.

As e-commerce disrupts traditional supply chains, large logistics firms are increasingly turning to more agile technology firms like uShip to streamline a growing number of smaller, more diverse shipments. Using an eBay-like platform, uShip connects senders with shippers, which eliminates the need for DB Schenker to develop a costly and time-consuming in-house alternative.

The Germany-based logistics firm told the Wall Street Journal that it paid “tens of millions of dollars” for the rights. Other companies, such as Deutsche Post AG, have run into complications developing in-house software solutions, in their case causing a US$383 million write-off. Integrating a market-tested TMS system helps DB Schenker avoid a similar fate.

Since 2004, the uShip marketplace has hosted more than $750 million in sales, measured in gross shipping volume. Five million shipments have been listed and registered for 3.5 million shippers, including around 400,000 self-identified business shippers. As an intermediary, uShip takes a small percentage of each transaction that the company facilitates.