China is infamous for its smog-ridden cities, and its massive $750 billion trucking market has plenty to do with that reputation. Its value and importance to Chinese infrastructure make the pollution a necessary sacrifice, but a recent merger between two of China’s largest apps for hauling services similar to Uber may finally change that. Together, the apps make up a $2 billion giant that will smooth inefficiencies in traffic, pollution, and make life simpler for China’s 30 million plus truckers.
As an industry, China’s trucking business is uniquely low-tech and out-of-touch. After the Chinese government disbanded trucking monopolies, millions of individuals and small companies picked up the slack. In 2012, 9 million trucking companies elbowed for room. The hot competition and fragmented market has led to sinking profits and trucks that spend nearly half their time empty, parked in lots that span acres.
The merger of rivals Huochebang and Yunmanman might be the turning point for an industry that’s leaking profits and carbon. The stated goal of the merger is the creation of an “internet of vehicles,” that will aid in decongesting the skies and the roads by better coordinating the country’s millions of trucks.
With the scale and connectivity that these two companies can access together, this chaotic and stumbling industry will have a greater chance at clawing its way into the 21st century, and toward a more profitable future.
