“You can’t disrupt the freight shipping industry from Silicon Valley.

That’s the most important takeaway from Uber Technologies’ decision to move its fast-growing logistics business to Chicago. San Francisco-based Uber on Monday announced plans to fill more than 450,000 square feet of space at the Old Post Office with 2,000 workers.

Sure, it’s a big coup for the real estate developers who transformed the hulking structure astride the Eisenhower Expressway into downtown’s hottest new business address. And it’s another chance for city leaders to tout a high-profile corporate transplant.

But Uber isn’t coming here because it loves art deco architecture, or exchanging platitudes with local pols and plutocrats. It’s coming here because it’s serious about the freight business. Anybody who’s serious about the freight business has to be in Chicago.

Chicago has been the hub of cargo transit in the United States since a bunch of Irish immigrants dug a canal connecting Lake Michigan with the Mississippi River system back in the 1840s. The country’s rail, highway and air transport networks converge here.

That convergence gave rise to an industry that orchestrates the movement of goods among various transportation modes. Now called logistics, that industry generates nearly $200 billion annually in the U.S., according to research firm IBIS World.

No wonder Uber wants in. But Uber won’t achieve its goals in logistics without steady supplies of industry-level expertise. Unlike in Uber’s ride-hailing business, a smartphone app alone won’t turn logistics upside down.

Uber doesn’t even have the kind of technological edge in logistics that it enjoyed over traditional taxi companies. As my colleague John Pletz has written, local logistics firms pioneered the application of digital technologies to the intricacies of choreographing continuous flows of freight around the country. Uber has plenty to learn from companies like Coyote Logistics (now a unit of UPS), Echo Global Logistics, Four Kites and Project44.”  Read More

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