Volatile Markets & Digital Transformation Redraw the Landscape for Brokers & Carriers

Prasad Gollapalli | TRUCKER TOOLS

LOOKING BACK ON 2020, it’s remarkable to consider what the freight transportation industry went through and how it survived. A global pandemic, the likes of which had not been seen in more than 100 years, whiplashed carriers, brokers, and shippers alike. The rise of COVID-19 last spring and shelter-in-place orders sent freight volumes into a tailspin. Businesses shut their doors, cratering business-to-business freight. Imports declined precipitously. Many truckers said they’d finally had enough, selling trucks and getting out of the market completely. Others parked their trucks against the fence and found other jobs.

Then consumers, stuck at home and still needing essential goods and supplies, began ordering all manner of goods online. E-commerce volumes went through the roof. In the space of several months, e-commerce traffic surged to levels that most analysts had predicted would take several years to achieve. And the supply chains supporting them strained mightily under the pressure.

That initial pandemic-driven surge was the first chapter in a historic year for the freight community, as the economy whiplashed from near-depression levels to an unprecedented flood of shipping. The typical spring-summer peak season was supercharged by pandemic-related consumer buying. At the same time, massive amounts of orders for personal protective equipment and related health care supplies flooded into transportation networks. Supply chain managers, wary of a second COVID-19 wave disrupting the economy, went on a massive inventory rebuilding campaign, shifting from minimalist “just-in-time” inventory strategies to “just-in-case” restocking at levels that pushed warehouse capacity—and trucking resources—to the brink. Then we saw the traditional holiday shipping surge join the mix.

An Inflection Point

All these market forces were coalescing at a time when the pace of technology in the logistics and freight brokerage industry was accelerating. Money poured into start-ups as well as exiting technology players, reshaping brokerage models into digital platforms intent on disintermediating traditional brokers. A survey by Forbes Insights found that 62% of logistics, transportation, and supply chain executives in 2020 started reconstructing their business operations to employ a wider array of digital tools and processes, across a host of transportation procurement, execution, and carrier relationship management functions.

The objective: build a more robust and efficient digital freight technology platform to make faster, better decisions, remove waste and lower costs, improve data quality and latency, and provide more resiliency to—and protection against—market shocks.

The biggest lesson that freight brokers and 3PLs came away with in 2020: settling on a technology transformation strategy—and executing the strategy with urgency by embracing agile, rapidly deployable, mobile-friendly, and highly functional digital freight tools and platforms. Slow-walking or deferring a decision until technology fully “matures” only delays the benefits and ultimately leads to failure. Waiting or resisting needed change will only put you further behind the competition and risk not only your margins but your survival as a business. And technology transformation is not a one-and-done proposition. It’s a strategic, continuous improvement element of your business plan that evolves and is adjusted over time.

Defining Priorities, Securing “Quick Wins”

What has made this moment in time different from previous eras of technology adoption? The number of new players and the pace of development they are driving. We are in a unique period where new solutions, or improvements to existing solutions, are being introduced almost weekly. On top of that is the current pandemic, which analysts say has accelerated the normal development and adoption cycles by seven to 10 years.

Dealing with—and driving advantage from—this accelerated pace and scope of change will remain among the top challenges and priorities freight brokers face in 2021. It’s imperative for brokers to put resources to this task, clearly define and rank what your particular brokerage’s needs and pain points are, identify and vet potential technology partners, understand implementation processes and employee training, and then execute in a timely manner your well-thought-out plan to address those needs.

In a recent survey we did at the end of last year among brokers and logistics providers, 81% of respondents reported that they planned to grow their business by more fully adopting two key enabling technologies: predictive, digital load matching and real-time, digital load tracking.

Why Are These Priorities?

A couple of reasons.

Especially in a capacity-constrained market, brokers must look at every area of expense to maintain margins. The costs incurred to match a load to a truck is one area that can gain immediate benefit from technology. Digital freight matching can reduce the time it takes a broker to cover a load, conservatively, by more than half. The benefits come from real-time, accurate visibility to available capacity, and using software to match that capacity to the ideal load in your system. No more searching load boards and copy/pasting information into a spreadsheet, the information from which is stale almost from the moment it’s entered.

Predictive, digital freight matching automates wasteful manual tasks and frees up time for the broker to cover more loads in the same shift, as well as spending more time on other higher-value tasks.

And for the trucker, similar benefits accrue. Predictive, digital freight matching presents a constantly updated list of available loads on the trucker’s phone, with those matching the trucker’s priorities and preferences on top. It lists real-time available loads from all the preferred brokers that trucker likes to work with. So, for the trucker, time spent searching for the right load at the right time is dramatically reduced. The driver can plan not just for the next load, but the next two or three. Unproductive or unnecessary downtime is reduced, and that trucker is then able to maximize revenue per truck per month in the most optimal manner.

Another quick win is digital load tracking.

In the past, the conventional practice was one where brokers were constantly making check-calls to truckers asking: “Where’s my load?” Once the information was obtained, the broker would manually enter it into their TMS or a spreadsheet.

With today’s mobile-based, GPSenabled smartphone apps, tracking is not only automated, but also far timelier, with “pings” as frequent as every 15 minutes, automatically feeding updates into the broker’s operating system. That eliminates manual entry, provides a far more accurate and time-certain update during a load’s enroute progress, and confirms a time-stamped delivery at destination.

Benefits Gained by Both Trucker & Broker

Again, similar benefits are enjoyed by both broker and trucker. The broker is relieved of the manual tasks and time of calling and updating tracking information, while the trucker no longer needs to field annoying calls from the broker, or spend time manually input tracking data.

Another significant benefit from automated, smartphone-based digital load tracking is compliance and carrier engagement. On average, Trucker Tools customers who adopt digital load tracking start with a compliance rate—the percentage of carriers who regularly provide updated and accurate tracking data—of less than 30%. Within 30-days of adopting Trucker Tools load tracking, as carriers are incentivized to enable the functionality of the Trucker Tools tracking app on their smartphone, that compliance rate increases to more than 90%.

The data not only is acquired far more efficiently, but the quality, latency, consistency, and integrity of the data is far superior—providing a real-time advantage for shippers. That adoption rate is supported by the market-wide implementation of the Trucker Tools mobile driver app.

Introduced in 2013, the app has been downloaded by more than 1 million truckers, is actively utilized by some 140,000 small carriers (10 trucks or less), and today continues to be one of the most downloaded driver apps in the transportation industry.


Technology as the Key to Resiliency, Flexibility & Efficiency

If 2020 has taught the transportation industry anything, it’s that the old ways of doing business manually cannot match the resiliency and competitive opportunity that today’s digital freight platforms can offer. Brokers and 3PLs who started their digital transformation prior to the pandemic were able to withstand and successfully manage the rate, supply, and demand fluctuations throughout the year.

Going into 2021, those digital tools will be even more important as shippers continue to demand more responsive service and better decision-support tools that get freight where it needs to be at the lowest landed cost. Digital tools that automate processes, such as predictive freight matching, automate booking and realtime load tracking and will support a level of service, support, and adaptability that is key to broker—and carrier—success in a continually evolving market.

The author, Prasad Gollapalli, is the founder and chief executive officer of Trucker Tools. Based in Reston, Virginia, Trucker Tools, is a leading provider of trip planning, shipment visibility, predictive freight matching, and automated booking solutions for the transportation industry. To learn more about Prasad or Trucker Tools, please visit www.truckertools.com.