{"id":10393,"date":"2021-03-22T16:53:38","date_gmt":"2021-03-22T15:53:38","guid":{"rendered":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/?p=10393"},"modified":"2021-03-22T16:53:38","modified_gmt":"2021-03-22T15:53:38","slug":"freight-logistics","status":"publish","type":"post","link":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/2021\/03\/22\/freight-logistics\/","title":{"rendered":"The digitization of freight logistics"},"content":{"rendered":"

Acting as intermediaries and the theoretical sales and marketing arm for carriers, today\u2019s brokers and 3PLs have put more focus on building relationships and analyzing data to keep freight moving.<\/span><\/p>\n

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In the earlier days of the industry \u2014 more specifically in 1980 when the Motor Carrier Act deregulated interstate trucking \u2014 freight brokers were essentially contract salespeople for commercial fleets. Today, however, the role of modern brokers has evolved.<\/span><\/p>\n

Brokers now are not only intermediaries and the theoretical sales and marketing arm for carriers, but they also handle the more broad-based carrier management for shippers. And while all brokers are third-party logistics providers (3PLs), not all 3PLs do brokerage.<\/span><\/p>\n

Many of the larger, integrated 3PLs might follow freight shipments and handle procurement all the way from ocean containers to final-mile delivery. They also handle carrier and shipper billing, warehousing, and carrier monitoring and management. Over the last few years, a great deal of emphasis for 3PLs and brokers has been put on building relationships with fleets and shippers. Ken Adamo, chief of analytics for DAT Solutions<\/a>, which operates the largest truckload freight marketplace in North America, explained that 2018 was a year that brought these relationships into focus, as many relationships were put to the test.<\/span><\/p>\n

\u201cA lot of the talk you hear now about broker transparency was the other way around [in the earlier days],\u201d Adamo said. \u201cIt was essentially to make sure the brokers were getting paid the right amount because they didn\u2019t necessarily see the whole transaction.\u201d<\/span><\/p>\n

Mark Ford, chief operating officer of transportation for BlueGrace Logistics<\/a>, one of the largest 3PLs in the U.S., has seen a lot evolve in the last 25 years he\u2019s been in the industry. <\/b><\/span><\/p>\n

\u201cHistorically, if you look at how companies operate in our space, it has been more or less call driven, manpower driven, and a lot of human effort involved in the sales process in general,\u201d Ford explained. \u201cThat\u2019s because it\u2019s a highly fragmented industry, and you have to have a lot of touchpoints to actually facilitate the transactions.\u201d<\/span><\/p>\n

Data utilization<\/span><\/h3>\n

Ford explained that the industry has been moving in a more \u201cseamless and frictionless\u201d operational direction, with 3PLs and brokers alike spending more time collecting and analyzing data.<\/span><\/p>\n

\u201cTraditionally speaking, most brokers focused and relied on load boards and the transaction in general,\u201d Ford said. \u201cWhat technology allows us to do these days more so than in the past is to collect data and utilize that data, so we\u2019re spending less time trying to figure out who to call and more time on building relationships and getting carriers to give us access to that data.\u201d<\/span><\/p>\n

In 2013, Chris Arredondo worked at Cargo Chief while the company was a technology-enabled brokerage firm. About a year ago, Cargo Chief discontinued its freight brokering services to license its technology, which includes leveraging key data integrations, machine learning, artificial intelligence, and advanced automation, for 3PLs.<\/span><\/p>\n

Arredondo, who is now co-founder and director of customer success for Cargo Chief<\/a>, explained that back in 2014 when technology integrations really began ramping up, trucking wasn\u2019t quite ready for it. But that has begun to change. \u00a0<\/span><\/p>\n

\u201cI think even today when you think about a shipper and carrier, the industry still favors a phone call or a conversation over anything,\u201d he said. \u201cIt took a big event like COVID to get carriers and companies to digitize and focus on where to deploy and execute solutions.\u201d<\/span><\/p>\n

Cargo Chief now offers a platform called C4, which gives carriers the ability to see real-time lane pricing, prioritized load opportunities, capacity management, and customer relationship management (CRM) capabilities. Today, Cargo Chief allows brokers to not just pair with carriers, but the platform gives carriers the ability to determine the lanes they want to run and at what price.<\/span><\/p>\n

\u201cCarriers like to work with consistencies and find those shippers or 3PLs that not only have that freight, but who could also think outside of the box and be flexible and creative,\u201d Arredondo explained. \u201cCarriers want the business for their trucks in the lanes that fit their business, and they want to run freight every time \u2014 not just today \u2014 with that same company. In turn, the same benefits for a broker or 3PL are very much the same for carriers.\u201d<\/span><\/p>\n

Digitization and transparency<\/span><\/h3>\n

In an industry that\u2019s been largely reliant on what Sagar Shah, Uber Freight’s <\/a>director of carrier operations, calls \u201cinefficient processes like paper, phone calls, and fax machines,\u201d today\u2019s technology can provide a more seamless experience for both fleets and drivers. Uber Freight, for instance, offers interfaces that feature upfront pricing, instant booking, payment, and facility ratings that help shippers reduce driver detention time.<\/span><\/p>\n

\u201cFor fleets in particular, carriers will want to look for tech platforms that can manage and dispatch fleets easily, allowing them to operate and plan for several trucks at once, so they can streamline operations and maximize productivity,\u201d Shah said. \u201cIn working with a 3PL, fleets can expect incremental value \u2013 whether through load selection or operational ease.\u201d<\/span><\/p>\n

Over the last few years, the market has seen a tremendous shift toward eliminating friction among partners. Digitization has helped firms inject transparency into the market, as more companies are adopting tools to help them respond and react to market changes faster, DAT\u2019s Adamo explained.<\/span><\/p>\n

DAT offers tools that show shippers, carriers, and brokers five-day forecasts for inbound and outbound market activity. These tools allow fleets to plan out a theoretical week for themselves, so they are not as dependent on the next one-off shipment.<\/span><\/p>\n

\u201cThe evolution is really just being creative and flexible in how you can get that true capacity with that spot market transactional rate and simulate it to more of an actual rate,\u201d Cargo Chief\u2019s Arredondo pointed out. \u201cThe more data, tools, and network solutions that we can give our customers, the better it is for their carriers.\u201d<\/span><\/p>\n

Arredondo also emphasized the importance of turning those one-off shipments into more long-standing carrier-broker relationships.<\/span><\/p>\n

With its C4 end-user tool, Cargo Chief offers the data it has collected to small and mid-sized brokers, so they too can develop relationships with carriers in a more real-time way. When Cargo Chief first launched C4 in 2018, Arredondo explained that only the bigger brokerage firms and larger fleets had those types of freight-booking apps. Now, it has become a requirement for everyone working in the space.<\/span><\/p>\n

\"CargoCargo Chief’s C4 platform gives carriers real-time lane pricing, prioritized load opportunities, and capacity management capabilities.<\/span>Photo: Cargo Chief<\/span><\/span><\/p>\n

\u201cYou want to be the expert in whatever you\u2019re doing,\u201d Arredondo said. \u201cFrom a broker standpoint, a carrier can sense that confidence in what you have and what you\u2019re trying to sell them. At the end, it\u2019s that carrier\u2019s liability; it\u2019s their trailer. Do they really want to load your freight? You have to think about being the expert in your lane and finding your niche\u2014whether it\u2019s flatbed, van, refrigerated, whatever it may be.\u201d<\/span><\/p>\n

In the 40 years the trucking industry has been deregulated, Adamo explained that the industry has overbought capacity and suffered the consequences in a repeatable and predictable cycle.<\/span><\/p>\n

\u201cFrom where I sit, we have the tools now to help mitigate that volatility by making better decisions in all aspects of our business,\u201d Adamo said.<\/span><\/p>\n

For instance, fleets have been able to better oversee their assets with telematics and other visibility tools, which, in turn, help all parties in the freight transaction process manage their operations more efficiently. Technology and data can also help mitigate some of the areas of friction that exist\u2014think driver detention time.<\/span><\/p>\n

The data is there, whether companies decide to use it or not, Adamo explained. But those who don\u2019t leverage it are at risk of being left behind. \u00a0<\/span><\/p>\n

According to BlueGrace\u2019s Ford, the \u201cold way\u201d of doing business consisted of posting loads on load boards, with few companies adapting to or investing in technology. On the truckload side of the business, BlueGrace has made a continued effort building its own CRM system by taking years\u2019 worth of data and using it from a predictive analytics standpoint.<\/span><\/p>\n

\u201cIt\u2019s useful in connecting our carriers to our internal loads,\u201d Ford said. \u201cIt\u2019s also useful for our sales reps to go out and start targeting some of the freight that our carriers have pinpointed as painful areas. We are looking at how we can help our carriers in the network and fill the gaps in back hauls and things like that.\u201d<\/span><\/p>\n

Data also helps 3PLs pattern out where fleets are consistently available.<\/span><\/p>\n

\u201cWhen we get a load, even if it\u2019s three or four days in advance, our system is telling us, \u2018Hey, these 25 carriers are most likely going to have capacity for that lane,\u2019 and it prioritizes those carrier relationships that we\u2019ve built,\u201d Ford added.<\/span><\/p>\n

Silvicom Inc., a truckload carrier operating in all 48 contiguous states, has been working with BlueGrace every day for the past two years.\u00a0 At the end of the day, Silvicom\u2019s main objective is to do business with trusted 3PLs.<\/span><\/p>\n

Miro Balabanov, a dispatcher for Silvicom, said that by keeping the carrier informed of incoming shipments, BlueGrace has been able to help the fleet position its units in areas that will generate the best loads. \u201cEvery morning we send them a list of our available units because we always try to provide availability to put BlueGrace loads on our trucks,\u201d Balabanov said.<\/span><\/p>\n

Another key element of carrier satisfaction is how 3PLs and brokers handle interactions for commercial drivers. The point is to make an already difficult job as smooth as possible for the driver, Ford explained. That means not making the driver jump through hoops, wait for prolonged periods of time to pick up or drop off a load, or to continuously call the driver from the time he or she picks up the load until the time it\u2019s delivered.<\/span><\/p>\n

\u201cOne of the questions that our reps will ask is, \u2018Where do your drivers need to be next?\u2019\u201d explained Mark Derks, chief marketing officer for BlueGrace. \u201cSo, the reps will have forward-leading driver questions about whether a driver needs to get home, where they live, and how we can help get them there.\u201d<\/span><\/p>\n

\"BlueGraceBlueGrace Logistics reps use data to pattern out where fleets are consistently available.<\/span>Photo: BlueGrace Logistics<\/span><\/span><\/p>\n

Uber Freight\u2019s Shah also emphasized the importance of fleets and shippers taking advantage of the most up-to-date, transparent pricing.<\/span><\/p>\n

\u201cUber Freight\u2019s pricing algorithms can quickly understand leading market indicators, including feedback from carriers about how they\u2019re engaging with their networks and what kinds of loads they\u2019re interested in and accepting,\u201d Shah said. \u201cWe can identify more nuanced load interactions, and scale that feedback. This ultimately leads to more objective and accurate insight into load trends and market equilibrium.\u201d<\/span><\/p>\n

How COVID changed logistics<\/span><\/h3>\n

Throughout the industry, there has been a much greater movement to minimize touchpoints for drivers and digitize efforts to keep frontline workers safe.<\/span><\/p>\n

Arredondo explained that over the course of the pandemic, Cargo Chief has also noticed that more companies are trying to pivot from the one-and-done spot market and better prepare for the next major shakeup that comes along.<\/span><\/span><\/p>\n

\u201cIt\u2019s harder to predict what\u2019s going to happen in three months,\u201d he said. \u201cPeople are a lot more aware of those sudden impacts that could happen, and they are trying to be more in tune with those incremental changes or even the big swings.\u201d <\/span><\/p>\n

Those incremental changes and big market swings have also made carrier-broker-shipper relationships and transparency in pricing structure that much more important.<\/span><\/p>\n

In addition, Arredondo has also noticed more of an industry-wide sense of urgency lately. For instance, Cargo Chief has seen an uptick in team drivers, where many brokerages are having more opportunities to move expedited freight than they were before. <\/span><\/span><\/p>\n

\u201cA year-and-a-half ago it wasn\u2019t as big of a part of their business. But now when you think about the driver time spent at a port when they are rejecting containers and are<\/span> so backlogged and drivers are having to wait to get screened for COVID, that adds up to the last free day of that container at a port,\u201d Arredondo said. \u201cThen, suddenly, that freight has to get somewhere before it spoils or doesn\u2019t hit the store it needs to in time. The equipment types and driver capabilities as far as team driving goes have shifted during COVID.\u201d <\/span><\/span><\/p>\n

DAT\u2019s Adamo explained that COVID has changed the business significantly when it comes to advancements in digitization and customer touchpoints\u2014whether it\u2019s an electronic bill of lading, electronic tendering, status updating, or proof of delivery. DAT is also seeing increased trailer pools to help with drop and hook opposed to live load and unload.<\/span><\/p>\n

There has also been increased adoption of modern transportation management software from both carrier and broker-carrier management perspectives.<\/span><\/p>\n

\u201cEfficiency has become much more important, and as you are seeing increased detention and fewer dock workers, loading and unloading times may be longer,\u201d Adamo said, adding that carriers are thinking more about rate-per-hour pay for drivers compared to rate-per-mile.<\/span><\/p>\n

Adamo also noted that 2020 was the year of relationship-building across the industry\u2014starting with the restocking boom last March and drivers protesting in front of the White House last May because they couldn\u2019t afford to run empty. The industry also saw rates end at all-time deregulated highs in 2020.<\/span><\/p>\n

\u201cIf that doesn\u2019t force you into changing how you build relationships with your shippers and brokers and all the relationships you have, I\u2019m not really sure what will,\u201d Adamo stressed. \u201cWe\u2019ve seen a lot of positive success stories about those relationships. In 2018, a lot of brokers compromised service at the benefit of price, and that burned a lot of relationships. In 2020, we saw much more weight toward protecting service than we did in 2018, which was a big positive for our industry.\u201d<\/span><\/p>\n

BlueGrace\u2019s Derk also pointed out that COVID prompted a heightened level of focus on safety, the driver, and on trucking companies in general. He added that because capacity was so tight, 3PLs and freight providers had to be intentional in their strategy to keep frontline workers safe.<\/span><\/p>\n

In 2020, there was a major acceleration in the adoption of technology and automation across industries. Shah pointed out that this was particularly true in logistics, as supply chains were squeezed by panic-buying and markets became unbalanced, with both high and low freight volumes.<\/span><\/p>\n

\u201cThe industry needed to be flexible and resilient \u2013 and for both shippers and carriers, that meant investing in new technology that helps the supply chain adjust quickly and offer stability during times of volatility,\u201d Shah said.<\/span><\/p>\n

Moving forward, momentum toward advancements in freight technology is likely to increase, with even more emphasis being put on building relationships throughout the entire freight transaction process.\u00a0<\/span><\/p>\n<\/div>\n

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By Cristina Commendatore<\/a><\/span><\/p>\n

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Source: https:\/\/www.fleetowner.com<\/a><\/span><\/p>\n<\/div>\n

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Acting as intermediaries and the theoretical sales and marketing arm for carriers, today\u2019s brokers and 3PLs have put more focus on building relationships and analyzing data to keep freight moving. In the earlier days of the industry \u2014 more specifically in 1980 when the Motor Carrier Act deregulated interstate trucking \u2014 freight brokers were essentially…<\/p>\n","protected":false},"author":3,"featured_media":10394,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[18],"tags":[409],"_links":{"self":[{"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/posts\/10393"}],"collection":[{"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/comments?post=10393"}],"version-history":[{"count":1,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/posts\/10393\/revisions"}],"predecessor-version":[{"id":10395,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/posts\/10393\/revisions\/10395"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/media\/10394"}],"wp:attachment":[{"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/media?parent=10393"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/categories?post=10393"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/wp-json\/wp\/v2\/tags?post=10393"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}