{"id":3107,"date":"2019-07-19T17:06:56","date_gmt":"2019-07-19T15:06:56","guid":{"rendered":"http:\/\/en.advancedfleetmanagementconsulting.com\/?p=3107"},"modified":"2019-07-19T17:06:56","modified_gmt":"2019-07-19T15:06:56","slug":"3107","status":"publish","type":"post","link":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/2019\/07\/19\/3107\/","title":{"rendered":"Technology is Changing How Carriers, Shippers, and Brokers Connect"},"content":{"rendered":"

\"J.B.<\/p>\n

J.B. Hunt Transport Services\u2019 digital freight-matching platform, Carrier 360, also features a recently announced trailer pool and drop-and-hook service called 360Box. Photo: J.B. Hunt<\/p>\n

Technology is Changing How Carriers, Shippers, and Brokers Connect<\/h2>\n

Disruption. Transparency. Visibility. Efficiency. Trust. Collaboration. Algorithms. Artificial Intelligence. This is the vocabulary of the rapidly changing world of technology and logistics.<\/p>\n

Some envision technology in the freight market doing what Uber and Lyft have done in the ride-sharing market or Airbnb in the vacation market. But automating logistics is much more complex.<\/p>\n

There are indeed a fast-growing number of automated load-matching technologies. But other technology solutions take a wide range of approaches to better connect carriers, shippers, and freight brokers, to make logistics and supply chains run more efficiently, and to drive more profits for users. There\u2019s everything from digital brokers and electronic load boards to sophisticated systems that manage the entire process from load tender to payment. Some focus on the immediate transaction of the spot market. Others aim to foster greater collaboration.<\/p>\n

\u201cThe power of software and technology, combined with relationships, has the potential to make the whole freight and logistics value chain much more efficient and effective,\u201d says Jeff Hopper, chief marketing officer for DAT Services, which got its start replacing truckstop load boards of handwritten note cards pinned to a bulletin board with electronic displays.<\/p>\n

\"This<\/p>\n

This carrier sourcing screen from EKA\u2019s Omni-TMS is one example of how technology is changing the way brokers, carriers, and shippers interact. Image: EKA<\/p>\n

Freight-matching in the spot market<\/h3>\n

Only about 30% of the freight moved by truck is transacted on the spot market, according to FTR. Shippers and carriers alike want the stability of long-term contracts for certain lanes. But there\u2019s still plenty of transactional freight, and a lot of inefficiencies to be addressed, as spreadsheets, notebooks, telephones and laminated maps are still the tools of choice for many small brokers and carriers.<\/p>\n

\u201cCommercial freight is still fraught with archaic, antiquated means of how you connect a load with a transporter,\u201d says Mike Williams, CEO of uShip, which started 15 years ago as a sort of eBay for people wanting to find a bit of extra capacity for small shipments such as items of furniture. The company has expanded into other areas, including a less-than-truckload platform and a partnership with global logistics giant DB Schenker.<\/p>\n

\u201cI think the biggest change has been the ability to move to a digital relationship from an email and phone relationship \u2013 that\u2019s where everybody\u2019s trying to get to,\u201d says Robert Brothers, manager of product development for McLeod Software.<\/p>\n

While Silicon Valley startups aiming to drag the industry into the 21st century have gotten a lot of attention, there are many established brokers and third-party logistics companies using technology to better serve shipper customers and carriers in their network.<\/p>\n

For instance, one of the world\u2019s largest 3PLs, C.H. Robinson, offers its contract carriers electronic tools called Navisphere, with features such as SmartMatch, which intuitively finds loads for you, and billing status, which lets you quickly see payments issued on loads.<\/p>\n

XPO Logistics says 22,000 carriers have signed up with its mobile app, Drive XPO, since its launch last year. More than 50% of the\u00a0company\u2019s loads are now offered to its carriers electronically, customized for\u00a0their preferences.<\/p>\n

Some companies have turned to digital brokerage opportunities after seeing first-hand industry needs.<\/p>\n

Lidia Yan founded Next Trucking, a digital broker focused on drayage at Southern California ports. Traditional brokers, she says, \u201chave their more preferred carriers they work with. The digital brokers can bring transparency. We allow shippers to connect directly without a lot of human intervention. It gives more to the carriers, because they will be paid a fair market price. And the shippers can trace and track.\u201d<\/p>\n

Digital broker Transfix was started five years ago by founders with experience in the trucking and brokerage business. \u201cLike any other broker, our job is to help get shippers and carriers connected,\u201d explains Drew McElroy, co-founder and CEO. But it tries to streamline that as much as possible via technology.<\/p>\n

\u201cThe vast majority of people moving freight are still old-school brokers,\u201d he says, matching loads one by one. \u201cIn any given market on any day, we know how many drivers are looking for loads and how many loads we have. Our system looks at best solutions for minimizing empty mileage and wait time for these 30 loads and 30 drivers.\u201d Transfix uses algorithms to match freight and trucks that allow its carriers to get more loaded miles on a weekly basis. \u201cOur goal is to have choices the minute you deliver \u2013 or even before you deliver \u2013 your headhaul.\u201d<\/p>\n

The magic of matching<\/h3>\n

Using technology to help match available loads with available trucks on the spot market is not a new concept. Truckstop.com, for instance, started using the internet in the \u201990s (then known as Internet Truckstop) to create a virtual load board, and it has continued to invest in technology to help match trucks and loads.<\/p>\n

\u201cWe\u2019re not trying to eliminate the relationship between carriers and brokers,\u201d says Truckstop.com CEO Paris Cole. By giving visibility to both sides into factors such as pricing, the company believes it can eliminate a lot of waste in those calls.<\/p>\n

Transplace was founded in 2010 as an internet-based transportation logistics company. \u201cFinding the next load for a truck before it\u2019s been dispatched on the first leg or while it\u2019s on the first leg is harder than it seems,\u201d says Jeff Thomas, senior vice president of capacity services. \u201cThrough artificial intelligence, we\u2019ve been able to identify opportunities that have a strong possibility of success, and that is translating to fewer empty miles and more multi-leg dispatches. Quite frankly, it\u2019s good for us, for the carrier and for the shipper, and it\u2019s keeping trucks in our network.\u201d<\/p>\n

There are a number of companies that aim to take even more inefficiencies out of the process, even entirely automating load-matching.<\/p>\n

Convoy, for instance, in February announced that it had achieved 100% matching in key markets. \u201cWhat automated matching means is no humans are involved in helping the carrier find the job,\u201d explains Nikhil Jaipuria, director of product, carriers. \u201cWhat we\u2019ve seen is matching a carrier with a particular load is one of the more time-consuming and expensive tasks. In the traditional brokerage model it takes about 100 phone calls, and carriers say they spend 50 to 75% of their time looking for loads. Through the Convoy app, what we\u2019ve done is largely eliminated the call-intensive brokerage model and are allowing carriers to get matched with loads automatically.\u201d However, Convoy also relies on humans to augment the technology when brokering specialized loads or when it has specific demands from shippers.<\/p>\n

\"Technology
Technology can be used not only for instant freight-matching and pricing, but also for addressing longer-term needs, such as with Lanehub\u2019s software, which helps shippers find freight for empty legs in their private or dedicated fleets. hoto: Lanehub<\/figcaption><\/figure>\n

Beyond the spot market<\/h3>\n

Matching up freight with available capacity outside of the usual bid-and-contract process is not limited to the spot market.<\/p>\n

Lanehub, for instance, says its technology lets shippers and carriers work together to improve utilization on lanes on a longer-term basis. Shippers load their lane networks into the company\u2019s software. \u201cIt will show them which other members line up well with their network, and they can mutually agree to share those cases where they do have fits between them,\u201d explains Chandler Hall, COO and executive vice president. Say one shipper has freight going from point A to point B, while another has freight going from B to A. Lanehub\u2019s software will show them those matches and help the two connect to set up a deal. Many shippers use it to find freight on empty legs in their private or dedicated fleets. They also can work with their carriers to help reduce empty miles or get more consistent freight.<\/p>\n

EKA Solutions, which is rolling out a cloud-based, end-to-end Omni-TMS for shippers, carriers, and brokers, developed a marketplace module, EKA MPlace. It lets shipper and brokers trade with precision in the more dynamic carrier capacity price environment, says J.J. Singh, EKA founder, chairman and CEO.<\/p>\n

A shipper may have a new customer or a new lane not covered by its existing long-term carrier contracts and route guide, explains EKA President Mark Walker. \u201cThey don\u2019t just want to shop it out to just anybody\u201d in the spot market, he says. \u201cShippers can put that shipment [in mPlace] so their trusted carriers and brokers can see the load and make a longer-term deal.\u201d<\/p>\n

Supply chain visibility<\/h3>\n

Visibility is key in this new world. This includes the ability to know where trucks are at all times \u2013 something that has been made easier with the electronic logging device mandate and rapid advances in vehicle telematics \u2013 as well as visibility into pricing, detention, and other areas.<\/p>\n

Part of what\u2019s driving this demand for visibility in the supply chain is what\u2019s called the Amazon effect. E-commerce customers expect to know when their shipment is<\/p>\n

going to arrive and where it is in the system. While that can happen with big parcel carriers such as UPS and FedEx, small carriers that can\u2019t provide that kind of visibility may be left out of the market.<\/p>\n

\u201cIf Amazon ships it on a small carrier, we\u2019re not going to know where that order is,\u201d explains EKA\u2019s Walker. EKA says its cloud-based Omni-TMS platform is affordable for small- to medium-size carriers, as well as smaller shippers and brokers.<\/p>\n

\u00a0\u201cWith capacity as tight as it\u2019s been, it\u2019s been very difficult for shippers to get their freight moved and have visibility into those freight movements,\u201d says Bryan Coyne, general manager of visibility for Trimble Transportation. Visibility companies such as 10-4 (now part of Trimble Visibility) or FourKites do a good job of helping shippers see where their loads are, he says, whether they are being hauled by a contract carrier or through a brokerage relationship.<\/p>\n

\u201cOne of the huge things technology is bringing to the table when we look at the supply chain is having the ability to see, across multiple different carriers, the freight movements that are out there, so [shippers] can more accurately plan their activity,\u201d Coyne says. \u201cWhether it\u2019s inbound supplies for factories or the outbound distribution, they can direct their resources in the right area.\u201d<\/p>\n

While Trimble Visibility\u2019s customers are shippers, carriers that have contracts with those shippers are also entered into the system, giving those carriers the ability to provide the kind of visibility that \u201cmay be table stakes to the shipper,\u201d he says.<\/p>\n

Automating rates<\/h3>\n

One of the key areas of visibility made possible by newer technology in pricing and payments.<\/p>\n

For instance, McLeod offers its customers digital freight-matching tools within its TMS. The difference today, Brothers says, is in pricing visibility that allows carriers to make a decision on a price immediately.<\/p>\n

\u201cIn the past when you got a tender, you had a contracted price you agreed on through some bid process, or you picked up the phone and negotiated a price. The pricing is now part of the communication mechanism. Brokers and shippers are able to do that because the pricing data available in the market is so much better and so much more reliable,\u201d Brothers explains.<\/p>\n

In the past, it was hard to know the true price of a load, says Convoy\u2019s Jaipuria. \u201cOne of the things that helps carriers earn more is automated bidding.\u201d Through Convoy\u2019s app, carriers can specify the lanes they want to run, when they\u2019ll be empty, and what rate works for their business. For every load that comes into the Convoy network, the app automatically compares it with their preferences. If it works, the load is offered in the app and all the carrier has to do is accept. \u201cNo negotiating, no back and forth, no calling brokers to check for new loads. One tap and you\u2019re done.\u201d<\/p>\n

Another example is Loadsmart. It integrates with the shipper\u2019s transportation management system via API to access shipment data, and runs each shipment through a machine learning pricing algorithm to return a live, bookable rate directly to the shipper\u2019s TMS. This allows the shipper to compare the prices from other carriers and brokers, which are logged in their static rate tree, with Loadsmart\u2019s bookable rate. Instead of the shipper\u2019s load planner manually comparing Loadsmart\u2019s pre-spot dynamic prices with static rates from their routing guide, this is done automatically on a server. Because it is given real-time, the rate is always live and can be booked with one click.<\/p>\n

Technology providers say pricing automation has the potential to deliver lower costs for shippers, but at the same time higher rates for carriers, because the broker doesn\u2019t take as big of a bite.<\/p>\n

\u201cBrokers were not always thought of as good business partners,\u201d says Kate Kaufman, director of account ops for Uber Freight. \u201cYou were just expecting to be taken advantage of.\u201d She says shippers have been surprised by the low rates, but like Uber Rides, Uber Freight pricing is based on proven algorithms and on what\u2019s happening right now in the marketplace.<\/p>\n

\u201cCarriers are equally surprised,\u201d she says.\u00a0 \u201cBecause we\u2019re not engaging in that hidden margin, where who knows if [the broker] took 10% or 50%, our prices are fair [and] we put them out there for everyone to see. And that has changed the game.\u201d<\/p>\n

\"Load-matching
Load-matching technology has come a long way since DAT Solutions got its start with Dial-A-Truck load boards in truckstops. Photo: DAT Solutions<\/figcaption><\/figure>\n

Building trust and collaboration<\/h3>\n

While some freight may be able to be matched entirely without human interaction, few believe this technology will bring about the end of brokers and 3PLs.<\/p>\n

\u201cThere is plenty of room to automate some of the transactions in the marketplace, and to make them fully digital where price is the only element,\u201d says EKA\u2019s Walker. But it doesn\u2019t work for all types of freight. He cites produce, for instance. \u201cFew people can transport produce because it has so many unusual characteristics and special handling issues around it. You can probably think of other non CPG [consumer packaged goods] type freight that\u2019s not just drop a trailer and move it from point A to point B and I\u2019m done.\u201d Oversize loads, for instance, and high-security loads such as pharmaceuticals or defense.<\/p>\n

\u201cThere is only a certain type of freight that is applicable to total digitization,\u201d Singh adds. \u201cThe market is so big that even if it\u2019s only 10 to 15%, you create a lot of bling. They are not going to be able to take over the world.\u201d<\/p>\n

In fact, technology can improve collaboration and relationships between shippers, carriers, and brokers, by building trust.<\/p>\n

\u201cTransparency and trust has always been an issue in the industry, and by using technology in our approach to trucking, we want to make sure carriers have control to make the best decisions,\u201d says Convoy\u2019s Jaipuria. \u201cBut across the board we\u2019re driving more efficiency and transparency, which I think will engender more trust. The shipper gets a higher quality of service, and carriers get high-quality loads and have piece of mind they will get paid as promised.\u201d<\/p>\n

DAT\u2019s Hopper contends trust is becoming even more important. \u201cI think like in anything in the business world, smart people who are serious about solving business problems realize that trust is important. Brokers are realizing this, too, and they\u2019re going to treat carriers well and find good loads for them. As a neutral platform, we feel we\u2019re helping them facilitate that.\u201d<\/p>\n

Part of that involves crowd-sourced data that helps carriers and shippers decide who they want to \u2013 and don\u2019t want to \u2013 work with.<\/p>\n

Transfix, for example, gives shippers and carriers the ability to rate each other. \u201cIf you\u2019re not behaving well, in our network we capture that and there starts to be real implications,\u201d McElroy says. Drivers who don\u2019t make appointments get matched with loads less frequently. Shippers who continually detain carriers? \u201cThose sort of things get reflected in your price. We\u2019re making the consequences of bad behavior start to be felt by folks.\u201d<\/p>\n

Since Uber Freight added shipper facility ratings to its load-matching app, in much the same way it added user ratings to its rideshare platform, \u201cwe see a lot more emphasis on the shipper side into the collaboration they can have with the carrier,\u201d says Xinfeng Le, Uber Freight\u2019s carrier product lead. \u201cThe shipper wants to become the shipper of choice for carriers so they can attract high-quality carriers to haul loads for them and lower their costs in terms of carrying trucking capacity.\u201d<\/p>\n

KeepTruckin, a company that started out as an electronic log provider and since has moved into fleet management solutions and load-matching, also has added shipper facility insights to its platform. \u201cWe\u2019ll be able to deliver to carriers what the driver experience is at those facilities and leverage the power of the network to deliver those insights,\u201d says CEO Shoiab Makani. \u201cWe think it\u2019s going to be really valuable for our carriers to understand the shippers they serve and make better planning decisions.\u201d<\/p>\n

One company believes blockchain-driven smart contracts will enable a system of \u201ctrust but verify.\u201d<\/p>\n

DexFreight is in final beta-testing of a decentralized, blockchain-based logistics platform that uses smart contracts used by shippers, carriers and \u201cother supply chain stakeholders,\u201d such as brokers.<\/p>\n

\u201cEveryone talks about taking out the middleman, about the broker disappearing, but we have a different vision,\u201d says dexFreight co-founder Hector Hernandez. \u201cBlockchain is not about tracking or pricing. It\u2019s about collaboration, a new business model. I think there\u2019s going to be an evolution of the role of the 3PL.\u201d<\/p>\n

Disruption or evolution?<\/h3>\n

Next Trucking\u2019s Lidia Yan believes that in the long run, digital brokers will be able to replace traditional brokers. But not everyone does.<\/p>\n

\u201cI know some [traditional brokerage\/3PL companies] are trying to go the technology way and want to do their own freight-matching software or TMS,\u201d she says. \u201cBut technology startups, we\u2019re faster, we\u2019re more efficient, we\u2019re smaller and more nimble, so we can adapt to the market a lot faster, where large traditional brokers have to disrupt themselves.\u201d<\/p>\n

KeepTruckin\u2019s Makani doesn\u2019t like the word disruption. \u201cI think that\u2019s the wrong framing. I think business is evolving. Fleets, carriers, are recognizing that they can benefit from technology. There was a lot of resistance at one point, but that has really changed. You\u2019re seeing drivers, even small fleets recognize they need to use modern technology if they want to compete.\u201d<\/p>\n

At the same time, however, \u201cWe think brokers and 3PLs serve an important function. To us it\u2019s not about replacing the broker or 3PL \u2013\u00a0it\u2019s about enabling them, allowing them to access capacity in a much more efficient way.\u201d<\/p>\n

Truckstop.com\u2019s Cole also takes issue with the notion of disruption. \u201cThese new entrants, and the funds being poured into technology in the transportation and logistics industry, it\u2019s bringing awareness of what technology can do. Unfortunately, I think sometimes some of the new entrants talk about how they\u2019re going to \u2018disrupt\u2019 the industry more than they talk about how they\u2019re going to enable the industry.\u201d<\/p>\n

Transplace\u2019s Thomas believes technology that completely replaces the relationships between shipper, carrier, and broker or 3PL with automation is \u201cprobably missing the finer points. Ultimately there are still choices. People do business with the people they want to do business with. I believe the companies that will flourish will keep relationships with carriers as part of their arsenal.\u201d<\/p>\n

y Deborah Lockridge<\/a><\/p>\n

Source: https:\/\/www.truckinginfo.com<\/a><\/p>\n

FLEET MANAGEMENT AUDIT<\/h3>\n

Fleet management is the use of a set of vehicles in order to provide services to a third-party, or to perform a task for our organization, in the most efficient and productive manner with a determined level of service and cost.<\/p>\n

Fleet management activities are shown in the following graph 1:<\/p>\n

\"fleet<\/p>\n

Graph 1: fleet management activities<\/p>\n

The proposal audit analyses and assesses all fleet management activities shown in the graph 1, and its main goals are:<\/p>\n