Technology is now the primary differentiator for freight brokerages. Luckily, for freight brokerage businesses of all sizes and budgets, technology continues to become more powerful and less expensive each year. Many freight brokerages, like many companies in the freight industry, are adopting technology and having a mindset of a so-called “Digital freight brokerage.”
This trend will only accelerate over the next five years. The freight brokerages that do not adopt new technology will continue to be left in the analog world. While the freight brokers that adopt these technologies and business strategies will survive and thrive in the digital freight brokerage life.
What technologies are most important? What strategies do these new technologies need to address for freight brokerages? Here are five areas where technology will drive strategy over the next five years.
When it comes to technology, the lowest hanging fruit for digitizing freight brokerages is automation. Freight transactions create an immense amount of data that a digital freight brokerage will process daily. This includes PODs, BOLs, customer invoices and carrier payments to name just a few. Most of these data entry and generation tasks have traditionally been handled by brokerage employees.
This trend is rapidly changing as artificial intelligence and machine learning tools have improved to the point where most of these mundane tasks can be automated. The most technologically savvy freight brokerages have already begun to automate what can be automated. This doesn’t always mean fewer employees, but it always leads to more productive employees.
Brokerages must understand freight markets in real-time. This freight intelligence is critical for capturing changes in load volumes and truck capacity that determine day to day pricing volatility for thousands of lanes. Before this data was widely available to the industry, freight brokerages priced lanes based on their own historical data, or if this did not exist, then with third-party lane rating tools. While both of these data points are essential ingredients for pricing freight, both are backward-looking data points.
With near real-time load volume (OTVI) and truck capacity (OTRI) data delivered by FreightWaves SONAR, freight brokerages now have forward-looking data that builds predictive freight rates and dynamic lane signals for thousands of freight lanes. Freight brokerages that use the most accurate data will have a clear advantage over analog brokers running on weeks-old data and tribal knowledge.
Even the largest digital freight brokerages have a difficult time sharing customer and carrier data internally. Individual freight brokers are often protective of their customer and carrier relationships. For a freight brokerage company though, this creates inefficiencies that have an immense long-term cost to the P&L statement. Cross-sell and up-sell opportunities are missed. Multiple carrier sales teams start from scratch sourcing carriers and developing relationships with the same carriers.
Utilizing software and communications platforms that share customer and carrier information across the company not only helps drive top-line revenue with an existing customer base, but always lowers the cost of transportation procurement.
If sharing internal data is a challenge, then sharing data with customers and carriers becomes almost impossible. The secret sauce of digital freight brokerages has always been having an edge in freight market intelligence. Giving up some of this edge and moving towards transparency can be sacrilegious to many analog freight brokerages.
However, transparency is where the freight market is trending. Those analog freight brokerages that resist will ultimately lose customers and carriers to their digital peers that open their books. Customers now expect to have direct integrations with their vendors. On the flip side, smaller fleets are becoming more tech-enabled and are looking to automate processes and become as efficient as possible.
The freight brokerages that invest in freight technology to give their customers and carriers more visibility into the process will be in the best position to help their customers and carriers become more efficient, which translates into more profits for all parties. They are making the pivot to be a digital freight brokerage.
Telephone and email will always be important tools for freight brokers to connect with their customers and carriers. But technology is now providing other methods to stay engaged with customers and carriers. Customer relationship management (CRM) tools have progressed from bland customer databases to a full suite of services for customer engagement.
Business to consumer (B2C) companies have created an entirely new sales and marketing playbook using customer engagement tools for years. Business to business (B2B) companies have been slow to adopt this new strategy.
Freight brokerages that study and implement this technology and B2C sales and marketing strategies will have a clear advantage over the analog brokers that are satisfied with business as usual.
FreightWaves SONAR provides the fastest freight market data in the world, across all major modes of traffic. The SONAR platform is the only freight forecasting and analytics platform that offers real-time freight market intelligence driven off actual freight contract tenders.
SONAR has proprietary data that comes from actual load tenders, electronic logging devices and transportation management systems, along with dozens of third-party global freight and logistics-related index providers like TCA Benchmarking, Freightos, ACT, Drewry and DTN.
Whether you’re working from the office or from home, SONAR can provide you the data and intelligence you need to stay ahead of your competitors.
Find out more about FreightWaves SONAR for brokers.
You can find more information on freight brokerage and carrier sales on the popular FreightWaves sales show, Put That Coffee Down.