FreightWaves features commentary from Market Voices – contributors with unique knowledge of numerous transportation/logistics/supply chain sectors, as well as other critical expertise.
In the Stone Age of transportation brokerage – the 1980s – technological innovations came in the form of new equipment purchases in an effort to speed up transactions. This might be a second telephone on the desk, one of those cradles attached to a phone to hold it to a user’s ear from the shoulder, a new Rolodex or a fax machine. As the internet age took shape into the 1990s and early 2000s, a few entrepreneurs began building the first “digital brokerages.” Companies like FreightQuote.com, GlobalTranz and Echo Global Logistics launched their “Expedia for Freight” sites and have all gone on to tremendous success.
When smart phones and Uber showed us a new way to dispatch in 2013, a new breed of digital brokers was born. Companies like Cargomatic, TransFix, Convoy and now Uber Freight have captured significant market share by bringing new levels of transparency and convenience into the market for both shippers and carriers. The hallmarks of a digital broker are easily identified by customers because digital brokers automate back office tasks, use algorithms to match available loads to carriers and streamline the quoting/booking process that has been so manual in the past.
Over the past few years several companies have launched stand-alone software-as-a-service (SaaS)-based solutions aimed at delivering portions of the digital broker’s offerings at very reasonable prices. These solutions, fueled by application programming interfaces (APIs) and out of the box integrations, have gone a long way towards making digital brokerage a no-code solution for legacy brokers.
According to Wikipedia, “No-code development platforms (NCDPs) allow programmers and non-programmers to create application software through graphical user interfaces and configuration instead of traditional computer programming. No-code development platforms are closely related to low-code development platforms as both are designed to expedite the application development process. These platforms have both increased in popularity as companies deal with the parallel trends of an increasingly mobile workforce and a limited supply of competent software developers.”
In this article, I’ll highlight a few of the companies decreasing the technical complexities of digitizing your transportation company.
Automation software for back-office tasks
HubTran – One function of a broker in transportation is to act as a clearinghouse for a trucking transaction. This requires the broker to collect all required information and documents prior to invoicing a customer and paying the carrier. HubTran is a cloud-based document management software that allows carriers the ability to email proofs of delivery (PODs), bills of lading (BOLs), invoices and expense receipts. Once received via email, HubTran’s powerful optical character recognition technology and algorithms go to work organizing and separating the documents before pushing them to the desired location within a third-party logistics provider’s (3PL) transportation management software, or TMS. Many brokers see more than a 50 percent increase in productivity after implementing HubTran.
Digital freight-matching software
Parade.ai – When a broker knows the position of a truck or the position of a load, the broker has an opportunity to make a transaction. Once the broker has a truck near a load, the magic happens. The problem is load offers and truck positions come in via many information sources and it’s extremely difficult to consider all information when trying to match loads. Until now, that is… Parade.ai was founded in the Silicon Valley with the vision of becoming the next digital broker. The company’s leaders quickly realized they were better at making software than running a trucking business so they adapted their proprietary solution to become an extremely powerful load matching platform. Parade.ai’s technology will read your load offer and truck position emails, push the data into most modern TMS, then will send suggested matches to a broker’s staff. Parade.ai even boasts the ability to offer loads to a potential carrier via email with no human interaction.
Quoting and booking automation solutions
Quoting truckload shipments seems to have been the Holy Grail for digital brokers over the years. The massive size of the market, the fragmentation of the carrier base, the complexities and nuances required by each shipper all contribute to the universal interest in automating these prices. The bone pile of companies that have tried and failed in this pursuit is as tall as forgettable. Anyone working in the freight brokerage space around 2012-2013 probably remembers Partage, LLC and its online Truckload and Partial platform. Partage’s “Guaranteed Pricing” was enough to make the company insolvent within a matter of months. This market has historically just been too volatile to predict until now. Trucker Tools, Parade.ai and Truckstop.com have all introduced “Buy Now” functionality that will enable loads to be accepted by carriers without human touch. Data is the key to performing this feat and we have more access to data now than we ever have!
The venture capital-backed digital brokers referenced earlier in the article may argue to be digital, you must be fully digital and build your own technology. Still others may simply question what the actual definition of a “digital broker” is. I would answer with some abductive reasoning. If it looks like a digital broker, operates like a digital broker and automates like a digital broker then it’s probably a digital broker. But then again, if a broker is digital on its back-end and no one sees it, are they really digital?