The transportation and logistics industry is in the middle of a technological renaissance, and it seems like just about everything is going digital these days. Freight matching is no exception, with shippers and carriers alike starting to see the value of streamlined internet transactions.
Spot market transactions are notoriously inefficient and expensive. Digital freight matching (DFM) can make spot transactions more straightforward and transparent for shippers and carriers alike.
Without digital freight matching, shippers and carriers that work directly together to match their own supply and demand have limited success due to the fragmented nature of the market. Freight brokers — whether traditional or digital — attempt to solve this by acting as intermediaries who can aggregate supply and demand, but their often-opaque commissions can cultivate inefficiencies and limitations.
Digital freight matching is a relatively new way to match loads with trucks in the spot market by utilizing an online platform to help automate the transaction. Currently, most successful DFM solutions are controlled by freight brokers who populate the demand side of these platforms. Brokers generally utilize the same basic constructs of their existing business models, including opaque commissions.
A more open digital freight matching platform — like Loadshop — allows shippers and carriers to connect directly, eliminating the fees and commissions that accompany transactions facilitated by brokers.
“More open digital freight matching provides a really unique opportunity for shippers and carriers to match on more freight opportunities — which is more important than ever during capacity-constrained times like we are in now,” Loadshop product leader and founder Hunter Burke said. “We’re not going to go out and replace brokers. They serve a valuable purpose, but on a growing subset of freight you can now digitally match it yourself thanks to a solution like Loadshop, and you should save a little money as a result.”
Loadshop does not charge the risk premiums brokers are required to implement, and it monetizes the product through a flat and transparent fee instead of variable commission rates.
Joe Bobko, vice president of transportation at e-commerce startup Boxed, uses Loadshop to move products with more flexibility than shipping contracts and fewer hidden fees than broker-mediated spot transactions.
“Loadshop is a transparent marketplace for a shipper that wants to be able to foresee the amount of money they’re going to spend,” Bobko said. “We’re still considered a late-stage startup, so every penny I save on moving product is money that goes back into the business.”
Bobko pointed out that Loadshop also gives shippers more control than the industry’s various digital brokerage platforms. Loadshop invites shippers to be active players in price setting and carrier selection, putting them in control of their transactions.
Burke echoed Bobko, noting that Loadshop aims to bring a wider selection of choices and greater visibility to loads. Over time, shippers and carriers using Loadshop can build trusting relationships through repeat spot transactions.
At the end of the day, Loadshop seeks to provide shippers and carriers alike with a trustworthy and efficient alternative to spot market transactions while helping to usher the industry as a whole into the future.
Visit Loadshop’s site to learn more about the company’s transparent digital freight-matching product.