On a recent episode of Fuller Speed Ahead, Craig Fuller, founder and CEO of FreightWaves, was joined by Dennis Lane, head of revenue at CargoWise Landside, to talk about recent trends and technology impacting the drayage industry.
CargoWise Landside, a solution area of the CargoWise platform, combines four leading drayage transportation management systems under one roof as part of a string of recent acquisitions over the past several years. This makes CargoWise Landside the largest network of drayage operators in North America.
Lane notes that the goal is to directly connect the buyers of drayage services, like freight forwarders and 3PLs, with the drayage companies handling container and intermodal movements in North America. To accomplish this, CargoWise Landside is streamlining the process through increased integration and interoperability with the global freight forwarders and 3PLs that use CargoWise.
In addition to this connectivity, Lane highlights three complementary technologies that are part of the Landside portfolio of products. The first is DrayMaster, a digital rate and quote management tool designed specifically for truckers and brokers. Another is SecurSpace, which provides an on-demand truck, trailer, and container parking and storage marketplace that connects industrial facilities with excess space to motor carriers and shippers who need it. Lastly, GeoStamp Track uses geofencing technology to track assets and give customers real-time visibility into wait times.
Technology implementation more widely achievable today
Over the past two decades, the container drayage market has undergone many technological evolutions and innovations. Lane notes when he started in the early 2000s, the early transportation management systems were not designed for container drayage shipping. Providers took a truckload or LTL TMS and made custom adjustments to work around the added complexity. In 2001, Lane and partners founded Trinium Technologies and created one of the first intermodal trucking TMSs, Trinium TMS, to fill this need. In 2018, WiseTech Global acquired the company, adding its capabilities to the expanding capabilities of the CargoWise platform.
Lane says that over his multi-decade career, drayage companies have been challenged with addressing the increasingly complex demands of landside logistics like the recent pandemics, local and regional labor disputes, and exacting regulatory and compliance demands. Electric vehicles and zero-emissions solutions are additional challenges that drayage carriers are now facing.
On the tech side however, there is a reason for optimism. Lane adds, “Overall, the biggest change from a technology standpoint is that digital transformation is very achievable compared to what it was 20-plus years ago [and] not just by large companies with big budgets.” Small to medium-size companies are able to quickly adopt newer systems and gain a competitive advantage. Drayage companies can no longer sit on the sidelines and ignore the growing need for technology adoption.
Using technology to handle wide-ranging issues
When looking at all the intermodal stakeholders, Lane points out that drayage carriers are often placed on the low rung of the freight ladder.
He said: “They have to deal with so many different companies that are outside of their customer relationship like marine terminals, rail [terminals], depots, shipper consignee facilities and ocean carriers. Dealing with all this makes the drayage business a very complex business.”
In addition to a growing number of relationships that need to be managed, drayage carriers are dealing with ever-expanding customer expectations. Their freight customers now require more from a data processing and connectivity standpoint than ever before.
The need for more connectivity is so great that in some instances, Lane sees many of CargoWise Landside’s drayage operator customers are being graded or scored more on data accuracy than on-time performance of the container deliveries..
Many drayage carriers operate on tight margins and struggle to manage all the accessorials and equipment charges that if not recovered, can increase costs and further erode margins.
CargoWise Landside has enhanced its digital rate engine to carefully account for post-shipment charges during quoting and invoicing. The expanding adoption of electric vehicles requires additional rate considerations to cover the higher purchase cost of EVs.
Another challenge for drayage fleets is driver retention. Lane highlighted one trend that went from a nice-to-have to table stakes: the implementation and use of driver mobile apps to help with their workflow and streamline driver-dispatcher communications.
Lane’s outlook for the container drayage industry
While Lane believes it can be tricky to project the industry’s direction in the short-to-medium term, he says the fundamentals of drayage supply and demand are returning to normalcy after the whiplash and bullwhip effects that the pandemic pushed onto supply chains.
He highlighted the recent decline in drayage capacity, with many drayage carriers leaving the market and fewer entering it at a time when drayage volumes are rising. Drayage carriers are hopeful that this correction in capacity will translate into higher rates, as Lane described it as a tough year and a half for drayage carriers.
From a technology standpoint, he is confident that the ongoing trend of tech adoption will continue and accelerate, but a key term is practical technology. He explained that what works and is practical for a smaller carrier may be completely different for a larger one. Rather than trying to adopt everything, drayage carriers must be choosy and understand their business needs. For more efficient workflows, Lane sees continued adoption of driver mobile apps, digital rate quoting and automated container tracing.
While tech adoption by drayage carriers of all sizes will continue, Lane believes that a big development to watch in the next five years will be the growth in data sharing among intermodal freight stakeholders, including drayage companies. He noted that in the past it felt like stop and start with progress and setbacks, but the added pressure from shippers and increasing complexity are creating more incentive for end-to-end visibility and interoperability.
“The data sharing is going to be key amongst all the different stakeholders in the supply chain, specifically intermodal, marine terminals, rails, drayage companies, BCOs [and] forwarders. I think we’re going to see a major step forward, in that data sharing will become more normal, and it will help everyone out no matter where you sit in the supply chain.”
CargoWise Landside believes it has the technology and capabilities in place to make that happen.
Click here to learn more about CargoWise Landside.