By Omar Singh, president and founder, Surge Transportation
It always surprises me when anybody chooses to arbitrarily limit their options. In this conversation, we’re discussing limiting the number of brokers shippers work with based on, well, the number of brokers they work with rather than based on the specific strengths and weaknesses of their broker partners.
When it comes to motor carriers, the selection of carrier partners is much more deliberately made on the strengths of those carriers. Some only operate in certain regions and they are selected for their capacity footprint. Some only operate a certain type of trailer and they are selected for that service line. Some have more capacity to provide drop trailers and are selected for their trailer pool capacity. Some operate cross-border, and the list goes on.
While brokerages may not have as clearly defined of a physical operating region as some motor carriers — and large brokerages are rather expected to be able to do everything and have all of the capacity — it does not necessarily mean that they do everything equally as well. In fact, even the largest brokerages do have strengths and weaknesses and hence are not all the same.
I will admit that there are certain areas where we do not have very established capacity relationships — yet, hopefully. There are certain commodities that we are not the best at hauling. I would expect my customers to very likely partner with different brokers who are stronger at hauling produce in the Pacific Northwest than we are so that they have a more stable supply chain and a deeper pool of brokers to contact for their different needs throughout the country.
Before Surge made the digital transformation into real-time API pricing, routing-guide optimization, TMS integrations and automated carrier procurement, it was very rare that a prospective customer wanted to have a conversation about our strengths or weaknesses rather than one about the number of brokers it already works with and hence does not need another. It is much more productive to have a conversation with a prospect about where a partnership can provide value and, honestly, where partners cannot provide value than to have one about an arbitrary number of partners in general. They may not be easy conversations and you have to be compelling and valuable nonetheless, but at least those conversations take place in a space where the idea that there may be potential for a partnership is on the table if we just evaluate strengths, weaknesses and expectations thoroughly enough.
Surprisingly, now that we’ve made the digital transformation and we are providing incredible value with our real-time routing guide optimization technology, that mindset of the number of brokers doesn’t seem to have changed that much. I have spent the greater part of two years now writing and speaking about how everything is going digital — routing guides are going digital, brokerages are going digital, pricing is going digital, carrier procurement is going automated, RPAs are taking over whatever APIs cannot do. While it is certainly true that digitization is penetrating all things supply chain, it’s actually happening a little more slowly than I had expected. There is much more of a pick and choose taking place with the selection of which digital technology shippers, carriers and logisticians want to deploy across their workflows. While all of the options are available, there is a lot more careful thought being put into the right way and timing to apply it rather than a no-brainer mindset to move forward now.
Returning to the introduction of this discussion, a couple of years ago I would have said that in 2023 every carrier and broker is going to have to be providing real-time API pricing just to be relevant in a shipper’s network. The feedback that we are getting from many in the shipper community is they just want a small handful of digital providers — luckily we are included — enough to create a price-competitive environment among ourselves, some diversification of strengths and the rest of their providers can continue doing things in the traditional way. This is a far cry from every single service provider returning automated rating. Also, the somewhat common mindset of only working with a few brokers has reproduced to only wanting to work with a few digital brokers.
As I close out this conversation and this year and this editorial column, I have to say that it remains exciting to me to watch the evolution of FreightTech. There are new technologies surfacing on what seems to be a weekly basis, our company continues to forge new TMS partnerships and continually build and release new enhancements to our technology and develop our trusted customer base. I continue to spend a lot of time sharing ideas with competitors helping to make each other better.
While some tech adoption rates are certainly not as fast as I had anticipated, and some legacy mindsets are slow to change, the transformation is taking place. I have no doubt that before long we are going to look back and laugh at how we used to do it.
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