How Technology Is Helping Freight Brokers Remain Competitive and Profitable

Technology is becoming indispensable in all aspects of transportation management, especially in third-party logistics (3PL) and freight brokerage businesses. On the one hand, one may claim that technology is upending the established order. On the other side, one may argue that it contributes to leveling the playing field. How important is technology in assisting freight brokers, particularly small and medium-sized enterprises, in remaining competitive?

It’s an understatement to say that freight brokerage and logistics are competitive, especially in recent years. Due to the pandemic, many individuals purchase items online and have them delivered to their homes. In June, July, and August last year, truckload volumes and prices reached new highs. Each week, it appears that a new record is established in the industry. Finding vehicles has become increasingly challenging as a freight broker or third-party logistics provider due to high volumes and rates, supply chain issues, and a labor shortage.

Using technology to optimize freight operations is one of the most successful strategies for coping with market volatility and capacity constraints. Freight brokers may leverage various techniques to keep one step ahead of their competition and thrive in a continuously changing market. Below are some ways through which freight brokers are using technology to remain competitive and profitable.

Freight brokers can get an advantage over their competition by utilizing digital freight matching technologies. In a matter of seconds, the software can search for in-network and out-of-network capacity using technologies like digital freight matching. Automated freight matching displays the only available total in comparison to loading boards. When a load requires coverage, making a few phone calls to a few carriers is substantially more efficient than cold-calling a large number of them. Businesses may also utilize digital freight matching technology to investigate capacity and routes for their shipper clients if they need to transfer production or distribution sites.

Predictive load matching can assist freight brokers in maintaining a competitive edge. This can be used to forecast future capacity availability, by considering current truck movements and data from the platform. When a freight broker or logistics provider knows where capacity is likely to become available in the future, their ability to plan and acquire capacity before it becomes publicly accessible is significantly boosted. They can contact carriers ahead of their competitors that rely solely on load boards, phone calls, and emails to obtain capacity due to predictive load matching. 

Before the epidemic, shippers placed a premium on the real-time visibility of their goods. Since then, the need for real-time exposure has increased even more. Real-time load tracking data is critical for keeping and potentially growing your customer base as a freight broker or logistics business. Real-time visibility technology makes it possible to meet and even exceed even the most demanding shipper visibility standards. Freight brokers may communicate load tracking updates with shippers through the software. This is a feature that is appreciated by a large number of shippers.

It is critical to be seen in this new environment. ELDs and telematics have enabled truckers to track their cars at all times and get insight into their pricing, detention rates, and other company operations. One element contributing to the rising need for supply chain openness is the so-called “Amazon effect”. They want to know when and where their order is in the system. While large package carriers such as UPS and FedEx can do so, small carriers lacking in visibility risk being shut out of the sector.

One of the significant benefits that technology brings to the supply chain is the ability to see freight movements across multiple different carriers, allowing shippers to plan their activities more precisely. Whether it’s inbound supplies for factories or outbound distribution, they can focus their efforts.

It’s not only the shippers that benefit from this – but such technology also benefits carriers who have contracts with those shippers, enabling those carriers to give the kind of visibility that may be a must-have requirement for the shipper.

Operational costs rise when the time and resources required to execute a task increase transportation. If, for example, you have to contact ten carriers to cover a load or make six check calls to trace each shipment, the cost per load increases. It is significantly more efficient to execute these activities using technology that automates these manual tasks and provides real-time data based on freight availability and visibility. Additional benefits can be obtained by improving their processes. Manual processes may be automated to free up time and employees for revenue-generating activities and relationship building, allowing freight brokerage businesses to expand without incurring additional overhead expenditures. 

It is critical that freight brokers employ the right technology to engage with carriers and retain them as members of their network. If drivers and carriers find a freight broker’s system onerous, ineffective, or difficult to use, they may be less willing to run their goods again. It is critical to deploy carrier-friendly technology to attract new carriers and retain existing ones. Companies that give carriers round-the-clock access to their loads and the option to book them digitally via a mobile app or free carrier software platform are miles ahead of their competition in load processing and profitability.

When carriers are actively seeking cargo, the app can enable the broker or shipper to meet them where they are. Such an app and web platform can enable them to accomplish the goal of simplifying doing business with them.

According to a study, only around 30% of truck freight is traded on the spot market. Both shippers and airlines prefer long-term contracts for certain routes. However, because many small brokers and carriers continue to use spreadsheets, notebooks, telephones, and laminated maps as their primary tools, a significant amount of transactional freight and inefficiencies remain to be addressed.

There are still ancient techniques of connecting a cargo to a transporter in use today for commercial freight. However, the concept of utilizing technology to assist in matching available loads to available trucks on the spot market is not new. Dat.com and Truckstop.com, for example, created their own online load boards and have subsequently spent considerably in technology to assist brokers and carriers in matching with cargo. C.H. Robinson, one of the world’s major 3PLs, provides computerized tools to its contract carriers. And they have become the biggest names in the industry.

One of the most critical areas for visibility has been made feasible by advancements in pricing and payment technologies. Enhanced pricing transparency enables carriers to make rapid pricing decisions.

Carriers profit more as a result of computerized bidding. Carriers may use the mobile app to choose the routes they wish to operate, the hours they wish to manage them, and the amount they choose to pay. When a new cargo is added to the network, the computer can compare it directly to the user’s preferences. If all goes as planned, the carrier can just be required to accept the load given by the app. There will be no bickering, back and forth, or phoning to inquire about fresh shipments.

Your software can make an API connection with the shipper’s transportation management system (TMS) to acquire shipment data and then subject each cargo to a machine learning pricing algorithm to provide a live, bookable rate straight to the shipper’s TMS for booking reasons. An automatic server comparison can be conducted instead of a shipper’s load planner manually comparing dynamic pricing to their routing guide’s fixed rates. Because the cost is updated in real-time, it may be booked with a single click.

So you see to grow big in this industry and remain profitable even in tough times, you need to invest in data analytics and automation technologies. The technology does wonders when implemented correctly – you can automate repetitive tasks, eliminate human error, vastly speed up communication and load booking, see real-time updates, get critical business insights, and much more. If you have been looking for a technology partner, get in touch with Freight BnB today and book a free consultation.