We’ve all heard the transportation market is cyclical, right? Years are marked as “shipper” or “carrier” markets. Transportation and procurement teams are judged on how well they leverage shipper friendly years. Recent developments in transportation management have started to help take cost of out the equation rather than trade it back and forth from carrier to shipper and reverse. Much of this innovation relies on process improvement and removal of waste. Two of the most promising technologies are the digitization of freight brokerage and the use of AI and Machine learning.
Digital brokerages have several advantages over their older, labor intensive competitors. While Uber Freight and Convoy are players that have been at it for the last few years, JB Hunt, XPO and CH Robinson are also making significant capital investments in their brokerage platforms to more closely manage the digital pioneers.
On advantage of digital brokerage is speed. App based coverage systems bypass the assignment to broker, “dialing for diesel”, and other manual steps that can keep freight out of the carrier’s visibility. This speed can help freight get covered faster and at better cost.
Another big payoff in the usage of the digital broker model is the ability for very large shippers to engage with very small carriers. Many of the smallest carriers (1-5 trucks) are still operating via phone (or gasp…fax).