It’s clear that digital transformation is rapidly upon us in transportation and is changing the way managed transportation 3PLs and truckload brokerages are doing business. Advances in technology, adoption of APIs, and huge disruptor companies are evolving the market faster than most can keep up. This transformation is only accelerating.
Disruptive Companies Are Changing Customer Expectations
Uber Freight, Convoy, and Amazon Freight are examples of the new digital freight marketplaces (DFM). A DFM is designed to allow shippers to book truckloads in the spot market electronically – usually over an app or an API. It’s a service that gives real-time truckload quotes, electronic tendering, and real-time tracking. If your business is primarily a classic brokerage, then this affects you.
The DFMs are already changing the way many shippers do business. These marketplaces are not going to erase classic brokerage, but there is no doubt they will change it and the way that many are doing brokerage. Not that classic brokerage is going away anytime soon, but we are seeing a rapid evolution of customer expectations. Customers’ digital expectations for visibility, automation, tracking, quoting, and payment are now growing and will soon evolve into general requirements.
To be clear, only very few companies with deep pockets can set up a DFM. A mid-sized brokerage firm trying to compete with what Uber Freight is doing is unrealistic. Instead, companies can look at their own strengths and carve their own path. LSPs (3PLs and Brokers) have the opportunity to write their own digital transformation story or run the risk of remaining complacent in a changing world of digital technology.
What Is Your Digital Transformation Strategy?
Every LSP company should be asking themselves how they are dealing with digital transformation. As an LSP, the details of digital disruption are unique to your business model, and it’s important to have a plan. Yet many companies overthink the issue or feel it’s too large of a task to do anything about. History shows us that most winning strategies come from simple core ideas, not just massive disruptors.
Innovative companies know that disruption creates opportunity. And it’s clear that the digital transformation going on in transportation will create opportunities. Every LSP needs to look at their own business model, figure out what makes them unique, and carve a path. It’s ineffective to try to duplicate what the high-profile companies are doing. It would be like trying to replicate what Amazon did for retail. Competing against Amazon in retail is reserved for the very few, yet many have learned how to profit off Amazon by creating their own specialized fulfillment model. The same is true of the digital disruption going on in transportation.
Very few companies should be looking to compete directly against Uber Freight or Convoy. Yet all should be looking at their own model and chart their own digital transformation path. This is where transportation management software like 3Gtms is uniquely positioned to help. It is not the system that will turn an LSP into the next Uber Freight, but it will serve as the central platform – the intelligent system of record that allows flexibility in how an LSP executes its own unique business model. A TMS is the central point of an LSP’s transformation – it’s the digital disruption “enabler.”
Putting a Digital Transformation System in Place
When it comes to system structure, the key to designing a good environment starts at the core. And a successful core includes functionality and automation that supports business objects, workflow, intelligence, and integrations. For an LSP, that system is their TMS, as the TMS runs their transportation operations. Call it their “central rally point” for information or their “single source of truth.” A technology that connects customers, vendors, and carriers while serving as the platform to leverage digital disruption opportunities. A Fully Connected Transportation Management System goes beyond simple RESTful API integrations because it connects natively to other business systems and operates as an enabler for different technologies.
Leveraging a cloud-based TMS as a rallying point combines information from integrations with business intelligence for a total technology package. Turning data into business intelligence, workflows, and automation is more complicated than mapping fields. Most systems can use an API to map fields but lack functionality to determine rates/margin, find a distance, calculated drive times, chose equipment type, and most importantly, identify missing data and create this data when necessary. Technology has to be smart to execute on digital transformation opportunities. Exception-based management is a basic requirement as next-level systems look to manage as many exceptions as possible so users can focus on true issues and generate more business.
A solution like 3Gtms delivers the different integrations and technology required to build a successful digital transformation strategy. For example, the solution includes connections to load boards for TL capacity, mileage engines, tariff services for rates, OCR for paperwork and document management, ELD and visibility mapping services, carrier insurance onboarding, rate index data, informational portals, and many other features. It’s the robustness of the software in combination with the software’s integrations to create an actionable platform for LSPs to get ahead. The technology’s ability to scale is also essential, especially when maximizing opportunities created by larger DFMs.
This is where LSPs look at the technology puzzle they wish to solve. Identify customer needs, capture a larger target market, and expand business lines. What digital components do you need to meet these goals and grow your business? Is it time to explore outside of traditional silos? For example, brokers and distributors are doing more managed transportation while TL fleets are offering more 3PL services. Understand what your company does best and what your customers need, then write your own digital disruption story.
Embracing Opportunities to Digitally Disrupt
This brings us back to the digital disruption going on in the transportation industry. The opportunistic LSPs will carve their own path and realize that the key to growth lies in their core technologies. Leveraging a TMS to rally around will centralize their information and enable transportation execution regardless of their planned strategies. It’s here that 3Gtms is differentiated in the marketplace as a single platform that marries technical abilities and integrations in the LSP space. Because of this, 3G customers quickly realize the importance of having a central TMS and how this technology helps obtain their vision.
It’s an exciting point in the history of logistics as digital changes emphasize supply chain technology and the need to utilize digital strategies for success. As more LSPs upgrade their technology stack, they will be better positioned to leverage new digitally-driven opportunities. And by using a scalable platform like 3Gtms, they get advanced TMS functionality for today and all the tomorrows to come.
Are you an LSP trying to decide if you should leverage a TMS to meet your digital transformation goals? Use this checklist to see if any of your objectives can be solved by 3Gtms.
-Do you need APIs and portals for customers and carriers to interact with you?
-Do you want to use TL automation to streamline processes?
-Do you need logistics exception reporting and automation?
-Do you need workflow and process automation?
-Do you struggle to connect your ERP, OMS, WMS, carrier, customer, and vendor data?
-Do your customers need simple portals for their CSR’s to quote?
-Do you use standalone load boards, visibility trackers, SMC3 rating, distance calculations, carrier tendering, OCR document management, or other disconnected systems?
JP Wiggins is the co-founder and Vice President of Logistics for 3G. 3G is a leading provider of cloud-based end-to-end transportation management software (TMS) for omnichannel shippers, e-commerce companies, 3PLs, and freight brokers. Our solutions include 3Gtms, our multi-modal transportation planning, optimization, execution, and settlement system; and Pacejet, our advanced multi-carrier shipping software. For more information, visit 3Gtms.com.