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Digital Freight Matching Platforms: The Uberization of Logistics

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Global Logistics, Global Trade Daily

Digital Freight Matching Platforms: The Uberization of Logistics

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Complex networks, substantial paperwork, and inefficiencies have long characterized the logistics industry. This sector is significantly transforming with the advent of digital freight matching platforms. These platforms, often dubbed the “Uber of logistics,” are revolutionizing how freight is moved, managed, and tracked. This article delves into the intricacies of DFM platforms, exploring their benefits, challenges, and the future of logistics.

The Evolution of Logistics: From Analog to Digital

Traditionally dominated by manual processes and personal relationships, logistics has seen incremental technological advancements over the decades. The introduction of electronic data interchange (EDI) and transportation management systems (TMS) were significant milestones. However, while digitizing certain aspects of logistics, these systems did not fundamentally disrupt the industry’s operational dynamics. The real disruption came with the advent of digital freight matching platforms, which leverage advanced algorithms and real-time data to match shippers with carriers, akin to how ride-sharing apps match passengers with drivers.

Understanding Digital Freight Matching Platforms

At their core, DFM platforms are online marketplaces that connect shippers and carriers. They utilize sophisticated algorithms and vast amounts of data for real-time freight matching. These platforms streamline finding available carriers, negotiating rates, and managing shipments. By doing so, they reduce the time and effort required to arrange freight transport, increase efficiency, and optimize load matching.

The Mechanics of Freight Matching

DFM platforms aggregate data from various sources, including shippers, carriers, and third-party logistics providers. They use this data to create a digital marketplace where shippers can post their freight requirements, and carriers can indicate their availability and capacity. The platform’s algorithms then match shippers with suitable carriers based on location, load type, delivery deadlines, and pricing. This dynamic process occurs in real time, ensuring optimal resource utilization.

Benefits for Shippers

DFM platforms offer numerous advantages for shippers. They provide access to a broader network of carriers, enabling shippers to find suitable transport options more quickly. The platforms often feature transparent pricing models, allowing shippers to compare rates and select the most cost-effective option. Additionally, the real-time tracking and communication features offered by many DFM platforms enhance visibility and control over shipments, reducing the risk of delays and disruptions.

Advantages for Carriers

Carriers, too, benefit significantly from DFM platforms. These platforms help carriers reduce empty miles by matching them with available loads that fit their routes and schedules. This increased efficiency leads to better asset utilization and higher revenue. Furthermore, the streamlined finding and securing loads reduce administrative burdens, allowing carriers to focus more on their core operations. The platforms also offer quick and secure payment processing, addressing a common pain point for carriers.

Digital freight matching platforms come with advantages for carriers

Enhancing Efficiency and Reducing Costs

One of the primary drivers behind the adoption of DFM platforms is their potential to enhance efficiency and reduce costs. By automating the freight matching process, these platforms eliminate the need for manual intervention, speeding up the entire logistics chain. This automation reduces administrative overhead and minimizes human errors. Moreover, the improved load matching reduces empty miles, leading to significant fuel savings and lower operational costs.

Real-Time Data and Predictive Analytics

A distinguishing feature of DFM platforms is their ability to leverage real-time data and predictive analytics. These platforms collect and analyze data from various sources, including GPS tracking, weather reports, and traffic conditions. This data optimizes routing, anticipates potential delays, and provides actionable insights. Predictive analytics also help forecast demand, enabling shippers and carriers to plan more effectively and improve their decision-making processes.

Addressing Challenges and Concerns

Despite the numerous benefits, DFM platforms face several challenges. Data security and privacy are major concerns, given the sensitive nature of the information involved. Ensuring the accuracy and reliability of data is crucial, as incorrect information can lead to inefficiencies and financial losses. Additionally, there is resistance to change from stakeholders accustomed to traditional logistics methods. Overcoming these challenges requires robust cybersecurity measures, stringent data validation protocols, and comprehensive training programs to facilitate the transition.

The Role of Artificial Intelligence and Machine Learning

Artificial intelligence (AI) and machine learning (ML) are integral to the functioning of DFM platforms. These technologies enable platforms to improve their algorithms and matching processes continuously. AI and ML analyze historical data to identify patterns and trends, which are then used to enhance predictive analytics and decision-making capabilities. These technologies will refine freight-matching efficiency and accuracy as they evolve, driving DFM platforms’ continued growth.

Artificial intelligence (AI) and machine learning (ML) are integral to the functioning of DFM platforms

The Impact on the Supply Chain

Integrating DFM platforms into the logistics sector has far-reaching implications for the broader supply chain. By improving the efficiency of freight transport, these platforms contribute to faster and more reliable supply chains. That, in turn, enhances customer satisfaction and reduces the overall cost of goods. DFM platforms’ increased transparency and visibility also foster better collaboration and coordination among supply chain partners, leading to more resilient and agile supply chains.

The Future of Digital Freight Matching

The future of DFM platforms looks promising, with continuous technological advancements and increasing adoption rates. The integration of blockchain technology is expected to enhance transparency and security further. Blockchain can provide immutable records of transactions, ensuring data integrity and reducing the risk of fraud. Additionally, the proliferation of the Internet of Things (IoT) will generate more real-time data, improving the accuracy and reliability of DFM platforms. As the logistics industry evolves, DFM platforms will play an increasingly pivotal role in shaping its future.

Conclusion

Digital freight matching platforms represent a significant leap forward in the logistics industry. By leveraging advanced technologies, these platforms streamline the freight matching process, enhance efficiency, and reduce costs. While challenges remain, the benefits far outweigh the drawbacks, making DFM platforms a vital component of modern logistics. As the industry continues to embrace digital transformation, the “Uberization” of logistics through DFM platforms will become the new standard, driving innovation and growth in the future.

Author’s bio

Hertzel Itzhak is the Operations Manager at Golans Moving and Storage, a company dedicated to providing comprehensive moving and storage solutions. With extensive experience in logistics, Hertzel helps streamline complex moving processes for clients, utilizing advanced logistical strategies to ensure efficient and secure transportation of goods.

 

 

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Global Logistics, Global Trade Daily, News, Rail, United states news

EU and US Drive Forward with Major Rail Freight Initiatives

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EU Approves €1.7bn German State Aid to Boost Rail Freight

The European Commission (EC) has greenlit a €1.7 billion German state aid scheme to support rail freight operators, aiming to shift more cargo from road to rail and promote greener transportation methods. This initiative will subsidize the high operating costs faced by rail operators handling single and group wagon transport, which often struggle with economic viability due to their complex and less scalable nature.

Read also: Freight Train Derailment Sparks Fire Near US-Mexico Border

Single wagon load transport involves bundling individual or small groups of wagons from different consignors into one train, while group wagon transport maintains the same composition from origin to destination. Both methods face high costs due to switching, shunting, and lack of economies of scale. The EC emphasized that this state aid is environmentally beneficial and will not negatively impact competition and trade within the EU, as it merely aims to level the playing field between rail and road freight transport.

The approved financial aid will be dispensed as direct grants, with a maximum of €320 million annually, totaling €1.7 billion over five years.

US Intermodal Rail Transport Gains Momentum

In the US, intermodal rail transport from West Coast ports has been gaining significant traction. Rail operators BNSF and Union Pacific report increased volumes, partly due to the successful ‘Quantum intermodal service’ launched by BNSF and trucking company JB Hunt. This service, which began in November, targets highway freight that has traditionally never been transported by rail, aiming to convert it to rail transport.

Darren Field, JB Hunt’s intermodal president, highlighted the success of this initiative at an investor conference, noting the positive reception and long-term growth potential for the intermodal business through the Quantum product.

Rising transloading activities have also bolstered optimism about the future of intermodal transport in the US. This optimism is reflected in BNSF’s $1.5 billion Barstow International Gateway project proposal. This 4,500-acre complex will feature a block-swap yard, support yard, warehouses, and transload centers, facilitating the transfer of goods from international containers to domestic ones for eastbound rail transport. The project, which aims to reduce congestion at Los Angeles and Long Beach ports and eliminate the need for an 80-mile drayage to Southern California intermodal terminals, is expected to begin the permitting process by late 2027.

These initiatives in both the EU and US mark significant steps towards enhancing rail freight infrastructure and capacity, aiming to create more efficient, sustainable, and competitive logistics networks.

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Global Logistics, Global Trade Daily, News

FreightWeekSTL 2024: Unveiling Innovations and Trends Shaping Global Supply Chains

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The St. Louis Regional Freightway is gearing up for the 7th annual FreightWeekSTL, scheduled from May 13 to 17, 2024. This week-long event promises a dynamic blend of virtual and in-person activities, including a riverboat tour and engaging discussions, all centered around the latest innovations and trends impacting freight movement. With a focus on highlighting the pivotal role of the St. Louis region in advancing major infrastructure projects and supporting the global supply chain, FreightWeekSTL is set to provide invaluable insights for industry professionals.

Mary Lamie, Executive Vice President of Multimodal Enterprises for Bi-State Development, expressed excitement about hosting FreightWeekSTL once again. The event aims to address challenges, showcase innovations, and underscore investments influencing the global supply chain. Lamie emphasizes the significance of the St. Louis region in bolstering freight movement and fortifying the logistics and manufacturing sectors.

While the majority of conference activities will be conducted virtually, there are opportunities for in-person interaction. Participants can join a riverboat tour on the Mississippi River to explore critical elements of the region’s multimodal freight network. The Freight Summit Luncheon will feature discussions on Infrastructure Investment as an Economic Driver, along with the unveiling of the 2025 Priority Projects List. The event will conclude with a Tailgate Happy Hour prior to a thrilling MLS soccer game.

A series of virtual panel sessions will delve into various topics, including technological innovations, supply chain visibility, collaboration, and trends impacting agriculture and the barge industry. Notable speakers such as Rob Cook from Sheer Logistics and Ken Eriksen from Polaris Analytics & Consulting will share insights and expertise on navigating the evolving landscape of freight movement.

Additionally, FreightWeekSTL will highlight workforce opportunities within the logistics and manufacturing sectors, showcasing ongoing collaborations aimed at nurturing talent in the St. Louis region. The event will also unveil the latest Industrial Real Estate Market Report, emphasizing the region’s industrial strength and global connectivity.

With an exciting lineup of activities and discussions, FreightWeekSTL 2024 promises to be an enriching experience for industry professionals, whether attending in-person or virtually.

To learn more about FreightWeekSTL and to register for any of this year’s sessions, visit https://freightweekstl.thefreightway.com.

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3pls, Global Logistics, Global Trade Daily, Uncategorized

2024 Brings More Nearshoring and Freight Fraud

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Some market trends continue to take center stage over others as 2024 continues. We’ll see an uptick in fraud and theft as well as increased effects of nearshing on the Southern border. Industry experts need to stay knowledgeable in order to make well-informed decisions in advance of the new year. 

Nearshoring is moving some manufacturing into Mexico versus the Pacific region, and that is changing the way products flow into the U.S. in a great way. I don’t see that being reversed. We’ll continue to see more companies go into nearshoring. In Laredo, Texas, specifically, volume is up roughly 45% from a year and a half ago and capacity is being shifted to the border to meet demand. It’s important for shippers to have inbound capacity so you can properly source the outbound capacity that’s needed to import those goods. That is a challenge and the industry will have an adjustment period before settling in. 

However, the main trend that I want to focus on as we continue into 2024 is fraud and cargo theft in our industry. We’ve all recently heard about numerous fraud and cargo theft stories. We are looking into roughly 50-55% minimum increase of fraud from Q2 2022 to Q2 2023. And, in some lanes, activity is up well into a 200% fraud increase. 

What we’re seeing today seems to be a very sophisticated approach to fraudulent activity that is probably not U.S.-based. Not only does recent fraudulent activity in the industry include spoofing and tracking software, but also setting up fake domains for small and large carriers as well as fake domains for a third-party logistics company (3PL). Industry crimes are getting more and more complicated. Criminals create fake domains for email purposes that look almost identical to an actual 3PL’s domain and companies who do not take a second look will miss the small details and potentially fall victim to such crimes.

Bigger companies are getting better at spotting fraudulent activity but it’s the smaller mom and pop operators that need to be more vigilant. The small one to ten truck carriers may not have sophisticated cybersecurity practices in place to catch this kind of activity. That’s why they have to do their due diligence from where they’re getting a load. They need to always confirm it’s a 3PL that they’ve worked with or it’s a reputable 3PL with freight that’s actually being managed by that 3PL. The small 3PLs that may only cater to warehousing, receiving, and cross-docking, are the ones that need to stay current and educated on recent market developments and ensure there are standard operating procedures in place for every load. Small carriers and 3PLs need to have safeguards in place to prevent an erroneous load from shippers. In turn, shippers need to be involved and conduct due diligence on the personnel at a dock, warehouse or distribution center. Due diligence could be as simple as physically walking to the appropriate area to confirm the carrier picking up the load is the same as it appears on the bill of lading. It’s very easy to sign a rate confirmation and send it without paying attention but those extra few moments are the differentiators between being safe and falling victim to load scammers. Companies need to realize that it’s more beneficial and cost-effective to be proactive instead of reactive.

Industry movers need to keep these trends in mind as we move further into 2024. With a slower U.S. economy, nearshoring developments, and increase in fraud and cargo theft activity only shows that businesses have to be more vigilant and in-tune with market developments so that they can overcome incoming industry challenges head-on. 

Author Bio

Karl Fillhouer is the Vice President of Sales and Operations of Circle Logistics, a privately held third-party logistics company committed to delivering on three core promises to their customers: No Fail Service, Personalized Communication, and Innovative Solutions. Circle Logistics leverages its technology, industry experience, and employee ingenuity to develop industry-leading transportation solutions. For more information, visit https://circledelivers.com/. 

 

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Archives, Global Logistics, Global Trade Daily

Market Study On Freight Management Systems: Driving Efficiency and Streamlining Logistics Operations

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Research Nester, is thrilled to reveal the insights of the expanding Freight Management Systems (FMS) market, anticipated to grow at 10.69% CAGR from 2022 to 2031. This sector is witnessing progress, fueled by the demand for improved operational effectiveness, cost reduction, and instant visibility, in the worldwide logistics industry.

In today’s world, where the global economy is growing rapidly and supply chains are becoming more intricate it has become increasingly important for businesses in sectors to prioritize efficient freight management. To overcome these challenges, the market for Freight Management Systems provides software solutions that effectively streamline logistics operations enhance visibility of freight and enable a seamless end, to end view of the supply chain.

The Freight Management Systems market is expected to witness growth in the coming years mainly driven by the rise in global trade and the adoption of advanced technologies like AI and IoT. Additionally, there is a growing demand for effective and affordable solutions, for optimizing freight operations. In 2021, global trade hit a record surpassing USD 28.5 trillion. This represents an increase of nearly 13% compared to the pre pandemic level of 2019 and an impressive growth of almost 25% from 2020. The expansion of trade and the trend towards globalization have played a significant role in the substantial rise in the movement of goods, across borders. To aid companies in navigating this landscape FMS offers a range of tools that enable efficient management of transportation networks, optimization of routes and ensuring prompt delivery of goods.

Furthermore, the rising requirement for transportation and logistics coordination along with the growing necessity for better insight, into supply chains are anticipated to fuel the expansion of the Freight Management Systems Market. According to a report released in 2021, around 41% of supply chain executives have shown interest in investing in real time visibility for their supply chain. Moreover, it is projected that by 2026, over 76% of companies specializing in supply chain management software will integrate analytics, artificial intelligence and data science into their solutions. More and more companies are turning to automation to cut down on expenses and improve the effectiveness of their supply chain processes. By implementing FMS companies gain an insight into their supply chain operations allowing them to make smarter choices regarding sourcing materials and optimizing their transportation and logistics network.

In 2022, road freight transportation took the lead in the global freight management system industry market share. This was primarily driven by the growing demand for reliable delivery of goods the surging popularity of e commerce and the requirement, for effective transportation of merchandise. By 2050, it is anticipated that the transportation of freight on roads will reach 39 trillion tonne kilometers, which is a significant rise, from the 6.300 trillion tonne kilometers recorded in 2010. In addition, road transportation offers the benefit of reaching locations and the capability to carry a wide range of goods including both hazardous materials and temperature sensitive products. That’s why many e-commerce and logistics companies prefer using road freight as their mode of transportation.

The transportation industry is expected to capture high share of the North American freight management systems market owing to the various government initiatives aimed at developing the infrastructure sector. As of 2022 the transportation industry in the United States is valued at USD 1.35 trillion, and over 4.28 million businesses are operating in transportation and warehousing. Moreover, the government has introduced programs like the Fixing Americas Surface Transportation (FAST) Act, which has allocated funds for infrastructural undertakings and the advancement of improved freight management systems. Consequently, this has led to an increased need for systems, in the market of North America.

Key players, in the Freight Management Systems sector consist of MCLEOD SOFTWARE, Freightview, Freight Management Systems Inc., Linbis, Inc., Logisuite Corporation, DreamOrbit Softech Private Limited, THE DESCARTES SYSTEMS GROUP INC, Oracle, Werner Enterprises, MercuryGate, Blue Yonder Group, Inc., Manhattan Associates, E2open, LLC, TMC C.H. Robinson Worldwide, Inc.), SAP SE, and others.

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Archives, Global Logistics, Global Trade Daily, News

TT Club Supports NaVCIS to help Combat Freight Crime

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The National Vehicle Crime Intelligence Service (NaVCIS) is a police unit with a freight team that collates, analyses and disseminates Road Freight Crime information across England and Wales. The unit has been recently tasked by the UK Government’s Home Office with delivering a Problem Profile on freight crime.  TT Club is supporting NaVCIS Freight and its report with the aim of obtaining increased public funding to address the situation.

The ten-thousand-word report entitled ‘Profile of HGV, Freight & Cargo crime across England & Wales 2022’ (Freight Crime) now completed, is extensive in detailing a range of aspects from types of crime to varied methodologies and from locational analysis to direct and indirect costs to cargo owners and the economy overall.  It also has an number of recommendations on how such crimes can be combatted.

The report and other NaVCIS Freight analysis estimated the value of losses across England and Wales in 2022 amounted to £66.6 million.  There were 4,995 HGV and cargo crime notifications received last year (with data on reports still coming in) and NaVCIS Freight participated in 284 arrests, supporting a further 43 crime operations involving this type of crime.  The unit’s work has in part been responsible for the reduction in the indirect cost to the national economy from an estimated £700 million in 2019 to £428 million in 2021.

 Key conclusions outlined in the Freight Crime report are:

  • Freight crime is committed by Organized Crime Groups (OCGs), prepared to travel hundreds of miles; highly skilled, determined and mobile criminals, aware of police tactics.
  • This is a low risk and high reward crime, regrettably low on police priorities due to available resources.
  • Supply sector under intense pressure from effects of crime, which causes disruption and delay, impacting the viability of companies, retention of staff, and investment in the UK.
  • Lack of a central crime category or tag means crime largely hidden, lenient criminal justice outcomes following prosecutions and low priority for action by government.
  • Lack of investment in infrastructure, particularly in improvement of parking security standards, to be sufficient to deter criminals.
  • Direct public health risk may arise from stolen medicines and food stuffs.

A recent example of NaVCIS’ effectiveness in combatting these crimes and bringing the perpetrators to justice is provided by Operation Luminary involving eighteen months work as a result of which three criminals were jailed for a range of offences related to the theft of lorries and trailers containing cargo to the value of over a million pounds.*  The methods used were sophisticated and included the use of advanced technology such as scanners, key cloning equipment and tracker radios to trace vehicles and block communication signals.  With NaVCIS’ help further successful prosecutions are anticipated surrounding serious freight offences across the country.

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Archives, Global Logistics, Global Trade Daily, News

Split decision: Unions for Railroad Engineers and Conductors Take Different Routes in Freight Rail Contract Ratification Vote

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Members of the Brotherhood of Locomotive Engineers and Trainmen vote to ratify national rail agreement with the nation’s Class I railroads; operating craft (Train & Engine service) members of the Transportation Division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers have voted to reject it, while non-operating craft members (Yardmasters) have voted to ratify their national agreement.

Voting concluded midnight Sunday for members of the Brotherhood of Locomotive Engineers and Trainmen as well as the Transportation Division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers on proposed new five-year collective bargaining agreements with the nation’s Class I railroads. BLET members voted to accept a tentative agreement reached on September 15; SMART-TD train and engine service members have voted to reject their proposed contract, while SMART-TD yardmaster members voted to accept. BLET and SMART-TD are the two largest rail unions, accounting for half of the unionized workforce on the nation’s largest freight railroads.

The five-year agreement ratified by BLET members addresses rates of pay, health & welfare, and other fringe benefits for approximately 24,000 locomotive engineers and other rail workers represented by the union who are employed by the nation’s Class I railroads.

A record number of eligible BLET members participated in the ratification vote with 54% voting in favor and 46% voting against.

Turnout among the more than 28,000 eligible SMART-TD members was also a record high. 50.87% of train and engine service members represented by SMART-TD voted to reject the TA, while 62.48% of SMART-TD represented Yardmasters voted to ratify.  Representatives from SMART-TD will now head back to the bargaining table with the National Carriers Conference Committee (NCCC), which represents railroad management, to negotiate new terms for the affected train and engine service members.

Under the provisions of the Railway Labor Act, the labor law for workers employed by railroads and airlines, contracts don’t generally expire, they become amendable. After the unions filed their Section 6 notices with the NCCC in November 2019, talks began in January 2020.

A status quo agreement between SMART TD and management is in effect until December 8 . Beginning  on December 9, SMART-TD would be allowed to go on strike or the rail carriers would be permitted to lock out workers — unless Congress intervenes.

If there is a strike by SMART-TD or any of the other three rail unions that have rejected proposed contracts with the carriers, BLET and the other eight rail unions that have ratified agreement have pledged to lawfully honor their picket lines.

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Archives, Global Logistics, Global Trade Daily

Are Freight Companies Working Towards Decarbonization?

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The World Benchmark Alliance (WBA) published the Climate and Energy Benchmark on the Transport Sector two days ago. It analyses 90 companies, including 25 airlines, 17 shipping companies, nine rail operators, six road transport firms and 33 multimodal companies.

The WBA assesses and ranks high-emitting companies on critical issues supporting decarbonization and the energy transition. The report examines current and future decarbonization plans and their past and present performance to determine their alignment with the Paris Agreement goal of limiting global warming to 1.5° Celsius and their contributions to a low-carbon transition.

According to the assessment, 85% of the companies have fleets that will be unable to operate in a low-carbon future, and only 7% of the companies have publicly stated plans to phase out fossil-fuel-powered modes of transportation.

The report says: “Investment in R&D is critical to ensuring that new technologies can come to market more quickly, as is working in partnership with suppliers and developers such as vehicle manufacturers or fuel producers. However, 94% of companies do not provide any meaningful data on research and development into low-carbon vehicles and fuels.” It adds: “A few companies are using their influence to push for infrastructure solutions, improved climate policy, or customer behavior change.”

Aside from decarbonization, the study looked at the implications for workers and customers as a component of ensuring a low-carbon transition that leaves no one behind. The 90 transport companies employ an estimated 9.6m people worldwide, but only 43% have a publicly available policy statement to protect their workers’ health and safety. Furthermore, only three companies provide quantitative data on worker health and safety.

Nonetheless, some businesses stand out as examples of good practice. Maersk is one of the few companies that has made it a policy to work with trade associations on climate issues. It reviews its membership status annually to ensure that its trade associations comply with the Paris Agreement.

According to the benchmarking, some solutions that transportation operators will need to implement, such as alternative fuels and cleaner vehicles, are still in the early stages of development.

Despite the challenging landscape described by the WBA’s Climate and Energy Benchmark, some decarbonization initiatives are being implemented gradually.

For instance, in June 2021, the International Maritime Organization (IMO) adopted a series of agreements on regulations around the “carbon intensity” of shipping. More details and adopted strategies can be found in Ti’s Logistics & Supply Chain Sustainability Report 2021.

Another recent example is the Green Corridor to support sustainable shipping. The Memorandum of Understanding (MoU) was signed by the Port Authorities of Rotterdam and Gothenburg last week.

The ports will use the agreement to strengthen their ongoing collaboration on decarbonization and digitalization. In addition, it will establish a common framework for cooperation as part of the Green Corridor initiative to promote the use of alternative fuels to meet the Paris Agreement’s goals.

However, as well illustrated by the WBA’s key findings, engaging people in the transition requires a concerted effort, and a lack of action by companies could jeopardize the low-carbon transition’s success.

For more in depth information, download the Logistics & Supply Chain Sustainability Report 2021. The report addresses the impact of Covid-19 on the race to decarbonize. It examines the current impact of road, air and sea freight on environmental targets and the measures each market must adopt to reach net zero. It also contains a breakdown of the findings of the Ti and Foundation for Future Supply Chain’s 2021 Sustainability survey and comparative environmental profiles for leading logistics providers.

Supply chain strategists can use GSCi – Ti’s online data platform – to identify opportunities for growth, support strategic decisions, help them stay abreast of industry trends and development, as well as understand future impacts on the industry.

Visit GSCI subscription to sign up today or contact: Michael Clover for a free demonstration: mclover@ti-insight.com | +44 (0) 1666 519907

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3pls, Archives, Global Logistics, Global Trade Daily

Three ways freight brokers can seize the endless opportunities in today’s market

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If you’re a freight broker or prospective freight broker, you should be seeing green right now, recognizing a deep well of market opportunity not only in 2022, but looking out over the next 5-10 years, too. The supply and demand imbalance is abundantly evident, and shippers increasingly are leveraging brokerages and 3PLs to manage their freight and shifting away from working directly with motor carriers.

That means billions — likely hundreds of billions, even — of dollars in transportation spending moving toward freight brokerages in the coming years.

To illustrate this point: Just over the past two years, the amount of truckload freight in North America moved through brokerages has jumped from about 10-12% on average annually to nearly 20% last year. That trend is here to stay, along with continually climbing freight demand, meaning the percentage equates to more and more loads.

In early February, the White House’s port envoy, John Porcari, said he sees the current freight volumes as a floor for the coming years — not a ceiling. If he’s right, the brokerage market likely will become one of the fastest growing sectors of the entire U.S. economy.

However, haste makes waste, and now’s the time for freight brokerages and 3PLs to be positioning themselves to take on new customers, build their carrier base, and figure out how to scale their operations to meet this demand and capitalize on the sea of opportunities they’re adrift in.

Without the right digital tools, particularly a robust TMS platform that can scale with your operation, integrate with your shippers’ tools, and seamlessly find capacity across freight modes, brokers will be leaving ripe profits on the table for their competitors to scoop up.

From finding customers and retaining staff in a highly competitive landscape, to offering new services, expanding modes, and maintaining a network of truckers — the modern freight broker simply can’t and won’t survive with just a rates sheet, some Excel files, and a well-worn iPhone.

Here’s why:

Meeting the demands of the modern marketplace.

In today’s brokerage market, no two days are alike, and customer needs change by the minute. Also, with the brokerage market bulging, logistics providers need the ability to add new customers efficiently and cost effectively. Technology has long been viewed as optional, not compulsory, on those fronts.

That’s no longer the case.

To acquire, support, and onboard new customers, manual procedures simply no longer work. Bringing on new customers manually can bog down operations, and it skips vital support in today’s market — properly integrating systems with shipper customers and other third-parties, like motor carriers.

Also, to adequately serve customers and compete in today’s brokerage market — but especially tomorrow’s market — the ability to scale quickly, to find capacity at a reasonable price with some level of automation, and to search across freight modes to keep shippers’ freight moving, brokers need the right tools. Those that have them will serve their shippers and attract new customers. Those that don’t will erode their own ability to compete.

Attracting and retaining the right employees.

Every business in every industry is trying to navigate the pressing issue of finding, hiring, and keeping the right people so their business can run effectively and continue to serve customers.

It’s increasingly difficult to retain employees if you’re not giving them the right tools and technology to do their jobs. For those trying to retain talent with a cumbersome, outdated, ineffective tech stack, you’re creating pressure for your employees to leave and find an organization that invests in those areas.

Also, people want to feel the rewards of the job they do, and part of that is supporting customers in a way they feel is effective and that they’re happy with. All stakeholders benefit from providing the best support and service, especially your employees.

Making scalable technology core to brokerage.

The technology access issue that’s plagued medium-sized and small brokerages has mostly vanished. As has the time it takes to set up new platforms and integrate them into your current operations.

What took months of painful and frustrating setup now takes weeks, if not days. Also, the upfront cost of platforms has become accessible to brokerages of all sizes, as has their ongoing total cost of ownership.

Adopting platforms like modern transportation management systems is no longer just about return on investment or streamlining processes. It’s not simply part of your business — it’s now core to your business.

The dollar cost is obviously an important part of this equation. But thinking of technology and digital solutions as integral, and core components of your business, you reframe the cost as a revenue opportunity. You realize what it means for your business, your personnel, and your customers to be flexible and to grow, to build new revenue opportunities, and to remain a viable competitor in this booming market.

Paul Brady is the CEO of 3Gtms.

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3pls, Archives, Global Logistics, Global Trade Daily, Ocean Carriers

How to Prepare for Global Logistics in 2022

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2021 was a difficult year in global logistics due to ongoing volatility. We worked alongside customers navigating the Suez Canal block, hurricanes and cyclones, port and terminal closures due to COVID-19 outbreaks, customs and trade changes, labor shortages and more.

I’ve been in the industry since 1997 and I have never seen this level of continual disruption across the entire supply chain for this length of time. However, with this year’s volatility, I was also given a front-row seat to a new level of hyper collaboration –  including individuals going out of their way to help each other, more strategy sessions between shippers and forwarders, and continually leaning into historical data and current market insights to find smarter solutions.

As we approach another potentially volatile year, I wanted to provide key strategies for global shippers to consider.

Seek creative solutions across the entire supply chain

At year-end, we typically see a jump in demand as shippers meet quarter-end quotas and prepare for the upcoming Lunar New Year, during which many factories in China shut down. However, in early 2022, shippers will also be juggling potential delays from the Winter Olympics which will be hosted in Beijing throughout February. All of this is amid a strained supply chain market, which will take time to ease.

As you prepare for 2022, consider what different modes, trade lanes, or inland transportation strategies you can implement in your supply chain. For example, while it may not be feasible to transport 100% of your freight via air, air freight continues to be the fastest way to replenish inventory, so prioritizing specific freight can help keep cargo moving. In fact, C.H. Robinson is running on average 15-17 air charters a week globally for customers looking to avoid the congested ocean ports, and we don’t expect that number to decrease at the start of the new year.

Additionally, as demand and rates will likely continue to stay elevated through the beginning of next year, less-than-container load (LCL) shipping is a strategy to consider. Typically, space for LCL shipments is easier to find especially in a constrained capacity market, since you are only looking for some container space versus an entire empty container. We also continue to see large cost savings with expedited LCL services compared to today’s airfreight environment.

Keep in mind, LCL shipments are not going to bypass congestion at the ports, so inland strategies need to be considered. Currently, many ocean carriers are looking to move more IPI (interior point intermodal) cargo versus focusing on port-to-port. We were able to help increase the flow of cargo inland for our customers by sending more 53-foot containers so cargo on the smaller 40-foot ocean containers can be efficiently consolidated in the larger ones and loaded onto trucks or trains to be taken to inland destinations more quickly. Overall, this increased our container capacity by 25% in Southern California.

As you can see, looking at only one portion of the supply chain or one mode can only get you so far. It’s important to consider all areas to keep your cargo moving.

Utilize data and technology

Although this past year has rendered a lot of unique situations and 2022 may do the same, historical data can still help us find solutions. Finding common trends and themes in your cyclical data can give you an information advantage to make smarter decisions for your supply chain.

Additionally, the right technology tools can give you the visibility and predictability you need to adjust. For example, with the ongoing port congestion and delays, C.H. Robinson enhanced the vessel routing and tracking features within our transportation management system, Navisphere®, to increase the efficiency and accuracy of port ETAs and automatically send updates if changes were discovered. This is important because ocean shipping is only one piece of the equation. Having visibility to changes in real-time gives our team and customers a chance to react and adjust other tactics down the road.

Look to global trade opportunities

While congestion and shortages continue across transportation modes, one area where you may find opportunities for savings is in your global trade strategy. Since each country’s trade policies are unique and can change, it’s important to have regular meetings with your trade advisor to break through the complexity of your total landed costs, including understanding your costs to import, identifying duty recovery possibilities, and reducing your duty exposure via trade agreements.

For example, our team has helped shippers identify thousands to millions of dollars in tariff refunds alone. If you import into the U.S., you can easily check for potential savings and refunds with our online Tariff Search Tool. And, if you’re sourcing from other countries, our team can create a customized sourcing report sharing potential cost savings or avoidance opportunities.

Final Thoughts

While there is no one-size-fits-all approach, the above options provide shippers with strategies to help mitigate delays and identify potential savings as we enter another potentially unpredictable year.

Shippers have had to become increasingly nimble and informed over the past year, and going into 2022 it’s critical to remain agile, be open to alternative solutions, and stay informed on the latest market insights.