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