The modern state of freight management rests upon efficient, timely, and quality service. At the same time, capacity is harder to secure. In the last 12 months, the pendulum has swung in the carriers’ favor, and they have their pick of freight right now. Customers want their orders as soon as possible. There’s also an omnipresent threat of disruption. To respond to this kind of storm digital freight brokers must be armed with the right tools to help shippers eliminate inefficiencies and create more sustainable logistics solutions. Let’s drill down into some of those solutions digital freight brokers provide by using technology.
Digital Freight Brokers Can Provide Full Transportation-as-a-Service
Managed service or full transportation-as-a-service is among the latest advances to come out of digital freight brokers. This approach seeks to enable full logistics management as a turnkey solution, eliminating the need for shippers to manage their own supply chains. Non-asset-based brokerages make money by connecting the dots between shippers, carriers, and other freight management parties, and while they might not own assets, providing a high level of full service across all logistics needs, such as multimodal and omnichannel, with one contact, one solution, is critical. In essence, shippers can realize more value by effectively expanding their network to include all those entities that work with brokers. It further depends on the digital brokerage’s ability to leverage their existing tech stack to connect with more carriers, empower shippers with technology and better collaboration, and apply such capabilities to secure more capacity and keep costs under control.
Digital Freight Brokers Leverage Automation and Digital Freight Matching to Source More Capacity and Increase Throughput
The basic premise behind all non-asset-based freight brokers is transportation management for other parties. That means they are in the business of matching resources between carriers, shippers, and even other 3PLs. However, the volume and scale of today’s network require a better process than the archaic phone call, quote, call back, share, and maybe accept a freight load. That’s where today’s digital freight brokers have put the power of technology to work to enable collaboration through real-time freight load matching that analyzes data to find the carriers with available capacity and most likely to accept a given load based on its terms.
Meanwhile, integration between systems allows for more efficient back-office management, so shippers realize instant quoting, booking, and schedule without the hassle of traditional load board searches or trying to find such capacity. And by automating other parts of the process, such as dock scheduling software or even an existing TMS, digital freight brokers can enable the full digital transformation of the freight management process to where it simply works automatically in the background and allows everyone to focus on top priority issues that require human intervention.
Digital Freight Brokers Can Connect Shippers to Carriers More Easily and Faster
Brokers play both sides of the freight market, taking action with both the shipper’s and carrier’s best interests in mind. It’s that balance that enables brokers to connect shippers to carriers and vice-versa.
While demand for their services is high, carriers still face their share of both performance and financial pressure. Digital freight brokers that recognize this reality will be able to build better, more productive and enduring relationships with carriers on behalf of their shipper customers. These relationships are instrumental in ensuring shippers have access to reasonably priced capacity in times where capacity is in short supply.
Having those relationships with carriers and understanding what each carrier likes and does not like is always important. There are still real cost pressures on these carriers. Digital freight brokers use technologies, such as quick payment options to carriers, to aid in keeping carrier cash flow in a healthy place. Digital freight brokers know that carriers need to be successful in order to have a successful supply chain. It is not a zero-sum game any longer where a broker beats down carriers to get the price and capacity the shippers are asking for. Technology, which provides more transparency into the entire process, brings entities together so they may collaborate and build relationships over time.
By establishing relationships early and reducing unnecessary costs for carriers, brokers create more cost-effective supply chain solutions that yield lower total transportation costs, often by getting favorable rates, but also securing capacity more reliably, passing the savings along to shippers. It’s a win-win for everyone.
Digital Freight Brokers Use Technology to Gets loads Accepted Faster
The win-win above amounts to more efficient load acceptance, allowing shippers to confidently secure raw materials and products on the inbound side and meet sales delivery timeline promises on the outbound side. It’s all part of the process to connect loads to available capacity more efficiently.
“A better algorithm that gets loads accepted faster and an efficient system for dealing with exceptions is what will allow digital freight brokerages to do more with fewer resources than analog players — as long as they can recruit the volume.” Emma Cosgrove of Supply Chain Dive
Thus, digital brokers can apply that technology to further automate back-office processes, alleviate concerns over finding short-term and long-term capacity, and keep their shipper customers happy. That’s where having the right logistics solutions and services add value.
Increased Use of Data Analytics Enables Performance Management
Today’s transportation managers operate in complex and often volatile global logistics landscapes, rely on disparate sources of data from logistics service providers (LSPs) and deal with carriers that provide different levels of service with different cost structures. Despite these external forces, transportation managers are expected to meet exacting savings targets, improve customer centricity and quickly scale operations to new markets. It’s a tough ask for a transportation manager tasked with multiple responsibilities. That’s where digital freight brokers who deploy a modern-day freight tech stack, where data and analytics improve decision-making to maximize the use of all resources and more often reach the desired outcome of securing the right carrier at the right price for the right service level of every shipment. After all, transportation can make up 40-60% of supply chain costs, properly implemented efficiencies can have a major impact on the bottom line.
That’s where logistics solutions, supported by analytics and data-driven performance management, come into play.
A strong data-driven strategy is central to enabling informed decision-making. The following benefits are offered when digital freight brokers rely on a data-driven strategy to aid shipper customers in transportation procurement:
- Gain a complete and consistent view of the carriers in the shipper’s base: Using technology, a digital freight broker can conduct frequent reviews of the carriers utilized by the shipper in order to keep costs low, without compromising the quality of service. To evaluate the carriers on an ongoing basis, digital freight brokers deploy analytics strategies to keep a dynamic carrier scorecard and work with the shipper to add carrier capacity that’s dense and meaningful, resulting in fewer delays, service issues, damage claim rates, and exorbitant costs.
- Improve transportation procurement performance over time: As visibility into carrier activity and performance increases, naturally, a digital freight broker can take that data, capture it, and work with a shipper to go into future freight RFPs or mini-bid discussions with confidence. Further, fact-based negotiations take out the need to guess what budgets might be for the next period and allow financial team members to collaborate with transportation team members on budgets.
- Optimize the delivery network: Inefficient routing and static, rigid routing guides have plagued the supply chain network for years. As freight networks change, with warehouse and distribution centers popping up or moving to respond to the rise in e-commerce and as citizens move to other areas of the country, creating an optimized transportation network is more complex than ever. Using analytics, a digital freight broker can create models that help determine the best configuration for the shipper’s distribution network based on a set of requirements and restrictions.
Digital Processes Leverage Document Management Tools to Reduce Paperwork
Another advantage of digital freight brokerage partnerships comes from the ability to reduce the physical paperwork. No, you cannot tear up the bill of lading or proof of delivery. But using technology, digital brokerages offer logistics solutions to fully digitize document management. In other words, everyone gets the sign-on-glass experience, the peace of mind of pristine recordkeeping, and a contactless solution for improved safety too.
A Digital Freight Broker is Technology Driven, Radically Transparent, and Customer Experience Obsessed
A Digital Freight Broker is investing in technology to provide logistics solutions that are highly optimized and centered on building a more resilient transportation network for shippers. Another advantage rests in logistics solutions from digital freight brokers: the power to bring all parties together and collaborate for ongoing optimization within a single system. Think of this system as a freight broker operating system. Digital freight brokers use these systems to unify people, technology, and processes all while bringing visibility into the whole process in addition to real-time shipment visibility.
This radical transparency and technology first mindset of a digital freight broker not only provides the best experience and results for shippers, it changes the perception of the value of a broker from a commodity that only aids a shipper in tactical sourcing of capacity, but to a strategic value creator who is continually working to optimize freight flows from order from the customer to the execution of the shipment, to faster payment to carriers, and an envelope of analytics to monitor and take actions that result in freight transportation solutions all geared towards optimization.
Further, this technology-driven mindset allows brokers to focus on quality and service and be available to serve the customer 24/7. It all comes together to create a more profitable business relationship among the involved parties. Thus, everyone realizes more profitability, lower prices, and improved service with such logistics services too.
Power Your Network With the Right Technology and Partnership
The best-laid plans for transportation management can and do fall short without maintaining an eye on the prize and a plentiful carrier base. Those are critical distinctions that Wicker Park Logistics takes seriously and prioritizes to enable managed services for their customers. That includes all the above possible solutions to enable turnkey, worry-free logistics. Connect with Wicker Park Logistics to learn more about how your team can put the logistics solutions of a digital freight broker to work.