The truckload carrier’s role in the freight network remains much the same as it has for many years. However, the specific services of how a freight broker business functions today have changed. As companies scale and grow to adapt to changes in market trends and customer demands, so too do freight brokerage services. But enabling that scalability requires full transparency and the ability to find more capacity without incurring higher rates that go outside of the shipper customer’s desired budget. There’s simply too much at stake to brow-beat carriers into a bidding war. Rather than forcing the hands of carriers, today’s freight broker business owners must turn to technology to figure out how to enable more proactive and strategic freight management. At the heart of this growing trend is the need for technology that gives visibility into the entire transportation procurement process, where the modern-day brokerage leads with radical transparency for customers, fostering a collaborative culture focused on solving problems and providing tangible benefits for shippers.
Challenges Driving Interest in Freight Broker Business for Freight Management
Thanks to the rise of e-commerce, online sales, and communication, transportation networks have become global by nature. Every transaction and relationship are reliant on a long chain of actions before and after that point of contact. Freight managers have to be experts on factors as diverse as geopolitical risk and cultural mastery, where freight broker business can excel. Challenges in the industry are still making it difficult for companies to increase throughput and execute on the needs for more. For instance, consider these challenges:
- Freight load management
- Capacity procurement
- Fleet management
- Customer service
- The complexity of shipping services
Navigating these challenges successfully requires clear direction and oversight — precisely what a freight broker can provide. For today’s freight brokers, that amounts to:
- Accurate freight market forecasting.
- Visibility tools to stay strategic with asset management.
- Quick-pay financing options.
- Continuous collaboration.
Modern Freight Brokers Use The Best-In-Class Freight Tech Stack
Strategic capacity procurement is all about maximizing available resources, and that often includes using a single source of truth for visibility. Typical examples in the industry include project44, OceanInsights, Parade-AI, and many more. Of course, some brokers rely on outdated load boards exclusively. While that may work in a pinch, it falls short of meaningful improvements and true digital freight matching access. That’s where a modern freight broker can make the most significant improvements for shippers. Using their collective bargaining power, they can leverage those third-party resources and bring them together in a single tech stack.
The result is the same for shippers; they realize the benefits of casting a wider net and avoid the hassle of payment management with multiple carriers when the shipper works with brokers using platforms, like HaulPay — and still generate a ton of data.
That data can then be pooled and applied across vast record systems in the brokerage, ranging from a TMS to a freight forecasting platform, allowing the freight broker business to confidently execute transportation procurement and conduct more confident rate management.
Benefits of Embracing Freight Tech and Building an Automated Platform
A radically transparent brokerage understands the value of technology to improve transportation procurement and network optimization. And they apply automation to enable it. That translates into top benefits, including:
- Real-time, global, and integrated collaboration based on radical transparency that shows all details and enables drill-down functionality when things are happening.
- Consistent and reliable scalability by enabling ongoing process improvement based on data and metrics that are actionable and insightful.
- Accuracy to predict changes in the freight market and its impact on rates to know when to scale carrier contracts and boost engagement with other logistics service providers.
- Increased ability to manage by exception and automate back-office workflows, reducing confusion and streamlining freight execution.
More data in the network can further improve:
- Capacity procurement.
- Customer satisfaction.
- Overall productivity.
- Staff morale and experience.
With that in mind, let’s take another view. A review of outsourced 3PL logistics service providers found that on average, shippers report a transportation reduction of 13%, and with 42% of respondents to a Gartner survey reporting outsourcing in some fashion, it’s more important than ever to find the right systems and partners to keep costs under control. Consider these other benefits of using a digital freight brokerage:
- Avoiding ambiguity in communications.
- Creating and nurturing higher customer service levels.
- Boosting visibility to avoid confusion over ETA and schedules.
- Paying the right rate based on market conditions, not a random guess.
- Finding capacity whenever, wherever, and in whichever mode is needed, including intermodal or multimodal.
- Reducing, if not eliminating, driver complaints.
- Bolstering paid drive time for truckers.
- Reducing the amount of paperwork.
- Enabling instantaneous feedback and network re-optimization.
- Shortening the payment window.
There is, however, an irony within this issue. Outsourcing is usually about money, but according to Gartner, that’s not the driving force behind the increased use of outsourcing. It’s the need to increase the budget and support the continuously expanding complexity of logistics. And building a data-based automated platform is key to keeping the transportation network running and ensuring freight broker business continues to adapt and scale to meet changing consumer needs. It’s all about service and quality to find capacity and stay strategic throughout the full network scale and size.
Plus, with Frost & Sullivan predicting the growth of digital freight brokerages to amass $54.2 billion by 2025, it’s no surprise that more brokers are realizing they need a stronger and more robust tech stack to stay competitive.
Transparency and End-to-End Visibility Further Promotes Collaboration in the Freight Network
Managing the ebb and flow of freight broker business models ultimately comes down to accurate predictions and end-to-end visibility. According to Jake Dean of the Wisconsin School of Business, efficient transportation networks operate on the premise of producing and delivering large quantities of products at reliable and dependable intervals. This happens with essential goods and supplies that make up the bulk of the modern-day freight network.
Responsive transportation networks function on scalability and can adapt and shift productivity levels to account for the highs and lows of consumer demands. Another example can be seen when some items become more in-demand than others, and the supply chain shifts to accommodate those shifts.
That’s where a digital freight broker business can add even more value through transparency. By knowing everything and tracking all stages of the shipment lifecycle, it’s easier to handle what is happening and what needs to happen to achieve the best result. That inherently means:
- Keeping shareholders in the loop.
- Enhancing procurement across all geographies and locations.
- Ensuring visibility to stay informed.
- Using data to have insight into processes that can boost collaboration.
- Reoptimizing in-transit shipments to handle the demands of a volatile, complex supply chain.
- Managing the lifecycle of the shipment from the first step through the final mile.
Increased visibility should further drive value for the shipper’s supply chain network, including:
- Visibility into orders to ensure inventory replenishment is on track and avoids the risk of out-of-stocks.
- Accountability to resolve problems when they arise.
- Lowering the total cost of transportation
- Better visibility to make changes on the go regardless of where a shipment is currently at in its journey.
- Using data to account for market volatility.
- Planning bids based on the latest insights to avoid missteps and offer rates competitive with the market.
It’s not simply the act of positioning bids to get the lowest rate or ensuring a 100% acceptance rate. After all, above-average tender acceptance in markets with lower volatility would indicate a possible risk of overspend. It’s all about leveraging people and technology to stay informed and make the right decisions.
It is a hybrid combination of efficient-responsive approaches that drives all freight management decisions and helps secure success even during disruption and unpredictability. Working with a top-quality freight broker business can help supply chain teams and logistics managers collaborate and strengthen the entire network. Again, it tracks the need to increase transparency to promote more collaboration within the freight management network and allow for more reliable, stable, and long-term growth among carrier partnerships.
Freight Broker Business Partnerships Overcome Obstacles in Communication and Productivity
At the heart of any freight network lies the need for communication and productivity, and even still, many companies realize the burden of their challenges when things go wrong. Regardless, everyone needs to follow a few best practices to ensure they are approaching freight management from the right view:
- Communicate clearly.
- Listen to your customers and transportation network partners.
- Be honest.
- Know that timing is critical.
Without those four components, communications can and do fail. And where that failure occurs will set the standard for profitability and productivity within your freight network. Without that triad of communication, there is a significant risk. If one person, whether shipper, driver, or receiver, doesn’t know what’s happening, someone will be upset. Someone will make a mistake. And someone will be ready to complain and request a refund. But how could a failure like that result in changes to the entire process?
Let’s take a look at an example.
A failure in procurement could result in a miscommunication with the driver and a missed pickup. While that might not seem like a significant hurdle, consider that e-commerce comes with a high return rate. And if that item arrives late, its risk of being returned instantly increases.
Additionally, it’s not enough to just limit returns. Without a solid and easy returns policy, customers can and will go to your competitors, whether Amazon, Target, Walmart, or the like.
Problems could also arise:
- Within the typical invoice where a carrier goes back on promised pricing
- Where customer experiences are lacking.
- When carriers have trouble getting payment from shippers.
With all the chaos of today’s world, it’s more challenging than ever to manage logistics, and today’s shippers are not logisticians.
They are retailers, CPG companies, and other entities. Those companies are rightly focused on growing the business; they shouldn’t be bogged down by poor communications. Companies should collaborate and improve both accountability and transparency in their increasingly complex supply chain network. Forming a collaborative partnership with a tech-driven and radically transparent freight broker partner is critical to driving growth and success amid the constant threat of disruptions and obstacles.
And Another Consideration: Carriers Will Want to Work With Transparent and Tech-Driven Brokerages
Freight broker businesses must also be highly cognizant of how they will appear to carriers. The reality is that carriers may have reservations about working with some brokers for the following reasons:
- Untrustworthy or small brokers.
- Unclear payment terms.
- Additional payment processing trouble.
- Limited visibility into broker needs.
- Inconsistent volumes.
While those problems exist, a technology-rich and radically transparent brokerage can eliminate them. Using technology, brokers can be more specific about their real needs and how demands may change over time. Meanwhile, APIs and integration with established payment processors, such as HaulPay, will assuage worries over payment processing. And lastly, more technology gives credence to startup brokerages or those with a limited reputation.
Partner With Wicker Park Logistics to Leverage an Extensive Tech Stack-Driven Culture and Radically Transparent Freight Brokerage
Do not leave your transportation network and how your team operates to chance. It requires attention to detail, an unyielding demand for absolute transparency, and keen use of technology to know when and when not to intervene. It’s simply about figuring out the best way to handle each movement, each interaction, and each process to derive the best result. And since collaboration is the key to survival for the modern-day approach to capacity procurement, you’d better choose the right brokerage partner. There is simply too much on the line to not leverage technology and processes to generate real results. Contact Wicker Park Logistics to find out more today.