Freight for even the smallest of carriers
Where’s my truck? That one simple question has spawned billions of dollars of FreightTech investments to give shippers the supply chain visibility they crave. But there’s a downstream benefit of this visibility that will deliver impacts far more profound and lasting than the technology itself.
Today, hundreds of thousands of independent owner-operators can use simple mobile technology to stay connected while en route, sending constant updates on their location and ETA. While that sounds simple in 2020 terms, it’s a capability that this segment of the carrier community has never seen. It’s giving them newfound power and turning them into a force that will fundamentally change the freight industry as we know it.
Major technology investments for trucks, like Qualcomm installations, have been made primarily by large carriers. But here’s the thing. Larger carriers of six trucks or more account for less than 10% of the country’s 890,000 for-hire carriers.
Independent owner operators are hauling most of America’s loads on the first and last mile. These drivers have never made those same investments and, therefore, have been unable to provide visibility to their in-motion freight.
The rise of freight marketplaces like Uber, Convoy and Cargomatic have put the power in the driver’s hands – literally. Using phone based apps, drivers’ GPS coordinates are tracked in real time. The same apps make it easy for drivers to find freight, and for freight to find them. Automated work processes are transforming the freight management process, reducing hours of frustrating phone calls and paper transfers to mere minutes and the touch of a few buttons.
Technology is empowering single-truck carriers to compete on a level playing field with the 300-truck carrier.
The change is well underway in over-the-road (OTR) freight, and is starting to gain real traction in intermodal freight, where DrayNow is the first digital marketplace for drayage moves to and from rail yards.
Intermodal marketing companies (IMCs) and other brokers have largely ignored smaller owner-operators as a capacity source. They didn’t know how to find them, and it’s painful to bring on this type of new carrier if they are managed using the same old-school carrier communication methods, like phone calls, emails and faxes. When you’ve got this kind of process variability, adding hundreds of owner-operators to a broker’s carrier list is really unthinkable.
That’s the beauty of the marketplace model. Each carrier adheres to the exact same automated workflows. So, to a broker, dealing with 200 new carriers through the marketplace is the same effort as dealing with just one new carrier.
Marketplaces give IMCs and other brokers the ability to easily and efficiently tap into independent drayage drivers as a capacity source. That ability is game-changing for brokers in a number of ways.
Add new capacity, even as the supply of drivers shrinks
The freight industry’s biggest challenge is recruiting and holding on to drivers. If you’re not thinking about ways to overcome this challenge, you better start soon. Again, 91% of all for-hire carriers are 6 trucks or less. More and more of these carriers are being drawn to intermodal to increase home time and gain the ability, through DrayNow, to choose loads that make the most sense for their businesses and lifestyles.
Drive rates down
Marketplaces are pretty simple. They connect supply with demand, and prices are impacted by any imbalance between the two. When technology helps bring more supply to the table, in the form of owner-operators, it has a commoditizing effect on freight rates and you pay less.
There’s an irony to this benefit. Your regular drayage partners may be large, more “sophisticated” carriers, yet when it comes to simple everyday tasks like getting a status update or accessing a shipping document, their processes are archaic. IMCs spend hours on the phone and on email chasing carriers for data and documents. When you contract with an independent trucker through the DrayNow Marketplace, real-time status updates are always available and shipping documents are uploaded to the app as soon as steps in the load are hit. Welcome timely and accurate shipping data; goodbye mind-numbing grunt work.
Added benefit: you speed cash flow since you no longer have to wait for carriers to send shipping documents to trigger billing.
Are you going to get better service at the big box retail chain or the local specialty store in your town where the owner is on-site managing the business?
The same logic applies to trucking companies. Company drivers are simply not as invested in service excellence as owner/operators, who understand that timely, orderly deliveries result in better marketplace ratings, more business, and a good livelihood. Your shipping customers will appreciate this reliability, especially when it comes with full visibility and control during the first and last mile.
What Does All of This Mean for Intermodal Freight and IMCs?
Much of the media buzz about freight marketplaces has centered around directly connecting shippers with carriers, effectively eliminating the freight management (broker) layer.
But marketplaces don’t have to replace the broker; they can actually remake the broker.
We are seeing that play out in intermodal freight as IMCs use DrayNow not only to source reliable drayage capacity, but to efficiently manage the entire process – from booking to billing – using DrayNow’s digital workflows.
Ten or 15 years ago, many questioned the ability of the independent trucker to survive. Regulator demand for costly equipment investments in ELDs and carbon-reducing devices… volatile freight demand and fuel rates… slow payment collection… It all challenged the staying power of cash-strapped truckers with unpredictable cash flows.
In intermodal, specifically, the democratization of freight through the marketplace model brings IMCs a vibrant new source of capacity. At the same time, it brings unprecedented visibility to the first and last mile – something shippers desperately want, and something that IMCs have not been able to provide – until now.
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