The Top Misperceptions About Intermodal Freight and the DrayNow Marketplace
The current manual methods that Intermodal Marketing Companies (IMCs) use to source and manage drayage moves to and from rail yards are not sustainable. The constant flow of emails and phone calls between brokers and drayage carriers makes the process time-consuming and expensive, and the data gathered is often inaccurate.
Today, digital solutions exist to automate these broker-carrier interactions and provide real-time status on container location and ETA. Yet many IMCs have been slow to embrace the marketplace model that DrayNow has introduced to the intermodal freight market – despite the massive efficiencies digital workflows can bring to IMC operations.
Why the hesitation? Part of it stems from misperceptions that linger about drayage carrier operations and the DrayNow Marketplace itself. The following are the top misperceptions we’ve observed.
Misperception #1: When drayage carriers say "yes," the load is covered
Carriers routinely accept load requests in advance despite the fact that, at the time of booking, the dispatcher has no knowledge of what equipment and drivers will be available when the load needs to be moved. This practice of overbooking often leads carriers to simply drop it all in the broker’s lap at the 11th hour claiming driver sickness or an equipment breakdown (carriers rarely admit to overbooking).
The broker must then scramble to cover these dropped loads, risking some significant downsides:
- Damaged relationship with shipper: Too many dropped loads and the shipper will look for a more reliable capacity source.
- Productivity drag: Freight broker productivity really suffers when you’re double-handling loads after a fall-off and initiating a whole new set of communications to draymen.
- Lower profit: If front line brokers are investing time to cover overbooked/dropped loads, they are handling fewer loads per day.
Solving the overbooking dilemma
To solve the overbooking dilemma, IMCs can source drayage capacity from a freight marketplace like DrayNow, which efficiently connects intermodal freight demand with capacity.
- Drayage rates are market-driven and fair, so drivers are less likely to fall off for a more profitable route.
- Carriers value the marketplace as an ongoing capacity source and want to maintain a solid reputation. Carriers with bad business practices are removed from the platform.
- If a fall-off should occur, for whatever reason, the load is reposted and typically accepted in around 8 minutes.
Whether it’s eBay, Airbnb or a marketplace for drayage capacity, marketplaces exist because they efficiently – and TRANSPARENTLY – connect supply and demand. That’s not the case with traditional methods of managing intermodal drayage moves, where promises of capacity are routinely made, then ignored.
Misperception #2: Your status updates from drayage carriers are real-time
The truth is that most “real time” updates on intermodal freight are educated guesses on both location and arrival time, despite the fact that technology exists to pinpoint the driver’s exact location and ETA with no need for phone calls, or any human involvement.
Here’s a typical scenario: a shipper calls an IMC to check on a critical inbound container; this broker calls the intermodal freight carrier, who then reaches out to the driver; the carrier calls the broker back with the update; finally, word gets back to the shipper that, “The driver left the terminal about 30 minutes ago and should be there in about an hour.”
In other words, “we don’t know.”
Solving the Status Update Dilemma
When IMCs use the DrayNow Marketplace to source and manage intermodal drayage shipments, the process is completely transparent. Drivers’ phones are loaded with the DrayNow app and location updates are automatically recorded every minute, with accuracy to within 5 meters.
In response to shipper status requests, brokers simply type a reference number into the DrayNow platform and can see the rail yard location, the destination location and the exact driver location, along with an accurate ETA estimate that, through integration with Google Maps, considers any traffic delays.
When it comes to shipment status reports, shippers’ needs are really quite straightforward. They want to know, “Where’s my shipment?” and, “When will it arrive?” And they want the information to be accurate.
If brokers don’t embrace technology that already exists to deliver this customer benefit, shippers will find others who will.
Misperception 3: Carrier reports on on-time performance are accurate
On-time performance reports from drayage carriers are, at best, inaccurate and, at worst, made up. The problem is that this data is self-reported. Here’s a real-world example of what can happen:
A major railroad maintains a portal where brokers and carriers are required to enter the time the driver arrived at/left the rail yard. If that time is after the agreed target time, the broker or carrier cannot proceed with the online update until they enter a reason for the lateness. After a while, it became common practice for late-arriving carriers to lie and enter a time before the target time to avoid the extra steps.
Examples like this are not uncommon. Yet brokers pass carrier-reported data on to their customers as if it’s gospel truth.
Solving the accurate reporting dilemma
The answer is to eliminate the need for self-reported data from carriers by using technology to track the driver’s location in real time. Weekly report cards from DrayNow to brokers detail the performance of drayage carriers sourced through the platform – and the numbers are 100% accurate. There is no self-reporting. Tracking technology makes reporting a totally transparent process.
Misperception #4: DrayNow is a load board for intermodal freight
Load boards provide brokers with a fast, efficient way to source well-priced freight capacity. DrayNow does indeed have all of these capabilities. But the similarity ends there.
Efficient sourcing is just one part of the overall freight management process. For intermodal drayage moves, IMCs obviously need to follow the freight through to delivery and manage all paperwork and billing. Unlike load boards, DrayNow facilitates this entire process. So, it is more than a simple load board for intermodal freight; it is a management platform for intermodal freight.
That’s a critical distinction.
When you think load board, think Match.com: It facilitates connections between people, but that’s where the service ends. If the couple decide to prolong the relationship, Match.com is not providing a platform to manage that relationship as it moves forward. The parties are on their own.
When you think DrayNow, think Airbnb: It brings homeowners and guests together, but facilitates the entiretransaction, from start to finish – booking, payment, owner/guest communication, post-stay reviews and ratings. Owners can dictate the terms of the stay (limit on number of guests, no dogs). Guests can negotiate different terms (lower price, later check-out time). It all happens quickly and efficiently on the platform, with little involvement from Airbnb personnel.
DrayNow’s platform adds value far beyond what IMCs would get from a simple load board, from providing real-time shipment status updates to setting and getting the most competitive price for a load. Read our article for a detailed load board vs. DrayNow comparison.
Load boards have their place, but today’s technology allows for so much more. By giving IMCs and drayage carriers a platform to meet and collaborate, DrayNow brings new levels of efficiency not just to freight matching, but the entire intermodal freight management process.
Misperception #5: DrayNow's intermodal freight marketplace can't work for consistent freight
The majority of intermodal drayage moves are handled under long-term contracts with specific carriers. It’s been that way for decades.
DrayNow is the first and only intermodal freight shipping marketplace. It allows IMCs to post a load to thousands of independent draymen simultaneously. IMCs that use the marketplace love the capacity and transparency it offers, but too many still view it as a solution only for fall-offs and other transactional freight.
That’s a mistake.
Freight brokers can use the incredible capacity of the DrayNow marketplace – 2,500 carriers and growing – to identify ideal carriers for steady contracted lanes. Using in-house experts, data and sophisticated freight-matching technology, DrayNow can find the best carriers and solutions for higher-volume, contracted lanes. These consistent dray moves are treated as guaranteed coverage that moves reliably at the expected times. And it’s done within the marketplace model, with carriers who have expressed an interest in handling regular freight in their preferred lanes.
DrayNow’s dynamic pricing model can even help get rates that are better than what you’ve already negotiated with a preferred carrier.
For example, let’s say you have a pick-up every day in Dallas and your price is $1,500. Because DrayNow has visibility to dray moves across hundreds of brokers, they are able to identify another broker that has a delivery every day to that same receiver. Your load represents ideal freight for that driver. By matching the pick-up with an existing street turn, you may be able to lock in this move at $1,000, saving $500 per move. That’s the efficiency of marketplaces at work – even for consistent freight.
Not all freight marketplaces seek to displace brokers
There’s one last misperception to tackle: that ALL freight marketplaces seek to displace traditional freight brokers by providing a platform for direct shipper-carrier collaboration. While that’s true for the most part, DrayNow is the exception. The platform, which is focused exclusively on intermodal freight, provides the tools to help IMCs and other freight brokers replace inefficient manual processes with simple, cloud-based workflows that enable seamless collaboration between IMCs and draymen.
Few doubt that IMCs must define a more technology-enabled future. But they must do so with a clear-eyed and accurate assessment of the current reality, and the go-forward options.
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