3 Must-Know Trends Transforming the Freight Industry
by David Letourneau, on Sep 17, 2019
The freight industry is becoming more efﬁcient and more technologically driven, in part, due to these 3 trends impacting freight operations!
As the freight industry continues to evolve, some signiﬁcant industry-changing trends are presenting themselves. Adapting your business to account for these trends is essential to create a sustainable and successful brokerage or freight operation in the digital age.
Many of these trends are based on the growing accessibility of useful tech while others are the product of a constantly evolving industry. They’re a result of the revolving nature of the freight industry.
Here are the top 3 trends impacting freight operations:
1. Artificial Intelligence
It’s impossible to discuss trends within freight operations without delving into AI. As useful data becomes more and more accessible, an increasing number of logistics companies are experimenting with AI – particularly how to maximize revenue, efﬁciency, and safety.
AI is the practice of taking enormous amounts of data, processing it, and determining patters that are exponentially useful for freight transportation operations. Simply put, AI is helping freight operators make sense of the massive amount of data suddenly available to them.
AI is being used in digital logistics programs help freight operations increase revenue, reduce costs, provide better customer services, and improve safety and compliance.
On the carrier side, AI increases ﬂeet utilization and can discover ways to increase fuel efﬁciency, therefore, increasing revenue. By producing a more streamlined, hassle-free experience, AI-powered operations deliver better customer service. And with proven monitoring techniques, AI helps to promote safe driving and compliance with regulations such as HOS restrictions, which can help improve freight matching success.
Digital brokers are using AI to digitize and optimize freight transportation including:
- Providing transparent market-driven pricing models
- Maximizing capacity utilization
- Enforcing safety guidelines and regulations
- Optimizing routing
- Matching the best carriers with the best shipments
Unless you are grossing around $150M in revenue, you typically won’t get enough value from developing your own AI-based technology. Fortunately, there are a variety of partnerships that can give you access to the latest technology.
The question is do you want to pay a large up-front fee for just the technology (plus add-ons and upgrades as needed) or would you prefer to pay a very small service fee to use the technology.
If you prefer to go the route of a low service fee, Carggo also provides operations management and support, which includes access to a large carrier network to guarantee capacity at no additional cost.
2. Working Remote
Working remotely is currently a huge trend in most industries with an increasing amount of companies allowing employees to work from home or work remotely on a regular basis. This trend is presenting signiﬁcant challenges to the freight industry.
Unlike most industries, having staff on-site is crucial to efﬁciently solving the day-to-day headaches in freight transportation, where instant communication is vital to securing capacity while maintaining proﬁtable margins. In peak seasons, it’s crucial to have reliable temporary staff to perform operations at high capacity.
The trend of working remote is making it more difﬁcult than ever to ﬁnd qualiﬁed logistics staff willing to trek to the ofﬁce each day. In areas that aren’t major transportation hubs, this is an even bigger issue.
With the help of digital fulﬁllment platforms such as Carggo, getting the operational support and ensuring freight coverage is simpliﬁed. Carggo can match your freight with a vast network of trusted carriers and efﬁcient logistics solutions so even in peak seasons, your operations will function at peak performance.
3. Re-Engineer Your Process for Variable Costs
According to a recent Sonar report, the 15.7% average brokerage margin that exists today is forecasted to drop to 10.6% over the next 10 years.
Unfortunately, most brokers can’t afford a 5% drop in margin. The good news is that the percentage of brokered loads is increasing. So, if you are positioned to take on more loads without increasing your ﬁxed costs, then you can still grow your bottom line.
That leads us into the topic of “variable costs” – costs that are only incurred when freight is actually moved. A good technology strategy should allow you to take advantage of opportunities to shift toward variable costs. This way your company can provide great service when it’s busy… and painlessly scale back during slower times.
Using advanced technology to re-engineer your processes, you can shift some ﬁxed costs into variable costs—that are ﬂexible and easily scale up during peak times and back during slower cycles.
One way digital brokers are turning ﬁxed costs into variable costs is by using technology that increases productivity and automate many of your processes—such as negotiating rates, procuring, onboarding, and tracking carriers, document collection, payment processing, and invoicing customers. Using technology to complete or assist with the completion of these tasks, will allow you to either decrease your ﬁxed costs or optimize your operations so your team to spend more time securing new business and less managing freight—thus, increasing your revenue potential.
Is your technology reducing your ﬁxed costs and/or freeing your team to focus on securing new customers and strengthening your relationship with existing customers? If not, you might want to ﬁnd better technology solutions.
Carggo’s digital freight fulﬁllment platform is designed to improve efﬁciencies, reduce ﬁxed costs, and use variable costs to cover more loads (or instantly scale back during off-peak times) and even integrates with your existing TMS. Get the technology, scale, and operations support you need – including access to Carggo’s network of trusted carriers – so you can grow your business faster by focusing on what you do best, developing and strengthening customer relationships.
By re-engineering your processes for variable costs using technology, you can operate more efﬁciently, reduce expenses, and run a more proﬁtable brokerage. Carggo makes it easy to take on more business while reducing your expenses – giving you the tech and support you need to guarantee capacity on most lanes at very competitive prices.