Some 28% of all miles driven by trucks in England are empty. ( Photo: Shutterstock )
The process of matching freight is complicated – with many parameters involved in exploring thousands of different possible combinations in real time and in identifying the best possible match to the parties involved. TGMatrix, a startup based out of Oxford in the United Kingdom, is working on creating an intermodal freight matching engine.
“We have designed a highly automated algorithm that works without manual involvement and connects the parties through the matching engine,” says Brian Bolam, founder of TGMatrix. “The engine optimizes the match to give the carrier the best rates and the shippers the lowest cost.”
Bolam contends that TGMatrix evolved as a reaction to the decades of frustration the founders had while working in the transportation logistics industry, buying and selling freight for major corporations. The freight hauling industry has been mired with slow adaptation rates, making it lag behind other industries with regard to technology adoption to improve efficiency.
What sets TGMatrix apart is its value proposition, where it tries targeting empty freight capacity inside the system. “Empty capacity is the reason shippers pay too much, and carriers can’t make a lot more money. Significant inefficiency exists in the industry due to lack of interconnectivity and visibility – we are tackling both these issues,” explains Bolam.
TGMatrix’s advanced matching engine allows it to integrate seamlessly with different data formats, on which Bolam has been working for over a decade while building EDI hubs. “We have produced visibility through our matching engine where we use very sophisticated micro-services to exactly match the requests from the shippers and carriers,” Bolam says.
Though complex algorithms are powering the matching engine, the user interface is quite simple to work with. TGMatrix works on an annual subscription model and does not take a stake in every transaction – this transparency and one-time fee option facilitate an open market and more matching opportunities for both the shippers and carriers, it believes.
TGMatrix’s story started out with the founders writing down three hundred pages of system specifications based on their observations in the freight industry. With grants sanctioned by the UK government, the startup rapidly built on its product and had its beta testing done by late 2016. Bolam is confident of TGMatrix’s product today and says it actually over-delivers on the promises the startup made to its customers.
Apart from working with freight matching, TGMatrix is looking to reduce emissions and carbon footprints across the industry by taking empty capacity off the road. “There are 28% [trucks with] empty capacity on the roads in UK compared to the 27% in the U.S. In Asia, the situation is even worse. In China, the numbers could be as high as 40%,” explains Bolam.
To make this possible, the startup asks truck companies in its user base to post their capacities on the Matrix platform. The companies mention different parameters like the number of trucks, the load it can carry, the speed of travel, the time of pickup or delivery, and the transit locations.
“Based on the requirements posted, we match the shippers to the carriers on the best possible combination. We normally ask the users to leave their requests on the system for at least half an hour, when our algorithms search for the match,” Bolam adds. “Even if the system gets a match early on, it holds it as an interim contract and does not send it out to the concerned party. It meanwhile continues searching for a match until the time the request expires on the system.”
If in the event of a better match, the initial match will be replaced by the new one. At the expiry of the request, the best match would be sent out to the relevant parties with an electronic contract between them.
Moving forward, Bolam hopes the industry opens up to technology adoption a lot more than in the past. “Everybody in the industry knows that the digital transformation of transportation is just around the corner and yet people are slow to buy into it. Finding customers is a drawn-out process and it is something that we need to work on and persuade people that this is the future.”
TGMatrix has been bootstrapping to date, but is looking to arrange for a VC funding round in the near future which would help take the business a notch higher and hopefully to breaking even. Bolam also plans to run a digital marketing campaign to educate the market on what is available and how the startup could transform trucking businesses by improving returns for carriers and reducing costs for shippers. TGMatrix is eyeing 40 million transactions by 2020 and is hoping to completely automate the process by that point in time.
Original Source: https://www.freightwaves.com/news/2017/10/26/tgmatrix-builds-a-freight-matching-engine