Digital networks between trusted partners will make freight procurement automatic and proactive, according to Noam Frankel, who launched a pioneering freight brokerage American Backhaulers and now is CEO of FreightFriend.
“Finding trucks is still too labor intensive,” Frankel tells FreightWaves. “The stage is set for digital freight capacity exchanges.”
Throughout his logistics career, Frankel developed and implemented operational processes for building collaborative relationships with asset trucking companies, gathering data on their needs, and developing freight matching technology to improve efficiency in the marketplace.
Even in today’s technology advanced environment, matching freight with capacity, particularly in the spot market, remains a labor-intensive process. Regardless of technology, the transportation industry is still built on relationships. The critical nature, value, and pace of the service they provide requires trusted partnerships.
Carriers, shippers and 3PLs choose to work with, and ultimately will only share information with, companies they trust. Private load boards shared by email, through company websites or bid boards can connect partners directly, but their one-to-one nature limits their efficiency and usage by carriers. While public load boards have always provided excellent technology, their public nature limits participation, according to Frankel.
“Uber for Freight” companies have marketed digital freight matching technology to their clients but offer it as a brokerage service, while the larger freight brokers and 3PLs are rolling out comparable technology with the experience, manpower and relationships to offer better execution. To a driver, is one company’s phone app really better than another’s when it only provides access to that one company’s freight? Not really.
FreightFriend makes it easy to integrate with your existing transportation management system (TMS), fleet management or brokerage technology, including full system integration with MercuryGate. Brokers, 3PLs and shippers can pull loads into FreightFriend from their TMS or brokerage software in a variety of ways from FTP file transfer to Excel import to Post Everywhere. Carriers can import truck capacity via FTP file transfer or Excel import.
“We now have mobile devices inside trucks collecting a wide variety of data on drivers and equipment, with industry adoption accelerated by ELD requirements,” says Frankel. “Stage One has focused on freight tracking and visibility. Now companies can begin applying that data to capacity utilization and freight matching. And soon we will start utilizing historical data for predictive analytics and strategic sourcing.”
“The most advanced systems incorporate weather, traffic, hours of service and engine diagnostics into estimating arrival times,” Frankel says. “They also know what restaurant a driver visits every Wednesday, and the traffic lanes that truck drives regularly.”
Through integrations across the supply chain that data can be communicated in real time directly to TMS, FMS and WMS systems, and software providers who offer added value such as matching freight with available capacity.
While more proprietary data is getting collected, privacy concerns are emerging. How protective will carriers get about who has access to their data, and how much more selective will they be about who they choose to share it with?
The stage is set for digital freight matching services to offer connectivity between shippers, carriers and logistics companies in a collaborative rather than competitive environment. “I call these Collaborative Capacity Exchanges,” says Frankel, in a presentation at the TIA 2018 conference in Palm Springs.
There are certain requirements for a true Collaborative Capacity Exchange. Frankel says it should be “technology agnostic,” able to connect transportation companies regardless what platform they are on. It must integrate data coming from a wide variety of platforms and return results back to them. It should provide participants control over who has access to their data. This is critical because true collaboration requires trust and choice on who you want to play with. Also, to drive efficiency and usage, it needs to be a centralized solution, allowing shippers and carriers to connect with all their partners from one place, and identifying matches from aggregated data.
“At FreightFriend we utilize a mutually approved friendship model, a la LinkedIn to create such a private but centralized environment,” says Frankel. “A true Collaborative Capacity Exchange should sell technology services to freight companies rather than try and steal their customers and drivers.”