How to deal with the growing pains that come with changing technology – FreightWaves – Ashley Coker, Editor

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Technology is disrupting the logistics industry at a breakneck pace, and brokerages are not exempt from the changes. While new technologies are intended to help companies run smoother, the implementation process can be riddled with challenges.

Trucker Tools teamed with FreightWaves to host a webinar, “Don’t Get Left Behind in the Digital Brokerage Revolution: Strategies for Success,” addressing some of the key barriers to growth in today’s brokerages.

During the webinar, Trucker Tools Founder and CEO Prasad Gollapalli and Leonard’s Express Chief Marketing Officer Mike Riccio discussed how to overcome challenges and successfully integrate new technology into existing business models.

Gollapalli said the four common forces affecting third-party logistics companies (3PLs) across the industry are available truck capacity, freight volume, inefficiencies in processes and the technology-based brokers putting additional pressure on other players.

He believes implementing the right technology can help brokers wrangle those forces and become more efficient. For example, if brokers want to be competitive in today’s market, they have to provide visibility to their customers.

“Visibility has become a standard. Pretty much every shipper today requires visibility, so all the freight is being tracked,” Gollapalli said.

About 80 percent of loads are moved by owner-operators and small carriers, according to Gollapalli. These smaller companies make up the majority of the Trucker Tools customer base, allowing the company to gain valuable insights from the group.

“When we polled our customers, the same group of small carriers and owner-operators that make up most of the industry expressed how easy it is for them to adopt digital platforms, such as mobile apps, to book freight,” Gollapalli said. “This is the same group that, most of the time, has been behind in technology adoption.”

The results of Trucker Tools’ poll points to the overall trend of improved technology adoption throughout the industry. Companies, big and small, are more willing than ever to invest heavily in new technology to improve their operations.

When asked about the key barriers to growth for today’s brokers, Riccio talked about the speed of change in technology and the cost to implement the latest must-haves.

“There is so much data out there. It is like a firehose, and it is overwhelming trying to sift through that data and find what really is applicable to your shop or your operation,” Riccio said. “The cost to implement what you do decide is important, and it can be really expensive.”

Riccio also said the increasing focus on digital freight matching and automation technologies has made it more difficult to maintain working relationships between brokers and carriers.

“The relationship is more highly influenced by technology rather than just a pure relationship on a phone call, and it can be hard to adapt to that challenge,” Riccio said. “It is a double-edged sword. If you’re a smaller carrier, you can now use technology like the big carriers and survive, but one of the challenges is that it becomes very hard to build relationships.”

While technology can make the brokerage landscape feel more competitive, Riccio said he views technology as an opportunity to become more productive, and therefore more profitable. He said the key to utilizing technology instead of being bogged down by it is to find the technology products that complement your company’s existing culture and network instead of trying to force the company into a mismatched mold.

Utilizing the right products can help brokers combat persistent issues in the industry, including one-load wonders and dead-end phone calls. It can give brokers one destination for accurate, reliable data on truck availability, according to Gollapalli.

“Not having that accurate, real-time data [on truck availability] pinpointed to eliminate the noise is one of the biggest issues we’ve seen,” Gollapalli said. “The profits per load are being affected by this.”

Riccio said Leonard’s Express considers four key factors when deciding to bring on a new technology partner from outside the company – culture, history, personnel mix and adaptability.

“Culture is really what we look at first when we go outside,” Riccio said. “I know that sounds touchy-feely, but if you’re aligned with your vendor culturally, it is much easier to work through the hard stuff that comes up in any relationship.”

The potential partner’s personnel mix plays a role in the decision as well.

“We like to see a mix of technology people and industry people within a company’s shop,” Riccio said. “We think it is really important that the vendor we’re dealing with has some employees who have come from the brokerage industry or the trucking industry and have an understanding of some of the day-to-day challenges.”

Riccio also looks into the potential partner’s financial stability and history in the industry, even reaching out to the company’s other clients. He is looking for a company that is both established and flexible enough to adapt to Leonard’s Express’ specific needs.

When it is finally time to implement the new product or service, Riccio places an emphasis on training the employees that will be working with the product and listening to their feedback.

“Not only do we want to improve our bottom line and productivity, but we want to make their jobs easier,” he said. “If they believe in it, they’re going to help us make the product or the service successful.”

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