As freight brokerages look to leverage technologies, automate grunt work, and streamline operations, we hear references such as “Buying ‘digital freight matching’.” Unfortunately, this reference to ‘digital freight matching’ as a ‘product’ is too simplistic. Because every freight brokerage has a different mix of fulfillment opportunities, and each load opportunity has unique requirements, challenges, and execution models.
One-size fits all solutions do not exist; brokerages must apply technologies in a way that suits their unique fulfillment mix. This can result in deploying multiple digital freight matching methodologies for the different business fulfillment operations your freight brokerage may have. Clearly defining your strategic methodology will help assess the type of matching solution(s) you need, and identify which digital investments to make. In this post, we share:
- An analysis of three different fulfillment opportunities that our customers typically face: 1) consistent dedicated freight, 2) spot freight (pre-planned), and 3) hot spot freight (same-day).
- A simple framework to correctly identify, match, and engage the right carriers for each fulfillment opportunity.
- The expected individual load volume for each of these three different fulfillment opportunities.
- The matching methodologies needed to achieve optimal touch levels.
The goal of a digital freight matching strategy is to reduce touch points to help your freight brokerage improve your key business metrics of productivity, profitability, and engagement— assisting you to move your current and future freight better.
3-Steps to Define Your ‘Digital Freight Matching’ Methodology
For each type of fulfillment opportunity, answer these three questions in sequence:
- What kinds of carriers fit this mix? They could be in-network (carriers you have a relationship with), out-of-network (carriers you might want to bring in), or a combination of the two.
- What do those carriers need? This involves an understanding of 1) how to gather carriers’ preferred lanes, types of loads they haul, or even real-time capacity, and 2) how often you need to revolve your team’s understanding of those carriers.
- How do you notify them about freight opportunities? From calling to automated tender notifications, there is a wide spectrum of tools to help inform your carriers about available freight and inviting them to book those loads.
1) Consistent Freight
Consistent opportunities are loads you know are continuously coming. These loads have been contracted to a group of carriers for the season, or your team informally knows a consistent set of carriers to run a lane. As such, the carrier mix is typically comprised of the same set of in-network carriers— carriers you have done business with. You will also likely already know their preferred lane preferences, typical truck capacity, and equipment.
The ‘digital freight matching’ methodology for consistent freight is simple, especially if you have a Transport Management System (TMS) with up-to-date data about those in-network carriers, such as their seasonal freight needs. If you are a freight brokerage with a high proportion of ‘consistent freight,’ you should implement your TMS’s waterfall tendering feature.
Waterfall tendering is a single-file approach where a single carrier is invited to digitally accept the load within a small waiting period (typically thirty minutes). If the carrier can do it, then the load is booked. If they can’t do it, your TMS moves to engage the next carrier in line until all options are exhausted (thereafter the freight transitions to become a spot load). This is a fast, no touch approach to invite in-network carriers to accept loads.
Waterfall tendering works exceptionally well for digitally assessing your in-network carrier-options that have strong relationships with your team, inviting those carriers to book loads, and having them commit. A dedicated carrier sales rep (or broker) can tend to about 100-150 of these loads per day per person.
However, there is an overlooked risk you must manage as part of this digital freight matching strategy. While your team may be executing freight like a factory line, your operations are more dependent on a core set of carriers, placing all your eggs in one basket. This can result in over-dependence on those carriers, introducing risks that can cause harm or inhibit growth for your business:
- What happens when one of those core carriers goes out of business?
- What carriers aren’t you doing business with to grow and strengthen your network?
Therefore, we recommend diversifying your carrier base by reserving a fraction of your consistent freight (e.g. 20%) to transition to spot immediately. This will help minimize risk while also expanding your market presence with carriers.
(Note: If your TMS does not have up-to-date data about your in-network carriers, you need a system that can capture, clean, and maintain all that data.)
2) Spot Freight (Non-Same Day)
We see spot freight fall into two different buckets: non-same day bookings versus same-day bookings. We identify specific freight matching strategies that can address the non-same day spot freight category. This carrier mix is typically comprised of both in-network carriers and out-of-network carriers (new carriers or rarely used carriers).
Although most freight brokerages are pushing to fulfill these opportunities with in-network carriers, most brokerages are still relying on out-of-network carriers. Why? Because most brokerages do not know on a daily or weekly basis, what the needs are of these in-network carriers. As a result, in-network carriers are often underutilized.
Furthermore, most brokerages do not have a system of intelligence to determine what those carriers need. To identify those needs, you need a system that analyzes and synthesizes large volumes of carrier data such as; lane preferences, truck capacity emails, historical load data, and real-time location data— we call it carrier intelligence.
The goals of a digital freight matching methodology for this non-same day scenario is to 1) increase carrier engagement at scale, and 2) drive higher operational load count.
We believe a ‘digital freight matching’ methodology for non-same day spot loads follows these guidelines:
- Commit to more of your customers’ loads earlier, thereby giving your team more time to find the right carriers.
- Understand current and future in-network capacity better (especially the newer in-network carriers). You will need pricing and capacity tools to assess these in real-time.
- Engage with these in-network carriers at scale.
This will require a mixture of high touch and low touch. A dedicated carrier sales rep (or broker) can tend to about 10-30 of these non-same day spot freight loads per day. With the right tools, this strategic methodology can help push these opportunities more in-network utilization, and help qualify carriers who might fit the consistent freight model, reducing the required touch level to move the load.
3) Same-Day ‘Hot’ Spot Freight
The last category of freight fulfillment are loads that need to be covered on the same day that they need to be moved. As such, the carrier mix is typically entirely out-of-network carriers because brokerages can’t quickly notify, engage, and secure internal in-network carriers.
Traditional freight brokerages typically source these carriers by sifting through hundreds of emails and resort to looking for carriers on load boards— grunt work that eats up much of a broker’s time. A dedicated carrier sales rep operating in this mode (or broker) can tend to about 5-12 loads per day.
The goal of a digital freight matching methodology in this category is two folds: (1) to minimize same-day bookings and (2) to find new carriers quickly. We think brokers can successfully execute a ‘digital freight matching’ methodology for hot spot loads by:
- Identifying and storing the reason for these same-day spot bookings. For example, these problems might be created by carrier cancellations.
- Integrating your TMS with your primary load board to automatically post this type of freight and pull trucks.
- Digitally vetting and on-boarding new carriers.
- Pushing for advance bookings (non-same day spot freight).
This fulfillment model is the most time-consuming activity for your team to operate on. Engagement often requires a call with these carriers because you need to find a truck for your customer quickly— there is little room to move.
The best way to operate ‘hot’ spot loads is to adopt digital strategies that minimize them in the first place. When you shift towards more pre-planned (non-same day) and in-network carriers, you reduce the amount of touch required by your team because of the established trust you have with them. This is in contrast to new carriers who you need to talk with to gain their trust and confidence.
With this methodology, we have seen a shift in our customers’ fulfillment mix; creating more non-same day opportunities and reducing the risks posed by same-day hot loads.
Remember: ‘digital freight matching’ is a strategic methodology, not a product. Brokerages must harness a knowledge base of thousands of carriers to make better (and bolder) decisions faster, confidently, more reliably, and at scale. Doing so will empower your brokerage to better engage with your carrier network, delivered targeted engagement, and strengthen carrier relationships.