Loadsmart’s co-founder and CEO Ricardo Salgado recently joined a group of industry experts to discuss the evolving landscape for logistic service providers with the editors at SupplyChainBrain.
View excerpts from their conversation below or watch the talk in its entirety here.
The role of the freight broker is evolving and will continue to evolve. It’s about adopting technology and using it to make [services] much more powerful and easier [to access]. Consumers are requesting better pricing and more visibility. In order to do that, we need that underlying technology.
When you’re asking a shipper to trust you with its $75,000 worth of cargo, and it’s going to cost you $1,300 to get on your platform, that’s a different sell than an Uber giving you a $25 promo code to try its [service]. The adoption curve is a bit different. But you’re seeing also a generational shift. This is the first year that we’ll have more Millennials than Baby Boomers. You’re starting to see people who are more comfortable in sharing their car, or their information online. They’re more comfortable with the underlying technology and taking a more of a calculated risk.
Things are changing a lot in the trucking industry. Technology startups have flocked to tackle big and small problems in the supply chain. Venture capital funds are backing different solutions excited about the size of the market and historical inefficiencies. Meanwhile, traditional players are pledging hundreds of millions of dollars to improve existing processes to avoid being dethroned.
Surprisingly, very little has changed in the actual movement of freight, at least in outward appearance. There are a number of reasons for this, but chief among them is the industry’s complexity, which together with historical distrust of technology has lengthened the adoption cycle of new features among more traditional players. And where technology has in fact been adopted, it’s impact has been undercut by the sheer size and fragmentation of the industry; technology is only materially felt once a substantial number of players adopts it.
But timid technology penetration and slow adoption should not discredit or downplay the impact that technology and automation will have, playing a fundamental role in shaping the future of the trucking and freight brokerage industry. And what’s coming is really exciting.
Alibaba’s co-founder Joe Tsai discusses logistics challenges with Loadsmart’s co-founder Felipe Capella at a recent Sullivan & Cromwell alumni reception in New York
There is a clear downturn tendency in freight brokerage margins. As they continue to shrink, the historical value proposition of freight brokers—selling and pricing each load and finding its truck—will decline heavily. Soon, brokers won’t need thousands of employees to power their operations; instead, new technologies like machine learning and artificial intelligence, ubiquitous data sharing, more secure and available chain of ownership (ie via blockchain technology) and real-time, over-the-air telematics will serve as potent force multipliers. All of this will dramatically reduce the actual cost of brokering freight and increase consolidation of small- and medium-sized brokers.
In the long run, things will change more dramatically. Several states will clear autonomous trucks for specific lanes (hub-to-hub). Carrier operational costs will drop significantly and drivers may move from carrier-based to warehouse-based. Huge consolidation on the carrier side will probably follow. Small companies will likely struggle to compete in this new environment, displaced, swallowed up, or put out of business by large enterprises with massive fleets of autonomous vehicles, where few carriers will be moving a very large portion of the total FTL shipments. The exact role original equipment manufacturers (OEMs) will play in creating this new trucking reality is, for the moment, less clear, but it will likely be important as they too want to become software and service providers. Some big enterprises shippers will end up running their own autonomous trucks fleet, but most companies will rely on third party autonomous truck providers.
oTMS’s co-founder Mirek Dabrowski (far right) and VP of Services Adam Davis (far left) during a recent visit to Loadsmart from Shanghai
Of course, down the road, brokers as we currently know them will all but disappear, crippled by the continued advance of technology and growing use of automation across the industry, which only debase a broker’s value as they become more popular, lowering or removing thresholds that were once gatekeepers. Once this happens, the age of logistics technology platforms will truly begin.
Loadsmart is positioning itself for this upcoming future: a future based on data, artificial intelligence, and automation of load movements. We have nurtured good relationships with logistics players across Asia, Europe, Latin and North America, and are sharing knowledge with these trusted partners to transform the logistics business.
Felipe Capella is co-founder and Chief of Product at Loadsmart
Earlier this week, the American Business Awards (ABA) awarded Loadsmart a Bronze Stevie® Award for Most Innovative Tech Company of the Year for 2017. We are, at once, both proud and humbled by the recognition.
When we started Loadsmart just a few short years ago, it was clear to us that the status quo in trucking and logistics was not just broken, but becoming increasingly untenable in our ever-more-connected world. We knew there had to be a better, more open, more efficient, and even more human, way to move freight around the world.
Since then, milestones like our first fully automated truckload shipment have only strengthened our convictions about the transformative power of technology and it’s capacity to revolutionize freight brokerage and trucking (and, on a longer timeline, the entire logistics industry). Of course, this is only the beginning and we remain focused on developing solutions that create exponentially better businesses across the supply chain.
We’re always seeking the best talent to join our growing team to tackle big challenges and make an impact. Visit our career site to learn more about the opportunities we’re hiring for.
“This is too big of an issue to ignore, and an important investment that we’re making as a company and as people,” explains co-founder and Chief Product Officer Felipe Capella.
Not just about “doing good” or “giving back,” the trucking industry is very much on the frontline in the fight against human trafficking, having become one of the larger demographics of callers to the hotline in recent years.
To learn more about how Loadsmart is working to help break the cycle of sex trafficking, check out our previous post or email us.
The new Human Trafficking Tipline feature added to Loadsmart’s Driver app.
Last Wednesday, in an urgent and moving testimony before the Senate Foreign Relations Committee on “Ending Modern Slavery,” actor and tech investor Ashton Kutcher pressed the importance of using technology in the fight against human trafficking. Citing the significant impact a suite of web-based tools developed by Thor, a company co-founded and chaired by Kutcher, has had on rescuing victims, the actor called on U.S. legislators to direct further funding for the development of additional products and technologies to help combat modern slavery.
We couldn’t have argued it better ourselves.
We are firm believers in the transformative power of technology (we are a technology company after all) and its capacity to change the world for the better. In fact, this simple belief powers pretty much everything we do: fundamental to all our efforts is the creation of abundant value—for our immediate customers, yes, but also for individuals and businesses across the supply chain and beyond too. That’s also why in recent months, we’ve focused on identifying ways we can leverage our data, technology, and industry partnerships to help bring an end to human exploitation and sex trafficking.
That human trafficking affects nearly every country, in nearly every geography, is sublime in the darkest sense of the word, a clear affront to our common humanity. No wonder the UN calls it the crime that “shames us all.” And yet trafficking in persons remains staggeringly persistent, at once both nearer and more common than most realize. Victimizing nearly 21 million women, men, and children around the world, this modern-day form of slavery is the second-largest illicit industry behind drugs, generating an estimated $150 billion in illegal profits annually. At home in the US, trafficking takes place in towns and cities in all 50 states and places nearly 300,000 children at risk each year.
For everyone at Loadsmart, the moral imperative couldn’t be clearer: “We take our impact seriously and we’re dedicated to working for the common good and doing what’s right, in addition to being deeply passionate about building transformative technology for logistics,” explains our Chief Commercial Officer Diego Urrutia. Urrutia’s proximity to human trafficking is particularly personal: his wife, Kristin Pisarcik, was part of the award-winning team of journalists at ABC News that broke the story about America’s domestic sex trafficking issue and spent half a decade reporting on victims of the crime and local and national efforts to stamp out the issue.
What We’re Doing to Help
Current efforts, like the software developed by Kutcher’s Thor, demonstrate technology’s potential as a force for good and its power to disrupt human trafficking. Learning from and building upon these successes, our engineers are hard at work exploring and developing new features and tools to add to our products that will aid the cause. Currently, and notably, we are iterating through an update to our mobile driver app that will allow truckers to instantly connect with The National Human Trafficking Hotline to quickly provide tips, seek services, request help, or alert authorities—all without leaving our app.
We’ve also recently teamed up with Truckers Against Trafficking (TAT) to help educate, equip, empower, and mobilize our partners—shippers, carriers, and drivers—to
combat domestic human trafficking. Since 2009, TAT has worked tirelessly to rally America’s 3.4 million truck drivers and members of the trucking industry to prevent human trafficking on US highways.
As the eyes and ears of the nation’s roads, tuckers have proved to be effective allies in the effort to halt trafficking. With the help of TAT, members of the trucking industry have become one of the fastest growing demographics of callers to the National Human Trafficking Resource Center in the country, generating 503 cases of sex trafficking involving some 1098 victims.
We are proud to support TAT’s impactful work to combat this crime and look forward to partnering with others in the industry as we put the brakes on child sexual exploitation and human trafficking.
— Gordon Bottomley
Update: March 1, 2017 This post has been updated to reflect new data released on the number of sex trafficking cases and victims reported to the National Human TraffickingResource Center by members of the trucking industry.
WATCH: Ashton Kutcher delivers his opening statement before the Senate Foreign Relations Committee on ending modern slavery and human trafficking.
We are proud to work with our Shipper partners to improve the platform via technology, data and machine learning. The result is better speed, efficiency and shipment cost. In Q4 2016, Safeway/Albertsons’ usage of Loadsmart has grown more than 100% month over month. Anheuser-Busch is the latest retail giant to join the platform.
Loadsmart’s technology enables the adoption of modern and more sophisticated supply chain management strategies. This “just-in-time” approach directly contributes to lean production and cost reduction, as well as making its operations more efficient and responsive to customers.
“We are true believers in creating shared value. We currently provide shippers instant bookable spot pricing for their truckload shipments, and we address carriers by offering them relevant business. We invest heavily in our proprietary carrier sourcing algorithm, and our aim is to provide the most suitable and targeted load for every carrier we work with. It has to be a win-win situation for both shippers and carriers,” said Diego Urrutia, Chief Commercial Officer of Loadsmart.
We continue to expand our team with a focus on data science, engineering and design, to build not incremental features but truly transformation solutions for the industry.
Loadsmart featured in Frost & Sullivan report on startups disrupting the global connected truck market. After creating an exhaustive list of startups in the global connected truck market, Frost & Sullivan compiled research on a list of the top 20 performing companies—and Loadsmart is one of the companies that is included in this carefully curated list.
The study features startups from all over the world, and includes fleet management solutions, digital freight brokering, video safety and autonomous trucks as the major markets considered for analysis.
As the report mentions, this industry presents a $245 billion opportunity, with startups creating a 20 to 30 percent reduction in R&D spending as well as three to five years of reduction in time-to-market. And with more than 35 million trucks globally being connected by 2020, it’s more imperative than ever to continue to disrupt the freight industry.
The inclusion in this report comes after we announced our Quote & Book API for full truckloads shipments. Thanks to our team, we are now able to experiment, develop and launch products faster and more efficiently.
Our goal is to rethink the way a truckload shipment is booked, how a carrier is sourced and how the freight gets moved—and this report is proof of the desire for disruption in an otherwise incumbent, traditional industry.
We are announcing today the launching of our Truckload Quote & Book API (beta). The API will allow third party companies to leverage Loadsmarts’ unique instant pricing/booking feature inside their own platforms. That means that companies developing enterprise softwares could allow their users to check with one click real-time truckload shipping prices without leaving their platforms. And if they like the quote? They can go ahead and book a 53’ long truckload instantly.
That should streamline the process of reaching out to brokers, getting quotes, exchanging information and producing documents to secure capacity for a FTL shipment.
You should take advantage of our Truckload Quoting API when:
Companies use your software to manage their day-to-day business. You want to facilitate their lives including truckload shipping automation (quoting and booking a truck on your platform).
Companies use your website to quote and book logistics services like LTL. You want to provide a full online experience for FTL as well.
You are neither of the above, but you are looking to complement your solution allowing your clients to quote a full truckload shipment without leaving your platform.
The new API will help Loadsmart distribute its FTL product to a big number of shippers without relying on human salesforce.
This and other new features are a product of our expansion on engineering, data science and design teams. We are now able to experiment, develop and launch products faster and more efficiently. Besides developing new transformational features, team is also focusing on improving our pricing and sourcing algorithms, building integrations with different partners and automating even more operational tasks.
Our goal is to completely rethink the way a truckload shipment is booked, how a carrier is sourced and how the freight gets moved.
We are very excited about being part of an industry that will rapidly change in the upcoming months and years. Loadsmart’s instant pricing and booking will push the industry to start adopting similar solutions; cloud software services for carriers will be bundled together into a more robust and comprehensive offering for the benefit of underserved small and medium-sized carriers; API integrations are substituting EDIs; autonomous trucks are arriving soon.
In practice is means streamlined booking and on-time trucks for shippers; better loads, comprehensive cloud solutions and loading and unloading efficiency for carriers; visibility and predictability for warehouses. We can’t wait to bring it on.
Interested in integrating? Email us at api@loadsmart.com.
Loadsmart has just moved its first fully automated shipment from booking to delivery: no human contact occurred between Loadsmart, the shipper, the carrier or the driver. First, the shipper hopped online and quoted the cost to ship on a 53’ dry van truck from Philadelphia, PA to Virginia Beach, VA. The system generated an instant price ($ 565.62 at the time) and the customer booked in just a few seconds. Through an algorithm our system automatically identified the best carrier to move the load – among thousands in our roster – and sent an electronic request to the carrier’s dispatcher (which we internally call a “live job”) with an offer at $525.00.
With one click the dispatcher accepted the job electronically and the rate confirmation was distributed automatically. The carrier’s driver was notified and downloaded the Loadsmart app. GPS tracking and driver updates followed from pickup to delivery, where the driver submitted the Proof of Delivery via the Loadsmart mobile app.
Loadsmart made no calls, wrote no emails and had no human contact with the shipper, carrier or driver. No sales or operation workforce was needed to capture the margin of $40.62.
This is a huge landmark in Loadsmart’s history. It demonstrates that technology can and will have a big impact on the industry. If you have read our previous posts about the fair skepticism about so-called “uber for trucking” startups, you know where we stand: Loadsmart is not your usual “tech broker”. We are a technology firm: an engineering and design-driven company that is researching, prototyping and building transformative technology for logistics. We are not focused on incremental changes; we have created a tech lab to re-imagine the whole truckload shipping flow – from booking to delivery.
Each of the automated steps described above contain a multitude of potential issues that had to be dealt with. For example, for a first-time driver to download the app in the Google or Apple store, without being contacted or trained by us, it took a huge amount of UX/UI design, feedback and iteration. We also have a a 24/7 operations team monitoring all shipments and ready to take over.
Loadsmart is still learning, tweaking and improving its system to make full truckload shipping seamless for both shippers and carriers. But this event tells us that we are in the right path.
We got here with a cohesive team by keeping focus and obsessing about transformative technology. This is just the beginning.
In the past couple of years several companies labeled either by themselves or by the press as “Uber for Trucking” have launched their products claiming to revolutionize the trucking and freight brokerage industry. Millions of dollars were poured into these start-ups by eager Venture Capitalists that saw the huge size of the market and the historical lack of technology as a good opportunity.
It is surely too soon for a broad diagnosis on whether these investments will bear the aggressive return that VCs usually expect. But it is time to recognize that things did not go according to plan for many of these companies. What happened? Are Uber-for-Trucking startups stalling?
Keychain logistics went off the air around February (although apparently their site is back up). Cargomatic sacked both the CEO and COO after laying off half their salesforce. There are unconfirmed reports of layoffs in other start-ups, mainly sales and operations departments. What happened?
To grasp the challenges of the new entrants, you have to understand how start-up funding works. In order to justify a sizable investment, companies promise a new and better technology-driven product and an aggressive growth rate in order to justify an ever higher valuation.
But what happens when companies overestimate the power of their technology and underestimate the market dynamics all while under pressure by unrealistic burn rates? They face two options: (1) fail or (2) focus on growth-at-all-costs in order to justify the next funding round.
When companies survive this scenario by focusing on growth they end up becoming what they had promised to disrupt: a traditional freight broker with 2/3 of their personnel composed of a sales force and an engineering team purely focused on maintaining the system with no bandwidth to work on innovation.
At Loadsmart we try our best to avoid this mistake. We are 100% focused on product-market-fit, which we define as a product that is ten times better than the current market solution. Half of our team is composed by engineers and designers. And we understand that introducing technology and automation into this industry is a marathon, not a sprint – and we plan accordingly.
Before entering “growth mode”, start-ups should focus on building transformative technology, not incremental features. That’s what Loadsmart is doing.
Felipe Capella is co-founder of Loadsmart and Chief Product Officer
We’ve also recently teamed up with 