At Loadsmart, our strongest asset is our people. Just like the supply chain, it takes a lot of people with different expertise across many areas of logistics, transportation, and technology to keep our business running and delivering value to our carrier and shipper customers in existing and new ways.
We are committed to creating a more transparent logistics industry, and this means sharing our expertise. Not just through the products that break down the barriers between players in the supply chain, but also by sharing the wealth of experience that our subject matter experts have gained these last seven years and continue to develop each day. This is Learn With Loadsmart.
Building a Trustworthy Freight Marketplace: Quality Assurance, with Zach Fredericks, Group Product Manager, Loadsmart
This is the first post in a three part series about building a modern freight marketplace.
Quality, Connectivity, and Transparency
Over the last few years, tech buzzwords have followed private equity funding into logistics and are now inextricable from most logistics messaging, proliferating across industry news sites and providers websites; none is more visible than “marketplace.” The great marketplaces that have forever changed our personal lives, giving us direct and, in many cases, instantaneous access to what we need and want has slowly permeated into our work lives. What if we could find what we need in our supply chains as easily as we find tools on The Home Depot website? Why can’t carriers find loads the way we find groceries on Amazon?
Some of these buzzwords like marketplace, however, are premature, and don’t reflect how logistics operates today. The logistics world at large does not operate as a marketplace. How do we know? Because brokers and other intermediaries still dominate the industry, making it harder for shippers and carriers to directly interact. There’s no room for this in the freight marketplace, and yet today freight brokerage claims 19% of the freight market. In other words, today brokers are the marketplace, and they’re opaque; shippers and carriers alike will say brokers cannot be trusted. Shippers think they are getting overcharged and carriers think they are getting squeezed.
The appearance of the word marketplace is not without cause though. Much of the work we are doing at Loadsmart is about creating this connection. So, how do we actually enable a true freight marketplace? At Loadsmart we believe a marketplace must create trust. In our view, there are multiple ways to establish trust between shippers and carriers. The first and perhaps most important is establishing quality assurance.
When we build a way to quantify service quality in freight, we can facilitate introductions between shippers and carriers that have never worked together before. We believe this is a critical piece of a direct transaction between the two sides..
In December, our product, design and engineering teams paused their normal development cycle and descended on Florianopolis, Brazil, for the 7th Loadsmart Hackathon. An exercise like this allowed us to accelerate ideas we think can truly make a difference for our customers. The project my team worked on was “K-Rating,” named for our growing Truck Management Platform, Kamion. It’s based simply on the idea that you would never book an Airbnb with a 1-star host rating. When you book an Airbnb you see exactly how many stars the host has. Furthermore, hosts with 5-star ratings will be rewarded with more bookings for their high quality services. At the moment, there is no benchmark for trucking performance and as a result, there are very few cases where shippers and carriers are introduced to each other.
Kamion makes a standard rating system possible in trucking. Carriers’ everyday use of Kamion allows them to capture and track all of their performance data (on-time delivery, tender acceptance, etc) in one place. We will soon offer Kamion carriers the option to bid directly on shipper freight – in most cases, from shippers who they have never worked with before. We will give carriers the ability to show new potential customers a standard K-Rating to promote their history of quality service. We believe that this will give shippers the confidence to work directly with new carriers that they can trust.
We are still in the early days of developing K-Rating, but its future is as a metric that establishes trust. If you want to create a transparent marketplace you need to have some benchmark of quality. Digital loadboard and load recommendations are becoming the new norm, and the next step is giving both sides of the marketplace the ability to evaluate recommended loads and providers for themselves. That’s just one of the things we are working on at Loadsmart to provide additional value and to build the foundation of a modern logistics marketplace with Kamion.
Founded in 2016, truck management system Kamion brings a suite of optimization tools to small- and medium-sized motor carriers, equipping them to operate competitively, profitably, and sustainably. Acquired by Loadsmart in 2021, Kamion’s mission is to provide end-to-end optimization for trucking processes and enable fleets to scale quickly with demand by helping them find and book loads from top brokers, automatically dispatch loads to drivers, manage paperwork and invoicing, track and manage compliance with federal hours of service and IFTA reporting, and provide freight visibility for shippers and brokers. For more information, please visit: https://Kamion.io.
Transforming the future of freight, Loadsmart leverages technology to build efficiency around how freight is priced, booked and shipped. Pairing advanced technologies with deep-seated industry expertise, Loadsmart fuels growth, simplifies operational complexity and bolsters efficiency for carriers and shippers alike. For more information, please visit: https://loadsmart.com.