[WEBINAR] What To Do When Your Routing Guide Falls Apart

With the dramatic market swings of 2020, it’s no surprise that shippers have recently seen +25% tender rejections from their primary carriers.

Because shippers’ routing guides mostly reflect a market’s past, the static rates within them become less dependable as they age and as the market changes.

The freight market is evolving, and shippers must adapt their routing to be dynamic, adaptable, and prepared to weather any market.

You’ll learn:

• What to do when your routing guide falls apart
• How to prepare for and thrive in any market
• How to automate greater efficiency and less expense in freight moves

On Demand Webinar:

The Agile Way to Adopt Freight Technology

It’s 2020 — self-driving trucks exist, more powerful rockets are launching into space, and companies of all sizes are digitizing the analog aspects of their businesses.

The transportation sector is no different. API calls are quickly replacing phone calls, and algorithms are automating what was previously manual. The march toward a technology-driven supply chain isn’t new, but for transportation departments in many companies, it’s only just begun. 

With an agile approach, the goal is to test technology quickly and evaluate its effectiveness iteratively rather than creating a committee and launching an RFP process. This is especially relevant for light-weight technologies that don’t require drastic process changes, contracts, and down payments the size of mortgages. However, it doesn’t mean skipping careful consideration.

So, where should transportation teams who are looking to upgrade their technology stack begin? 

Find the Gaps

There is no decent manager in history that hasn’t offered praise for increasing productivity and decreasing costs. Don’t wait for the ask; just map it out.

Where are you and your team spending the most time day-to-day? Which tasks are being repeated frequently that can be automated? Which operating expenses can be decreased or eliminated? What work would the team rather not be doing?

Once you’ve made your list of gaps, rank them within a weighted scale that includes the most important success factors. This could consist of your expectations for:

  • Time saved
  • Cost recouped
  • Revenue increased
  • Time to value
  • Ease of use
  • Ease of implementation

Forecasting expectations are never perfect, but the output of this will serve as your blueprint for success. 

Plan the ROI 

The quickest way to get the green light for exploring new technology is to rank the gaps you’ve identified by their cost burden and plan the ROI. This can be done easily with a little common sense. 

In transportation, common pitfalls that are easy-to-address are staff costs for repetitive tasks.

A few examples:

  • Freight Rate Discovery
    Formula: Loads Per Day * Staff Cost to Book Load = Daily Rate Discovery Cost

  • Tracking and Rescheduling a Load
    Formula: Cost to Monitor Loads + Cost to Reschedule Loads = Daily Cost of Time to Track and Reschedule

  • Re-booking Freight Loads Given Back
    Formula: (Loads Per Day Given Back * Cost of Rate Discovery Per Load) + (Premium Uplift) = Daily Rate Discovery Cost for Loads Given Back

Quick math using these formulas and assuming 200 loads per week, 262 business days per year, $25 per hour staff costs, and a 15% premium uplift with $1,000 COH estimate that this shipper spends $191,260.00 annually for these automatable and avoidable tasks. With a $0 Loadsmart TMS integration, for example, these overhead costs can be significantly reduced or eliminated.

Where your gaps are widest, the technology will likely pay for itself. 

Dig into the Technology… and the Company

Now that you’ve gotten everyone on board by pointing out the addressable efficiency gains by automating repetitive but critical daily tasks, the challenge is to choose the best technology and company for tackling them.

What’s unique with supply chain technology companies is that their merits go far beyond their products. Today, technology alone doesn’t move freight over oceans, out of ports, onto roads, and to final destinations. Instead, this is achieved with a combination of companies, technologies, people, and partnerships. 

A handful of questions you may ask about the vendors:

  1. Which companies do they compete with, and how do they compare?
  2. How successful are they? Are they starting or scaling up, and are they likely to be around in 5 years?
  3. How’s the customer service? 
  4. What’s their vision? What other problems can they address now and in the future?
  5. Are they partnered with companies I want to work with?
  6. Is this an ethical company?

For a proper evaluation, it’s always worth reading what analysts are saying. If you don’t have access to it, ask the vendors. 

Read More »

Loadsmart CEO on untapped power of sourcing algorithms

Loadsmart CEO Ricardo Salgado attended the Trans-Pacific Maritime Conference hosted by JOC. Check out the interview from the event and hear the origins of Loadsmart and the fundamentals of the algorithms that power the automated pricing, booking, and shipment of freight.

Here’s the transcript:

(00:20) AB: I’m Alessandra Barrett, Senior Content Editor for JOC and I’m in our 2019 TPM Conference with Ricardo Salgado, CEO of Loadsmart. Great to have you here.

(00:30) RS: Thank you for having me.

(00:31) AB: With the recent spot market fluctuations, everyone is probably looking for something a little more predictable. What inspired you to create Loadsmart?

(00:43) RS: I actually started very young. My parents owned a paper company and during my internships there I would go out there and realize that in this industry, how we moved goods was highly inefficient. We were in the middle of this technology revolution and as an engineer, I looked mathematically from an engineering perspective and a process perspective with the latest technology, I realized there has to be a better, more efficient and socially responsible way to move goods from point A to point B.

(01:17) RS: As I started going to college and work, I realized there are massive investments in data infrastructure, for example 5G, but the truck drivers today, instead of 25% having a smartphone, now 95% of them have a smartphone. So as you started seeing more connectivity and you can hold them accountable and part of this sharing economy and dual rating systems, I realized there’s definitely an opportunity where you can put it all together and all of a sudden it’s an industry that’s huge, fragmented, lacked technology… and it all just came together at the right time.

(01:55) AB: Loadsmart uses AI for truck brokerage. Can you walk me through how the AI is applied?

(02:03) RS: Absolutely. Our core technology does two things. Number one is we provide instant pricing and booking capabilities nationwide. So at any point in time, just like you book a flight on Expedia, you can say, “I need a truckload from New York to Los Angeles,” click a button and get a price immediately. Now, New York to Los Angeles is a highly trafficked route because they are metropolitan areas. But if I go South Dakota to Maine, there’s not a lot of volume there. To generate that rate, we estimate it programmatically based on roughly 385 different factors. Our AI and data science learns every single time we render a price and iterates through it. Think about each one of these features as a different knob. If we render a price and it’s accepted or not, then it gives us feedback and our learner models kick in and start adjusting. It asks, “what if we had shifted this one or the other one? Would it be more accurate versus where we actually sourced that truckload from our partner network.” So, that’s one element.

(03:09) AB: Oh, I see.

(03:09) RS: The other element is identifying — it’s our sourcing algorithms. Our sourcing algorithms, which is on our supply side, is identifying the ideal carrier or trucking partner within our network or outside of our network. It’s asking itself which is the best carrier at that point in time. Which one is moving in the right direction with the right driver for the right rate in that same time, etc. So those sourcing algorithms also start learning from that carrier base, powered by AI and data science, asking “Did this one work? Did it render correctly? Was it accepted?” It starts learning, and ultimately it starts optimizing both sides of where we sit in the middle.

(03:50) AB: Well, thanks for taking time to sit down with me today.

(03:52) RS: Thank you, Alessandra.

(03:54) AB: I’ve been speaking with Ricardo Salgado, CEO of Loadsmart.

The Shipper/Carrier dynamic at #TPM2019

Navigating challenges between shippers and carriers is (finally) becoming less arduous

JOC-TPM

The Trans-Pacific Maritime Conference in Long Beach, CA, hosted by JOC, is a must-attend event for supply chain leaders from every corner of the market. 

This conference, more than any other, is the time of year where shippers and carriers take a hard look at the most important short-term challenges and discuss longer-term macro trends. Hot topics of 2019 included the IMO 2020 Sulfur Cap, the North American capacity crunch, the US-China trade war, technology innovation, and how market conditions are impacting rates. Here, we’ll discuss the last two – and the promising outlook on integrating both technologies and stakeholders.

Historically, there’s always been tension between shippers and carriers, as they naturally view the same macro challenges through different lenses. And while market conditions will only continue to add pressure, the reality is that shippers and carriers share the same unique set of problems. And that, according to Port of Long Beach Executive Director Mario Cordero, means both sides of the supply chain need to collaborate better. SupplyChainDive quoted;

“It’s a historic issue, the shipper and carrier dynamics.” – Port of Long Beach Executive Director, Mario Cordero

At TPM, we found that shippers and carriers alike are increasingly willing to embrace technology in order to better collaborate and improve service – a marked change from even five years ago. 

For shippers, Ai powered pricing algorithms and TMS integrations now enable them to quote and book truckload shipments in seconds without ever having to leave their native system, eliminating the time consuming back and forth over phone and email. For carriers, these same technologies have made it dramatically easier to find relevant loads and minimize empty miles, all while reducing paperwork.

These technologies are quickly headed in the direction of intermodal automation, as companies like Maersk look to offer their customers end-to-end solutions across modes. And according to Maersk CEO Søren Skou, the timing could not be better. 

JOC reported notable comments from Skou’s talk and pointed out that while 40-45% of Maersk’s business is coming from freight forwarders, Skou warned forwarders ignoring the wave of automation;

“If the only thing they provide is a booking service with a carrier, then it is going to be a hard place to be.” – Maersk CEO, Søren Skou

Did you attend TPM 2019? If so, what stood out to you?