The Future of Truckload Shipping

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.

Joe Tsai & Felipe
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 brokersselling and pricing each load and finding its truckwill 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
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

Safeway/Albertsons and Anheuser-Busch latest to join Loadsmart

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.

Click here to access our full press release.

Felipe Capella is co-founder and Chief Product Officer of Loadsmart

Loadsmart featured in Frost & Sullivan report: Startups Disrupting Global Connected Truck Market

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.

You can check out the abstract for the report for yourself, as well as some key listed stats on startups disrupting the global connected truck market.

Interested in booking a truck in seconds? Visit us here.

 

Felipe Capella is co-founder and Chief Product Officer.

Loadsmart Launches Quote & Book API for Full Truckload (FTL)

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.

Check our full PR release here.

Felipe Capella is co-founder and Chief Product Officer.

From Booking to Delivery: Loadsmart moves first fully automated truckload shipment

 

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.

See the announcement video here and our Loadsmart Press Release – Aug 22, 2016.

 

Felipe Capella is co-founder and Chief Product Officer.

 

 

Are “Uber for Trucking” Start-ups Stalling?

 

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

Incumbent 3PLs Will Not Disrupt Logistics

Erica Phillips from The Wall Street Journal brought the news that DB Schenker has entered into an agreement with uShip to use its technology in the European market as digital freight-booking platform.

Companies like XPO Logistics Inc. are spending millions of dollars to develop in-house platforms. Others have pursued acquisitions, including United Parcel Service Inc., which last year bought Coyote Logistics, a freight technology firm, for $1.8 billion. Deutsche Post AG took a €345 million ($383 million) write-off on a failed effort to create its own global freight forwarding technology platform.

These efforts by traditional 3PLs to “become a technology company” through massive investment in IT can make sense from a business perspective but will not create transformative innovation. Take XPO for example, which has focused on a great number of M&A deals to grow quickly and consolidate part of the industry. The number of different systems, competing softwares, conflicting APIs and isolated data is staggering. Combine that with the the fact that breaking down is not an option for them: there are thousands of shipments being moved every day and investors looking at revenues and profits constantly.

Therefore technology investment write-offs like the $383 million mentioned in the article should not be surprising at all. The reality is that incumbent 3PLs don’t have the risk appetite or the incentive to be aggressive on technology adoption, as still have to deal with legacy systems arising from decades of operations and recent acquisitions. Big technology spending disclosed by traditional players are more a PR stunt than an actual willingness to disrupt the industry. Coyote is another good example: it operates in an extremely similar manner to any other big 3PL: based on phone calls, an army of salespeople and a traditional brokerage model.

It will be interesting to see what happens with the uShip – DB Schenker deal. The european market has its own peculiarities, and uShip model looks more like a B2C than a B2B. But more importantly, uShip is focused on matchmaking freight with carriers and does not actually operate the shipment movement from point A to point B.

It looks like DB Schenker is looking more for a platform to manage its partner carriers and tender loads electronically than introducing an innovative business model on the shipper side.

 

Felipe Capella is co-founder of Loadsmart and Chief Product Officer.

Loadsmart SmartWay Transport Partnership

smartway_transport_partner

January 15, 2015

LOADSMART JOINS U.S. EPA SMARTWAY TRANSPORT PARTNERSHIP

New York, New York — Loadsmart today announced that it joined SmartWay Transport Partnership, an innovative collaboration between the U.S. Environmental Protection Agency (EPA), an industry that provides a framework to assess the environmental and agency efficiency of goods movement supply chains.

Loadsmart will contribute to the Partnership’s savings of 144.3 million barrels of oil, $20.6 billion in fuel costs, 61.7 MMT of carbon dioxide (CO2 ), 1,070,000 tons of nitrogen oxides, and 43,000 tons of particulate matter, the equivalent of taking 13 million cars off of roads.

Developed jointly in early 2003 by the EPA and Charter Partners represented by industry stakeholders, environmental groups, American Trucking Associations, and Business for Social Responsibility, this innovation program was launched in 2004. Partners rely upon SmartWay tools and approaches to track and reduce emissions and fuel use from goods movement. The Partnership currently has over 3,000 Partners including Shipper, logistics companies, truck, rail, barge and multimodal carriers.

Loadsmart is a proud advocate for a cleaner environment. Our goal is to reduce the total number of deadhead miles travelled annually until they are eliminated completely. 

For more information on Loadsmart visit www.loadsmart.com or call 1-646-88-SMART.
For information about the SmartWay Transport Partnership visit www.epa.gov/smartway

Fast Facts: 5 Things to Know About the FAST Act

1. It’s Been A Long Time Coming

The Fixing America’s Surface Transportation (FAST) Act is actually a compromise between the Senate’s Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act that was passed in July and the House’s Surface Transportation Reauthorization and Reform Act (STRR) Act that was passed in November. According to the Department of Transportation, this five-year, $305 billion plan intends to: “reform and strengthen transportation programs, refocus on national priorities, provides long-term certainty and more flexibility for states and local governments, streamline project approval processes, and maintain a strong commitment to safety.”

2. It Has An Ambitious Set of Goals

Quoted directly from the Department of Transportation, the goals of the FAST Act are to:

  • Help ensure that Americans can get where they’re going more safely and spend less time sitting in traffic.
  • Help raw materials and products can get to their destinations more efficiently.
  • Ensure that the cost of goods and services we depend on every day are not needlessly inflated by poor infrastructure and freight bottlenecks.
  • Ensure that programs work better for states and local partners.
  • Help American businesses can be more competitive and enabled to create more jobs.

3. A Lot of “Big News” Provisions Were Removed

Throughout the last quarter of 2015 there was hot debate over several proposed provisions of the highway bill. It seems that many of these were thrown out of the final version of the FAST Act, including:

  • The proposed increases in maximum weight and length were both thrown out. These provisions faced opposition from major groups like the Truckload Carriers Association and Truck Safety Coalition, who cited increased investment for limited benefits and safety concerns, respectively.
  • The provision that would have encouraged brokers and shippers to hire carriers based off of a set of criteria was thrown out. If this provision had passed, over 450,000 motor carriers would have potentially lost business based on just one criterium- a “Satisfactory” safety rating. Data suggests that nearly half a million small trucking companies and owner-operators are simply unrated and would have been disqualified unfairly.

4. Major Changes are Possible Depending on Research

While quite a few widely discussed provisions were thrown out, others were placed in a sort of legislative purgatory: pending dependent on the result of research.

  • The provision that would have essentially allowed individual states to create compacts with one another to allow motor carriers under the age of 21 to cross state lines was not in the final version of the bill. Instead, the FMCSA will conduct a controlled study on under-21 drivers who served in the military or who serve in the reserves to determine safety and
  • The FMCSA is also required to do research on how detention time impacts drivers, their schedules, their pay and how it impedes the flow of U.S. freight.
  • The FMCSA will also be conducting research to determine whether or not there should be a raise in the minimum $750,000 in liability insurance required for general freight haulers.
  • The FMCSA had to make the compliance and safety scores of drivers private. They must now  commission a Transportation research board to “study of the accuracy of the CSA Safety Measurement System (SMS) in identifying high-risk carriers and predicting future crash risk and severity.”

5. Many are Happy With the Provisions that Were Passed

While no one expected anyone to be completely satisfied, many expressed satisfaction with the measure that were passed, including: a path to reform the Federal Motor Carrier Safety Administration’s CSA safety monitoring system, potential for the use of hair testing for federally mandated drug tests, an easier process for veterans returning from service to transition into the  trucking industry, and dedicated funds for important highway freight projects.

  • American Trucking Associations’ President and CEO Bill Graves said in a statement that “[Tuesday]’s announcement that House and Senate leaders had reached an agreement on a long-term highway bill is welcome news to those of us in the transportation world. While we all, of course, wish there was more money to be had, this bill takes important steps to re-focus the program on important national projects and takes critical steps to improve trucking safety and efficiency.”
  • Anthony Foxx,  Secretary of Transportation and a long-term advocator for improvements in infrastructure said in a statement that, “After 36 extensions, hundreds of congressional meetings, two bus tours, visits to 43 states, and so much uncertainty, it has been a long and bumpy ride to a long-term transportation bill. It’s not perfect, and there is still more left to do, but it reflects a bipartisan compromise I always knew was possible.”

4 Ways Truck Drivers Make the Holiday Season Possible

We’ve talked about what would happen without truck drivers, but when someone tells you to thank a truck driver, do you really know what you are thanking them for? All year long truck drivers miss countless family dinners and holidays, drive through horrendous weather and sit in hours of traffic to deliver the goods, oil and supplies we depend on as a country. Every holiday season we travel to see our loved ones, enjoy large meals and unwrap presents- none of which would be possible without the 3.5 million truck drivers who work throughout the holiday season. Check out the statistics below to find out exactly how truck drivers make the holiday season possible.

Food

This Thanksgiving, be thankful for truck drivers. Truck drivers carry the nearly 52 million turkeys that will be consumed this year to your local grocery store. They also carry the 841 million pounds of cranberries, 1.3 billion pounds of green beans, 2.4 billion pounds of sweet potatoes and 1.3 billion pounds of pumpkins you enjoy annually. We’d all have empty tables without truck drivers!

Traveling

The holidays are a time for family. In 2014 nearly 100 million people traveled during the year-end holiday season. This year, 46.9 million people are expected to travel 50 miles or more for Thanksgiving. Together, that’s close to one-half of the entire United States population. Without truck drivers, there would be no gasoline to fuel these trips, dampening holiday cheer across the country.

Gifts

In 2014 Americans spent $620 billion on holiday shopping between November 1 and December 16. Considering that 100% of consumer goods are transported by trucks, it’s realistic to say that they worked overtime to make sure stores had everything you needed for your holiday shopping list. On top of delivering goods to store shelves, they also transport a majority of packages. Those are both the packages you order online, and the packages grandma sends. It’s predicted that the U.S. Postal Service will deliver 15 billion piece of mail and packages during the 2015 holiday season.

Everything Else

It’s no secret that truck drivers are responsible for delivering most everything you buy to get in the holiday spirit. Not only do they stock the shelves, they bring holiday cheer in other ways. For example, did you know trucks deliver the helium used to fill the famous Thanksgiving Day Parade balloons? Or that each year Americans buy 33 million real Christmas trees? At any given time there are over 350 million Christmas trees growing on farms around the country. How are these millions of trees delivered from farm to consumer? Truck drivers, of course.

Truck Drivers Make the Holiday Season

It’s pretty clear that we owe a lot to truck drivers. They make our holiday season something to look forward to all year long. Loadsmart would like to thank the millions of truck drivers that keep our economy going not only during the holidays, but all year long.