How Digital Freight Technologies Can Help Shippers During The COVID-19 Crisis

With most Americans sheltering at home under government stay-at-home orders, the COVID-19 pandemic has flipped the switch on the domestic freight market.  

Responding to Abrupt Market Disruptions With Digital Freight Technology

The freight frenzy came on fast but seems to have left even quicker. US Freight volumes have plunged to the lowest rate since Freightwaves began recording them in 2018. 

Capacity continues to loosen with most of the country on lockdown and with industries not fully functioning there isn’t enough freight to keep capacity tight. 

Logistics and supply chain companies remain the backbone of the U.S. economy and the American way of life. 

So, how do supply chains continue to function smoothly and consistently during such an unprecedented and unplanned for global crisis?

What’s Happening In The Domestic Freight Market? 

Over the past year, the outbound tender index had been remarkably low, putting pressure on carriers and brokers throughout the market because the majority of freight was moving through primary award carriers. 

The market saw low rates of rejection by carriers as they were grabbing all their contracted or fixed opportunities, leaving little spot or overflow freight available for carriers and brokers. 

What is the Current Status of the US Freight Market?

Market conditions quickly shifted in late February and March due to the COVID-19 pandemic.  We initially saw levels that exceeded 2018 in early March, but now things are starting to return to pre-crisis levels. 

It’s not just the extreme levels that we saw, but the rate of change that was extraordinary.  It wasn’t a steady gradual adjustment with capacity decreasing week over week or month over month with rejection rates increasing, leaving more spot freight on the market. It was as though, almost overnight there was an explosion of spot freight coming into the market that needed to be covered. 

It’s important to note that what we are all seeing behind these numbers is not just business as usual. Seasonality trends and all normal expectations were pushed aside as the highest levels in months appeared out of nowhere.  

Moving freight is always a critical function in the US economy, but the unprecedented level of urgency, the critical nature of the goods being moved and the need to get them to their destination quickly given the current crisis situation. 

What does the COVID-19 data say?

  • Volume fell 30% off this year’s peak on Mar 23.
  • Supply is strong.

The Outbound Tender Rejection Index sits at 5.06%, off a high of 20.2%. When the spot market cools, carriers return to more profitable or consistent contracted business. That means carriers reject fewer contracted tenders = lower OBTRI.

  • Rates on Long Haul runs have tumbled while short-haul rates remain stable.

How Can Transportation Management Systems (TMS) Keep Supply Chains moving during COVID-19? 

Shipping companies should be turning to technology to help weather the storm and come out on the other side of COVID-19 set up for success. Technology allows shippers to collaborate with supply chain stakeholders while they are working remotely and makes connecting with additional truck capacity easier and more efficient. 

NOW is the time for shippers to lean more heavily on technology. 

3 Ways your TMS can help combat market volatility?

At Loadsmart we believe that leveraging technology and thinking about your TMS from a broader perspective gives shippers an advantage when faced with market volatility.

1. Accelerate Rate Discovery with Instant Rates

For shippers, especially those with a large volume to cover, the challenge of getting a price, that’s not a paper rate, that you have confidence in, and that’s truly indicative of the actual capacity that’s also bookable is tough. 

Many companies that were using more efficient solutions to cover their spot freight prior to the COVID-19 crisis are reverting back to older solutions to keep their heads above water. 

The need to get rates, capture data coupled with the complexity and confusion in the market has caused them to go back to swapping spreadsheets over email with lists of carriers and brokers. 

Getting rates, understanding what genuinely bookable truly liquid rates are out there is generally a challenge, especially for companies that haven’t invested in integrations with more machine learning-driven instant pricing solutions. 

Still, in the current market, it’s even more difficult. Just capturing the eyeballs of a carrier or broker to make sure they get you a rate is a challenge and knowing if the rate is going to be good and how long it’s valid is difficult. We believe that ultimately this is not a challenge shippers should be facing. 

We recognize that in a market like the current one, there are going to be multiple problems to solve and considerable challenges to overcome. Yet, we don’t think that getting a bookable rate should be one of them. 

It really should be much more straightforward.  Much more scalable. And much more automated. 

So those having to make procurement decisions can spend their time and their energy on more critical challenges than just trying to figure out what rates are available. 

Artificial intelligence is fundamentally changing how freight is priced and shipped.  

The thought that someone on a sales team receives a rate request then has to connect with operations and others within a brokerage or carrier, trying to understand what availability is out there is exhausting. Then they still have to decide how much to mark it up and how much they can squeeze out of the customer, then after some time which can be hours someone gets back to the shipper with an instantly bookable rate –  those days are behind us. 

Pricing calculations need to use the power of artificial intelligence and machine learning models. 

AI-powered pricing provides shippers with many more rate options while reducing the headcount cost associated with calculating rates.

Having a sales team, whose compensation is almost entirely driven by how much they can squeeze out of a customer and how much they can mark up to the shipper focused on calculating rates is not necessary. 

Now you can have algorithms calculate the rate, and you don’t have to pay them a commission. 

The market then becomes more efficient, which allows us to offer more value to Loadsmart customers rather than price gouging, which has been typical with spot in the past. 

Using a machine learning model allows us to provide our customers with an instantly bookable rate in a matter of seconds, by ingesting large amounts of data (over 500 different data points) allowing us to provide a rate within 2 to 3 seconds in any one of over 900,000 lanes across the United States.

2. Make Your Routing Guide Respond to Market Conditions

Let’s dig a bit deeper into the idea of the routing guide and how integrating your routing guide with a solution like Loadsmart makes your routing guide better and smarter.  

Those that didn’t see much volume running through your routing guide last year have certainly seen the dust blown off that routing guide recently.

What Is The Problem With Traditional Freight Routing Guides?

Traditional routing guides are static. Routing guide rates only get updated a few times a year, and loads can spend hours or days in routing. Rates are often significantly higher than the spot market. 

Why Are Dynamic Freight Routing Guides Important?

With Loadsmart’s dynamic routing guide, rates update in real-time and we accept 100% of tenders instantly. You can take advantage when market rates are below routing guide rates. 

Integrating with Loadsmart’s dynamic routing guide allows you to reduce the amount of freight that goes to the spot market, you can get routing guide freight covered much faster, and pay less to move freight than you would by relying on only static rates

3. Find the Best Carrier, Faster with Algorithmic Sourcing

Algorithmic sourcing is the best way to get a carrier to cover a load. Getting the right pricing, knowing the rate you are paying is reasonable and that the tender gets accepted by the carrier broker is critical.  But it’s also imperative to understand that when you are working with a broker like Loadsmart, how they go about choosing the carrier who ultimately ends up moving your freight.

Algorithmic Sourcing – The Old Paradigm vs. The New Normal

Traditionally the only way for a broker to get a load covered was to have an army of carrier salespeople pounding away at keyboards and dialing the phone all day, communicating with carriers trying to get freight covered.  

We understand and respect the value that comes with a carrier sales team and have our own carrier sales team at Loadsmart. That said, we also realize that over the long term, much more freight needs to be covered based on algorithmic decision making rather than by individuals to allow carrier sales to focus on the relationships they have with carriers. 

Making sure carriers meet service levels and are performing as they need to is a better use of carrier sales time versus worrying and touching every single load. 

Algorithmic sourcing allows you to move the load through the system without the support of a carrier salesperson (unless in the case of an exception), giving your team time to build better relationships with carriers and while increasing operational efficiencies. 

How does Loadsmart Use Algorithmic Sourcing? 

There are 3.83 Million Class 8 Trucks on the road in the United States. 

For shippers that were recently struggling to get their freight covered, that may seem like not enough, but the reality is there is a tremendous amount of capacity out there in total. That’s important to note because it speaks to the complexity and the challenges associated with choosing a specific truck to move a particular load. 

Considering the complexity of a problem where you measure in millions, not single digits or tens of thousands, it’s hard not to think that there really has to be a better solution out there. 

One would imagine there has to be an algorithm out there that is capable of finding way more options than a person possibly could. 

Who has the time it would take to consider millions of options before making a decision? Not logistics professionals who need to ship a lot of items very quickly while keeping costs down for both themselves and their customers.

How Does Loadsmart Help Shippers Consider Millions Of Freight Options?

Loadsmart helps shippers consider millions of freight options by using technology as much as possible. We start by determining which carriers we feel should be part of our network. 

We use technology to make better carrier network decisions by integrating with all sorts of 3rd party data sources, including RMIS, FMCSA, which gives us access to inspection data and carrier safety records and even integrations with load boards. 

Load board integrations are essential to us, not because we are trying to move freight on the load board, but because it allows us to monitor carrier behavior on the load board. 

Here’s an example of why load board monitoring is essential.

By integrating with load boards, Loadsmart’s able to see how many trucks on average a given carrier has posted on that load board. That’s important because we also know how many trucks they have in their fleet. We get that number directly from the carriers we currently work with and easily capture the number from other sources when it’s not. 

Let’s say we know a carrier has ten trucks in their fleet. I can see that on one or two major load boards they are consistently posting 50, 60, 100 trucks. What data has historically told us is that it’s probably a carrier you don’t want to work with because they are representing that they have much more capacity than they do. 

They may be out there fishing for loads for trucks even though they already accepted a tender putting them at high risk for being the type of carrier that will drop a load just before pickup because they got a better offer. That is not the type of carrier Loadsmart wants to move our customers’ freight. 

Making sure the carriers that you have in your network are carriers you want to be doing business with is just one of many examples of the things Loadsmart can do with the massive amounts of data we ingest from 3rd party sources. It allows us to solve particular problems for our customers.  

Bonus: Keeping Your Loading Docks Open And Fully Utilized 

Loadsmart can help improve the throughput of your loading docks to ensure your facilities, which may already be under pressure under current market conditions, are running as efficiently as possible

While this is the way everyone books appointments, we believe there is a better solution that improves the throughput of facilities while also reducing driver wait time.

In any market condition, the quality of driver experience is super important, but especially in times like now, when every minute and every hour of driver time and facility availability is vital. We want to make sure that both the driver over time and the facility capacity are being used in the most efficient way possible, not wasting anyone’s time and not wasting available dock hours. 

So, how do we make that happen?

We accomplish this by integrating with the facility to capture real-time dock availability through an API allowing us to book an appointment when booking the load automatically. 

That allows us to book an appointment automatically when booking the load. Instead of having to call or email the facility, we can grab an appointment instantly and automatically by integrating with the doc scheduling tool that you are using. 

Integrating via API allows us to grab the appointment availability and lock in the appointment much quicker while also taking advantage of the tracking data we capture. At Loadsmart, we are obsessed with tracking and put the data to work by using the real-time ETA of when the truck is going to arrive at the facility to see if we need to update the appointment, which we do automatically while the drive is still en route.

By doing this, we are able to avoid situations where drivers arrive at times outside their scheduled appointment time. For example, a driver’s expected to arrive at noon, but we know thanks to real-time ETA data that the driver is going to get there at 8 AM.

Rather than having the driver sit there and wait for four hours, we can automatically ping that facility via the integration with the dock scheduling tool to see if there is an earlier appointment available. Then if there is an appointment that is closer to the driver’s real-time ETA, we can grab that and give back our previously scheduled time.

Why does this matter?

The person at the gate doesn’t have to worry about trucks showing up early or late, and drivers don’t have to sit there and wait for their initially scheduled appointment if they are too early or to get worked in if they are late. 

Instead, we more closely align their ETA of their truck with an appointment much closer to their arrival time. Meaning you have fewer drivers waiting at the gate and less driver time wasted waiting at a facility in general. You can improve the throughput of the facility because you have a better match with when the truck arrives and when there is an available gate to get that truck loaded or unloaded and move on to the next truck.

In times like we are experiencing now, driver time and facility efficiency are critical.  But in any market conditions, we all need to show more respect for drivers’ time and the driver experience.  

Automating and integrating with the dock scheduling tool allows us to reduce driver wait time and be much smarter about real-time appointments, which improves your network. 

How Can Shippers Prepare For The Next Supply Chain Disruption?

Shippers can and should prepare for the next supply chain disruptions by implementing digital freight technologies NOW, not when the next disruption happens. 

The last few months have shown shippers that volume can surge, and outbound tender rejections can rise to unprecedented levels at the drop of a hat. 

While outbound tender rejections begin to fall, providing stability for shippers now is necessary to ensure the next disruption doesn’t catch you off-guard.  Integrating with digital freight technologies now will give you peace of mind and make managing the next crisis easier. 

As uncertainty grows, shippers are turning to technology for greater clarity to leverage instant market-based pricing and dynamic routing to deliver real savings while improving service. 

Don’t wait for the next disruption to happen. Integrate your TMS with Loadsmart now to help you build, manage, and tender loads. 

Learn more about how Loadsmart integrates with BluJay, Oracle, and MercuryGate.

To Our Carriers: Thank You

These are uncertain times, but you’re not letting that stop you from keeping America running.

Only a couple of weeks ago, transportation was humming along as usual: freight volumes were normal and flat and carriers were only rejecting their contracted loads 4% of the time.

Since COVID-19 has gripped America’s conscious and economy in early March, carriers have been faced with an unprecedented surge in shipments that eclipsed records previously set in 2018.

FreightWaves Sonar

Freight volume seemingly grew +30% over night and tender rejections grew to their highest point in several months.

This surge has forced truckers to spend even more time on the road and less time with their families… all to keep grocery store shelves full and pharmacies fully stocked.

From everyone at Loadsmart, we want to thank our carriers for their work and acknowledge their sacrifice.

And while you’re out there for all of us, we’ll be here for you.

To our carriers, thank you for giving Loadsmart the opportunity to make your job a bit easier in a difficult time. Together, we keep America running: https://hubs.ly/H0p11sG0

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?

3 Ways for Truck Drivers to Stay Safe on the Roads this Winter

3 Ways for truck drivers to stay safe on the roads this winter

With icy roads, snow storms and generally unwelcoming weather right around the corner, it is time to start preparing for winter. For those of you who are on the road most of the time, it’s important to make sure that you and your truck are ready for whatever comes your way. So what can you do to prepare? We’ve put together a list of tips to keep you safe this season.

Pre-Trip Prep

You’ve heard it before: preparation is key. The best tip we can give for a safe, smooth ride is to do your prep work. Know your route, know where the best rest stops are and have a backup plan. Monitor the weather to figure out where the weather is the worst and where it is the best so you can better plan where you should stop. Keep extra essentials on-hand, both for you and for your truck. Good supplies to keep for you include an extra blanket, flashlight, coat, water and a charger. For your truck, it’s good to keep sand or salt, extra windshield-wiper fluid, jumper cables and a windshield scraper.

Be Aware of Your Surroundings

Know your truck. If you’re in the same truck you’ve been in for years, you know your truck’s limits and shortcomings. You know when you need to break, how it handles turns and how it drives on the ice. If you’re in a new truck, or are relatively new to the trade, it’s important to take these points into consideration before you head out into stormy weather. Give yourself extra space to turn and brake. And no matter how long you’ve been on the road, always watch out for black ice, which appears most often on bridges, intersections, overpasses and naturally cooler spots.

Inspect Your Truck

You always inspect your truck, you’ve been doing it for years, we know. Inspections are always important, but during the winter they’re crucial. Before your trip, double and triple check your lights, tires, fluid levels and windshield wipers. Make time during stop offs to check you truck again.

Are You Ready for Winter?

Depending on where you are, you probably still have time to get ready for the cold season. Here at Loadsmart, we want you to stay safe on the road. When the weather turns bad, it’s easy for both sides to get frustrated. With our GPS tracking and open chat platform features, we make it effortless to stay connecting, ensuring a better experience for everyone. Interested? Sign up for free here to access these tools and all of Loadsmart’s other features.

Logistics technology eliminates deadhead miles to make the trucking industry more environmentally friendly

How Logistics Technology Can Save the Environment

We’ve talked about how logistics technology can save the industry, but did you know it could help save the environment, too? As a highly fragmented industry that’s severely lacking in technology, many trucks are running with little efficiency. If the trucking industry could eliminate its deadhead miles, trucks would spend less time on the roads, using less fuel and cutting down on emissions.

The Facts of the Matter: Deadhead Miles and the Trucking Industry

In a 700 billion dollar industry that moves 70% of all goods in the United States, there is little room for inefficiency. Class 8 trucks log over 130 billion miles a year, with nearly 20 billion of those considered deadhead miles. The trucking industry accounts for 12.8% of all fuel purchased in the U.S., which translates to 17.5 billion gallons in 2014 alone. By eliminating deadhead miles, the industry would save over 2.5 billion gallons of fuel every year. A decrease in fuel use and emissions will in turn reduce air, water and land pollution, acid rain and ozone destruction.

Real-Time Shipment Tracking and Notifications Eliminate Deadhead Miles

Real-time shipment tracking sounds pretty “Big Brother,” right? Well it’s not, in fact, real-time shipment tracking is one of the most powerful tools available to the industry, for shippers, carriers and the environment. Using GPS technology, logistics platforms are able to send carriers local jobs instantly, eliminating time usually spent at loadboards. When carriers are able to find loads via location instead of traveling back with an empty trailer, shippers receive better rates, drivers don’t have to waste time, extra trips are eliminated and the entire process is streamlined.

Fleet Management Makes For Better Business Decisions

Knowledge is power. It’s an age-old adage for a reason. When dispatchers and owners know exactly what’s going on with their drivers, via tracking, open communication platforms, instant e-document transfers and load organization tools, they are able to make better and more informed business decisions.

So What Does Logistics Technology Mean For the Environment?

With a growing number people in the industry transitioning to technology based platforms, the overall efficiency of the industry is poised to skyrocket in the coming years.Our goal is to bring the excess capacity to market and eliminate the billions of deadhead miles traveled every year. With an increase in efficiency, there will be a decrease in traffic, emission, safety and economic concerns. 

 

Motor Carriers: Check Out Inputs on Raising the Minimum For Liability Insurances, Who do you Agree With?

A little over 2,000 people went to the FMCSA website to give their input on whether the minimum liability insurance should be raised. Motor Carriers currently have to comply with the $750,000 minimum liability insurance. Both sides were debated and made fair points. For said points go to CCJ>>

For further details on what Owner Operators are saying go to Overdrive>> 

Motor Carriers: How To Retain Drivers and Attract New Gen-Drivers

During the 2015 recruitment and retention conference the TCA chairman discussed current effective strategies among motor carriers to retain drivers and attract the new generation driver. “The carriers who are most responsive to change will be the ones that survive”

Current Effective Strategies Among Motor Carriers

-“Work more with customers on length of haul” to fit drivers home needs.

-Work with sales to find “driver-friendly freight” where detention is ideally not an issue.

-“Pay Dividends” for recruitment & retention efforts.

-Rebranding to attract the new generation driver.


CCJ>>