The Logistics of Logistics Podcast: A Decade of Loadsmart with Felipe Capella

Looking Back to Move Forward

About Logistics of Logistics

​​The Logistics of Logistics is dedicated to exploring how things get places. Joe Lynch hosts conversations with logistics and transportation industry leaders about innovation, technology, trends, and the future of freight.

In this episode, Felipe Capella and Joe Lynch discuss a decade of Loadsmart: Looking back to move forward. Felipe is Co-founder and CEO of Loadsmart, a company providing logistics solutions powered by industry experts and next-gen technology that lower costs, increase efficiency, and digitize transportation.

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Key takeaways from the conversion

Intros and history of Loadsmart

• A. "I'm calling from the great city of Chicago, where we have our headquarters. My name is Felipe, I'm the CEO of Loadsmart and co-founder as well. We're getting to our 10th-year journey here, and I'm super happy to be talking to you once again."

Loadsmart's focus on shippers

• A. "We focus on shippers. Shippers are our main customers here. We offer a set of different solutions, including services and software for shippers. Our focus is on shippers that have freight spending from $5 million to a billion dollars, depending on the profile of the enterprise."

Loadsmart's logistics solution suite

• A. "If you look at the load journey, from when a load is created until the financial terms are settled and carriers or brokers are paid, it starts with the order. The ERP probably produces an order and sends it to our TMS. We have planning, optimization, and execution software solutions that consume orders and run optimizations like consolidation or picking the right mode to move the load. We can consolidate LTLs into one LTL provider, or maybe consolidate LTL orders into a full truckload order.

Then, we have our marketplace component, in which we have other brokers, carriers, and shippers invite their own network of carriers and brokers to transact within the platform. We also have tendering with tender scenarios, so we have the whole planning, optimization, and procurement modules.

As the load progresses, after the carrier is selected and the shipper confirms, the load hits the facility for pickup. At the facility level, we have several software solutions. We have a dock scheduling solution called Opendock, which is probably the largest dock scheduling solution in the U.S. today. We’re in more than 3,500 facilities, processing more than 10 million appointments per year, with over 50,000 registered carriers and brokers using the platform daily.

We also offer a Gate-in, Gate-out computer vision solution for asset tracking. This solution uses cameras to automatically identify plate numbers and container numbers as assets move in and out of a facility. It’s automatic and highly accurate. Once the load is finished, we also manage all documentation and finish the process with audit and payments, all embedded in our system.

Beyond technology, we also offer services. For instance, we have a Managed Transportation service. If a customer doesn't want to operate the system themselves, we manage it on their behalf. This means we are responsible for procurement, holding brokers and carriers accountable, and managing KPIs."

The evolution of Loadsmart and the industry

• A. "It’s certainly been an evolution. As you mentioned, many shippers used to say, 'I just need a broker to get me a truck.' But as these companies grow, they need more comprehensive solutions, and that’s where we step in. For instance, you may outgrow a traditional broker that doesn't offer certain services, so you can scale with us."

Felipe's personal and career background

• A. "In my previous life, I was actually a lawyer! As you might notice from my accent, I was born in Brazil and lived there until my mid-20s. I practiced law for a few years before moving to Madrid for academic reasons and then eventually to the U.S. I ended up working at a New York law firm doing M&A work. After that, I moved to Washington D.C. and worked for the Inter-American Development Bank, where I focused on finance for sovereign countries in Latin America. 

After about 11-12 years in the corporate world, I realized I wanted to create something of my own. That’s when a friend of mine, Ricardo Salgado, who was at Goldman Sachs at the time, approached me with the idea of tackling the freight industry."

Loadsmart's use of AI and business intelligence

• A. "In 2021, people were talking a lot about technology and brokerage as a tool to reduce cost per load. Back then, in 2021, we had already realized—after investing a lot in technology for our brokerage operations—that there were diminishing returns. Trying to automate every single small internal task sometimes just wasn't worth it. The most expensive tasks—meaning those that require a lot of human touch—are the ones between the broker and a carrier or between the broker and a shipper. Carriers are still not very well known for the use of technology. It’s very difficult to automate workflows when the counterparty doesn't use APIs, for example. So, we saw diminishing returns, and around that time, 2020-2021, we reallocated a large chunk of our R&D to customer-facing technology. We said, 'Let’s add value through technology to the customer, rather than just focusing on internal processes.' In hindsight, that was a good decision.

"We recently launched FreightIntel AI. It's a tool that ingests all your raw transportation data and creates intelligence from it. Shippers have two main issues with data: either they don’t have access to it because it’s scattered across different systems, or they have a lot of data but don’t know what to do with it. They might have reports with thousands of data lines or even a Power BI dashboard, but they don’t know how to interpret it. Our tool ingests that data and creates actionable intelligence. For example, it might tell you, 'You have an issue with your outbound shipments from Northern California to Dallas; there’s an opportunity to consolidate LTL shipments into FTL,' or, 'You’ve seen a decline in service level in your inbound shipments to North Florida from these three carriers; you should address that.’”

Predictions about the freight market's future

• A. "I think we were a little bit less wrong than everyone else. If you look at all the predictions over the past year, we have always been the most pessimistic among the major brokers and other players. But even at the most pessimistic end—where we were—we were still wrong. This cycle is just taking that much longer. I do agree with most of the comments out there: we always said it is a supply-side issue. People thought that if the economy picked up a bit, it would fix everything. But no, it won’t. We just have too many trucks, too many brokers, and too many providers in general. Our projection is mid-next year, when things will start to incrementally get better. We don't think we’ll see any dramatic swings. Things will just slightly improve as more carriers and brokers exit the market. Companies will shut down over the next six to nine months, and that's how the market corrects."

Learn more and see a demo of FreightIntel AI here!