Better together: Tech developers join forces to build a better freight-booking process
Software developers are increasingly integrating their transportation management systems with digital freight-matching apps. That could be good news for shippers and smaller truckers.
Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Freight markets have been roiled by the pandemic-driven recession in recent months, adding to long-term challenges like wide swings in capacity, driver shortages, and thin profit margins. But amid that turbulence, logistics software providers say they may have found a way to capture new efficiencies by integrating their transportation management system (TMS) platforms with digital freight-matching (DFM) apps.
The two software tools take different approaches to addressing those pain points, with TMS products offering a centralized hub of information, while DFM apps use a distributed web of smartphones to match shippers in need of freight service with truckers that can provide it. But the combination of the two can tap into the best of both worlds, according to several logistics technology vendors who have recently built such integrations.
TMS software, of course, has been around for decades, enabling shippers and third-party logistics service providers (3PLs) to find carriers and book loads. But the technology has never been more important than it is today, when users are increasingly relying on their TMS tools to reduce costs; improve internal productivity, efficiency, and customer service; increase visibility; and make better use of capacity, according to the research and analyst firm Gartner. Those factors are set to drive global spending on TMS applications to $1.94 billion by 2022, Gartner says.
In contrast, DFM mobile apps have emerged over the past five years, fueled by venture capital investment and the emergence of the smartphones now found in nearly every trucker’s pocket. Their premise is that matching carriers with shippers can be done more efficiently with artificial intelligence (AI) and digital networks than by human freight brokers relying on emails and phone calls.
CREATING A ‘ONE-STOP SHOP’
Now, in the latest iteration of freight technology tools, TMS and DFM providers are joining forces by building bridges between their platforms, saying they can speed up the contracting process by exchanging data instantaneously, thus creating marketplaces where shippers and carriers can find their perfect match.
“It’s about connecting the communities of carriers and shippers, both for contracted rates and for spot rates when you need additional capacity,” says Dave Lemont, vice president and general manager at Kuebix, a TMS vendor that announced in June it had integrated its software with DFM firm Loadsmart’s freight platform. As part of their collaboration, the developers created an application programming interface (API) that automatically provides live Loadsmart freight rates to any Kuebix user looking for a truckload spot quote.
Kuebix says the deal benefits its current customers by making its platform more of a “one-stop shop.” “Customers really want one place to manage all of their freight, [whether] they’re doing less-than-truckload (LTL), full truckload, international, or parcel. We don’t want to make people learn a second interface and print out reports from a second source. That’s why travelers go to Expedia to book plane tickets instead of visiting the American Airlines site only,” Lemont says.
The combined approach also helps the digital freight-matching providers, he adds. “DFMs have been approaching the TMS providers because capacity doesn’t do you any good without a shipper, and who has the shippers with loads to move? They want access to TMS platforms’ customers,” he says. “The fewer middlemen in the world, the better.”
Costa Mesa, California-based TMS vendor Teknowlogi shares a similar vision of a streamlined freight-matching process, citing that goal as one of the reasons it expanded its collaboration with the DFM firm Trucker Tools in February. The arrangement will provide Teknowlogi’s TMS customers with an improved predictive freight-matching and -booking process, let them secure available truck capacity faster, and “improve engagement” with truckload service providers, the firms said at the time.
“People look to our TMS because they are trying to get a lane covered as fast as possible [and do it] without leaving the TMS,” says Sean McGillicuddy, marketing director for Teknowlogi.
Historically, that task has been relatively simple in the LTL sector, which is dominated by a few large players such as FedEx Corp., UPS Inc., Estes Express Lines, Old Dominion Freight Line, and XPO Logistics Inc., McGillicuddy says. Those large carriers have the resources to build their own software and connect it to TMS platforms with the help of specialized software engineers. However, freight booking is much harder for shippers seeking capacity in the truckload sector, where as many as 90% of trucks belong to fleets of 10 or fewer vehicles, McGillicuddy says. That fragmented market makes it challenging to find carriers, commit to rates, and track loads.
By striking deals with DFM providers whose software apps have been downloaded by thousands of individual drivers, TMS vendors can instantly expand their customers’ access to those small fleets. “As these apps get more and more sophisticated, trucking companies’ adoption of them makes it possible for them to keep up with where the industry’s going, which is automation, shipment visibility, and AI,” McGillicuddy says.
Digital transformation initiatives have accelerated over the last few months, as shippers embrace flexible operations to keep up with shifting demand, Blue Yonder said in a press release announcing the partnership. The move ensures that shippers can tap into real-time services and a reliable capacity network, using a dynamic “pricing discovery” solution to obtain instant price quotes and book loads up to two weeks in advance, the company said at the time.
According to Blue Yonder, shippers and 3PLs often complain about the manually intensive freight-booking process. Offering access to carrier marketplaces—another term for DFM apps—can streamline the process by providing live rates and real-time capacity information at the outset, instead of forcing users to go through the usual routine of contacting their primary carriers, then defaulting to their backup carriers, and finally resorting to the expensive spot market.
That improved procedure can be particularly valuable for smaller shippers that lack the resources that are available to their larger competitors, says Keith Whalen, vice president of product management at Blue Yonder.
“We have a wide variety of shippers and 3PLs, ranging from large manufacturers and retailers and some of largest 3PLs around the globe, to shippers that don’t necessarily have these huge freight spends,” Whalen says. “So we saw an opportunity to offer access to marketplaces, dynamic rates, and capacity, especially for those smaller users without an annual upfront procurement cycle.”
BRIGHT SPOT IN DARK TIMES
The recent flurry of partnerships between established TMS developers and DFM startup firms will benefit all of the parties in the freight-booking process, the companies say.
By providing broad access to shared information, the enhanced offerings can expedite the process of matching shippers in need of freight service with truckers that can provide it. At the same time, they automate what has traditionally been a labor-intensive activity and create one-stop shops where users can complete multistep tasks on a single platform, according to the vendors.
And their timing couldn’t be better. Arriving in an era when the coronavirus pandemic is exerting unprecedented pressure on participants throughout the supply chain, those improvements could be a welcome change for shippers and carriers alike.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.