Shippers see trailer pools as solution to tight capacity, Transfix says

Under pressure to get their loads delivered in a tight capacity road freight market, shippers are routing an increasing portion of their business through drop-and-hook networks that use pools of spare trailers to enable quick turnaround times for truck drivers, the digital freight marketplace startup Transfix said today.

The pandemic and peak season have tightened the screws on trucking freight markets in recent months, driving up delivery prices and inducing caps by some carriers on the volume of goods they will accept from beleaguered shippers. Despite those challenges, homebound consumers keep pressing the “buy now” buttons on their laptops, feeding spiraling numbers of e-commerce orders into that constricted pipeline.

An increasingly popular way to navigate that dilemma is to use drop freight, a strategy applied by distribution centers to pre-load an outbound trailer with freight before the truck assigned to tow the load even arrives at the facility. The approach can cut hours off truckers’ turnaround times in warehouse yards, but it has been historically inefficient for shippers to manage, since it was offered primarily by dedicated fleets, large asset carriers, or regional mid-sized carriers, according to New York-based Transfix.

Several major players in the transportation sector have built networks to solve that puzzle in recent years, highlighted by products from fellow digital freight matching companies Convoy and Uber Freight as well as J.B. Hunt Transport Services Inc. At the same time, truck fleets have been ordering new trailers at a record setting pace in an effort to get more equipment on the roads and increase their carrying capacity.

However, Transfix argues that the industry already has sufficient trailer numbers, but is failing to use them efficiently. So the company is applying its artificial intelligence (AI) and machine learning (ML) freight matching technology to trailer pools, creating an “aggregated national network of mid-sized carriers to provide high-quality asset capacity that leverages underutilized assets.”

Transfix now says its version is seeing rapid growth, thanks to an approach that focuses on mid-size carriers that have drop equipment and are looking to create more sustainable businesses. According to the firm, its system creates flexible capacity through its access to more than 200,000 trailers, allowing shippers to scale up and accommodate seasonal surges in demand.

That combination has now driven a jump of more than 400% annual growth for the Transfix Drop freight business, the company said today. Specific terms of revenue or freight volumes were not disclosed.

“Drop is a core component of nearly every major shipper’s supply chain. But despite its importance, brokers have historically struggled to create smart, scalable solutions that work for both shippers and carriers,” Transfix CEO Lily Shen said in a release. “The right technology and team have allowed us to rapidly scale our live business with enterprise clients. Now, we’ve rewritten the drop playbook to fill a real market gap, providing shippers with the reliability of asset carriers, and the flexibility and intelligence of tech-enabled logistics solutions.”

As #shippers continue to search for capacity without much luck, the holiday season doesn't seem to be letting up in the Northeast, Midwest, and West. Read more on where we're headed, along with our @freightpipes partnership in this week's #TransfixTake. https://t.co/XaeiBkkoxT

— Transfix (@transfixIO) December 8, 2020