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Digitize or die: Transparency for transportation service providers trending high

It’s not just an “Internet of Things” fantasy. 2018 is the year of transport transparency and efficiency. (Photo/Shutterstock)

One transformative technology for new growth opportunity in 2018 lies in the Internet of Things (IoT) sector, according to firm IHS Markit’s report. “Pay particular attention to analytics-driven IoT platforms, computing at the edge, and data exchange brokerages (DEBs), as IoT influences everything from home security systems, to oil and gas exploration, to smart cities, to retail experiences, and beyond,” they write.

There is also the ever-looming threat of disruption from giant e-commerce retailers, such as Amazon, as well as a range of tech start-ups. Customers are demanding real-time information, quotes and visibility, and those that don’t invest in the necessary technology will rapidly lose their market place.

That happens to be the very game uShip’s been playing for the past 15 years. The privately-held, Austin-based company has forged ahead of the “Uber for trucking” and “sharing economy” trend. They are now a global online marketplace for shipping services. Individuals and businesses post items they need shipped in a variety of categories, including auto transport, boat shipping, home and office moving services, and the transport of heavy industrial equipment.

How it works for everyone

The transparency has never been better. Customers can book a shipment immediately from the quotes or opt to wait for auction bids, similar to eBay’s “Buy it Now” feature. The company uses a feedback rating system for service providers and customers, similar also to the eBay feedback system.

Transportation service providers place competing bids for the right to haul a customer’s shipment. For some categories, including boats, autos and LTL freight, customers can select an upfront quote for transport services or enter an acceptable price to be matched with a transporter.

Transport companies maintain company profiles that feature past customer feedback, equipment photos, videos, cargo insurance data, and information about U.S. Department of Transportation licensing, operating authority, and licensing verification, thus giving shipping and moving companies free and immediate access to transport jobs –- carriers only pay a transaction fee on jobs they complete. With thousands of shipments listed and available on any given day, owner-operators and large freight carriers alike have equal opportunity to bid on jobs that suit their needs and routes.

Service providers can fill excess capacity or find profitable backhauls that help maximize their business and time on the road. The platform also gives service providers free tools to help them establish and build their online reputation through its feedback system and customer reviews.

It works for brokers too. The PRO exchange platform allows frequent shippers and transportation brokers to leverage the exchange technology to build and manage their freight exchange. PRO users invite their existing carriers to join their private networks, post freight out to their approved and monitored carrier network, assign loads directly to carriers and track status in real time from dispatch to delivery.

The Digitization Movement

The Global Freight Forwarding 2017 report emphasizes how digitization is looming large in the immediate future. Cathy Morrow Roberson, president of the TI consultancy, says, “The digitization of supply chains has forced many traditional forwarders into investing and automating their processes. The new generation entering the logistics markets have grown up with the laptops and smartphones and expect business transactions to be the same or just as easy as ordering a pair of shoes from Amazon.”

When asked what improvement will be utilized the most over the next five years, 58% of responding shippers named “digitization,” with 92% of survey respondents saying “digitization adds value.” 58% of survey respondents view online freight marketplaces as an opportunity for traditional forwarders.

Early last year, hailing it as the “digital future,” D.B. Schenker announced a five-year agreement with uShip for exclusive collaboration in Europe. Schenker isn’t the only traditional large logistics company that’s been investing in technology. UPS bought Coyote Logistics in 2015 for 1.8 billion, and in late 2014, C.H. Robinson announced it was buying Freightquote.

The Schenker acquisition and equity stake in uShip will connect the some 30,000 transport partners in the European land transport network to their freight. DHL has also introduced its online marketplace — CILLOX — an platform that matches full truckload and LTL shipments with available transportation providers.

“A big plus for digitization is that it levels the playing field for small-to-medium-size forwarders and the larger ones,” says Morrow Roberson. “And it’s not only forwarders, but also shippers of all sizes. Shippers can take advantage of numerous online marketplaces such as Freightos to obtain a rate, book the freight and track it from beginning to end.”

One significant drawback to these marketplaces is that not all trade lanes are included. Shippers must choose wisely which marketplace to use and remember to compare rates among all of them. “The big question to ask,” cautions Morrow Roberson, “is if the rates are published or negotiated.”

In the end, though, it’s as easy as it is inevitable. Greater automation leads to transparency and efficiency to what has for far too long been an inefficient shipping industry. Primarily serving the commercial freight, vehicles, and household goods markets, the uShip freight exchange seamlessly connects shipping customers — from freight brokers to business shippers and consumers. They’re not the only ones, but are certainly a leader in the sector. Feedback-rated transportation service providers engage in everything from online fixed price, to spot market and auction-based transactions. We’ll see more of it in the months and years to come.

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