Are brokerages meant to be technology companies?

How veteran brokerage ITG Transportation Services modernized and grew by partnering with technology providers

Several years ago Chicago-based brokerage ITG Transportation Services faced the same predicament as many companies in the freight business with services and data locked into a brick-and-mortar infrastructure. Should it split its focus from service and create its own tech or lean on third-party providers? Initially, ITG’s impulse was to build its own IT infrastructure and software tools.

Getting pricing to customers more quickly was the first priority it decided to tackle and ITG built a custom pricing portal hosted on its website. 

“When we first launched our pricing site, our customers were ecstatic,” said Derek Kopp, director of marketing at ITG. “But it wasn’t robust enough to scale or provide complex pricing structures. Once our larger customers began requesting support for volume pricing and other customizations, it became clear that we didn’t have the right solution in place. The cost of maintaining it, in terms of time and finances, forced us to go a different direction.”

Another pain point for ITG was managing the growth of its team. Finding desk space and IT capacity to support data sharing and remote work was getting more difficult. “As our server room was starting to get overcrowded, we came upon the option of moving up to enterprise-level, cloud-based solutions,” added Dan Kopp, CEO of ITG. “The options for scalability really blew us away. We realized we could actually almost double our headcount without an investment in space if we did desk-sharing environments and allowed people to work remotely.”

As ITG shifted its focus to finding technology solutions outside of the company, three key technology partnerships allowed it to grow and even expand operations to Nevada and Colombia. By adopting widely used tech partners, they were able to integrate directly with more of their customers, share pricing data with platforms across the industry and become more transparent and efficient for customers. 

Remote Desktop Software, a Microsoft product, allows ITG’s team to work from anywhere without disruption. Prior to the pandemic, 50% of the staff was already working from home, so when COVID-19 hit, the transition to a fully work-from-home environment was seamless. 

“We had already been working remotely for a week before the COVID lockdown because there was a flu going around and nobody felt like going in,” said Derek Kopp. “If there was bad weather or it was a Monday after a bad Bears game, we could shut down the office.”

When ITG was creating its own pricing solutions, its largest customer introduced the brokerage to Draymaster, a customizable online pricing solution that centralizes ITG’s pricing data and allows quoting and billing to run smoothly. Because of Draymaster’s application programming interface, ITG is now present in a lot of industrywide pricing indexes, which provides ITG visibility and credibility.

“Draymaster was already talking to our biggest customers and it allowed us to be in an environment in which our customers were already familiar,” said Dan Kopp. “You can create some great tech in house but you’d have to also go back to your customers and justify how your tech is better than the environment in which they sit.”

When choosing a transportation management system (TMS), ITG noticed that 60% of its customers used the CargoWise platform — said to be the most widely adopted TMS in the industry. In order to strengthen connections and integrations with customers, ITG decided to partner with CargoWise as well.

“One of the most well-received announcements from us as a company was when we announced that we were moving over to CargoWise because there were so many people familiar with it. It also helped our hiring. You could ask a quick question of new hires: ‘Are you familiar with CargoWise?’ If so, a significant portion of the training is already done.”

The international shipping community is rife with fragmentation and needs a more common language. Dan Kopp said this is another reason why ITG has partnered with these credible technology companies — to promote more unification, especially when training a brand-new employee who’s trying to decipher 25 variations of a customer order. It’s easier, he said, to be on the same page with your customers than to try to force your differentiation into their model. 

“Our model is not without its pitfalls,” said Derek Kopp. “When you control your tech, you control your future. You never have to worry about your tech partner going out of business or a particular feature you relied on going away. But we have been a service company for 30 years. Our mission, our core values, our staff are all geared towards providing fantastic customer service. The idea of becoming a tech company is such an existential shift that it doesn’t make sense for us.”

The decision has paid off for ITG. Between 2013 and 2018, the company doubled in size, both in terms of headcount and revenue. It has been able to run efficiently enough through the recent downturn to avoid significant losses or staff changes. And even with all the growth and process improvements, ITG’s customers still rate the quality of service as the No. 1 reason they keep coming back.

The FREIGHTWAVES TOP 500 For-Hire Carriers list includes Transportation Services (No. ).

Corrie White

Corrie is fascinated how the supply chain is simultaneously ubiquitous and invisible. She covers freight technology, cross-border freight and the effects of consumer behavior on the freight industry. Alongside writing about transportation, her poetry has been published widely in literary magazines. She holds degrees in English and Creative Writing from UNC Chapel Hill and UNC Greensboro.