After almost two years of creating drop-freight networks to improve the delivery process within dense cities, San Francisco-based Baton announced Thursday it has launched its own local trucking fleet powered by proprietary digital solutions to maximize its drop-network offering.
While Baton had not originally considered acquiring its own assets to maximize its local drop-freight business model, Andrew Berberick, co-founder of Baton, told FreightWaves the recent volatility in the market spurred the decision.
“We learned from our adviser network that when you have this much volatility in the market, you need to build a diverse freight portfolio with different sources of freight to survive through boom markets and recession markets we are seeing today,” said Berberick. “Bringing on more shippers and brokered freight into our network allows us to drive down the costs for the last-mile carrier freight that we support.”
In order to diversify its offerings, Baton obtained its carrier authority in December and now has 11 drivers under its wing with a goal to bring that count up to 40 to 50 drivers by the end of 2022. It also now works with most of the top 10 largest carriers in the U.S., including CRST Expedited, Bison Transport, Cheema Transport and Andrus Transportation Services, and is integrating more shippers into its drop-freight platform.
Berberick explained its customers can work within Baton’s network in three different ways.
The first is its original offering: Carriers partner with Baton by staging a load at one of its drop sites and Baton handles the final-mile delivery, invisible to the carrier’s shipper.
“The second use case is the inverse of that, where we partner with a shipper and the shipper just tenders us the local pickup to our drop site and then tenders the long-haul portion to someone else,” said Berberick.
The third case is when Baton works directly with the shipper to just do local distribution center-to-distribution center (DC-to-DC) lanes that range from 150 to 250 miles.
“Our belief is we can use the software we have built for large carriers to do the last mile and apply that software for local DC-to-DC [shipments] to pass our relay efficiencies and savings to shippers while allowing drivers in our network to earn more,” Berberick said.
Baton’s technology capabilities
Along with announcing its new fleet services, Baton is releasing an inside look into the fruit of its labor, its transportation management system, Radius, powered by artificial intelligence.
Ryan Houlihan, a member of the founding team and lead software engineer, explained to FreightWaves that after more than two years of monitoring local shipments, Baton has been able to collect a number of local delivery use cases, or what the company calls “freight tasks,” to discover and apply human-in-the-loop reinforcement learning to automate local delivery scheduling.
“If you are doing long haul and local delivery services, you are working on two completely different ways of doing things that have different data models. Our technology allows us to view this data from varying levels of granularity and enables us to come in and actually optimize last mile to a level people haven’t been able to do before because they haven’t had the high quality of data we have been able to collect over the last two years,” said Houlihan.
The TMS allows Baton to enter in a number of local shipments for the day, click “optimize” and schedule each load based on this high-quality data and driver availability. If the system does see an opening in a driver’s schedule, Baton employees can easily pull an available load from load boards within Baton’s network of shippers to fill in the gaps.
According to the company, using this proprietary software has improved asset productivity by 20%.
“For now, the software is still an internal tool for us, so we can pass on more money to drivers through its efficiencies and create a better experience for drivers by acknowledging their job preferences. In the future, our goal is to give others access to this same software so they can provide similar efficiencies to their fleets,” said Berberick.
Watch now: Baton co-founder Andrew Berberick on Fuller Speed Ahead
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