As broker margins decline, there are few choices to increase profitability. Cutting costs is usually priority number one, and one of the best ways to do that is through technology.
Cargo Chief is democratizing the technology for small and midsized brokers – and even some large ones – to help them better compete in the highly fractured world of freight brokerage.
“There are a lot of tech-enabled freight brokerages… but they are all trying to make technology for shippers,” explained Russell Jones, CEO and co-founder of Cargo Chief. “Who’s making technology for the 18,000 freight brokers?
Cargo Chief launched its innovative C4 (Cargo Chief Carrier Capacity) platform in 2018, enhanced it in 2019 with the addition of a large carrier database and the inclusion of Federal Motor Carrier Safety Administration SAFER data, and has now introduced a further advancement called Projects.
“We have deep details from hundreds of thousands of trucks and information on millions of trucks because we have the data from the FMCSA database,” said Jones.
C4 offers capacity matching, carrier development, recent transactions and up-to-the-minute bookings, CRM for carrier management and automated follow-ups. Projects, which is designed to assist the broker that deals with “repetitive freight,” is said to provide between a 5% and 15% savings as backhaul carriers become easily identified.
“When a shipper comes and says, ‘I have a load from Oakland to Dallas today,’ likely they are going to come back to me in the days and weeks ahead [with another load]. It’s rare that they have a one-off load,” noted Jones.
Using Projects, the broker is able to input load details and check available capacity on a list of “procured” carriers. That list includes carriers the broker knows run those lanes, but the system will automatically suggest additional carriers also known to run that lane. Once the broker adds the carriers to the procure list for that load and clicks the check capacity button, an automated email with load details is generated to all the carriers on the list.
Jones said any information added to the load can be accessed by other members of the team, leading to greater efficiencies and less time repeating steps.
Information in C4 includes relevant data on the carrier, as well as notes that brokers can add. This can include preferred pickup times or minimum rates to run a certain lane. Carriers are able to share their available capacity along lanes with Cargo Chief to be made available to all brokers. A backhaul search function aids in increasing profitable capacity.
RoadOne LogisticSolutions has recently joined the Cargo Chief Projects platform. Like many organizations, RoadOne receives daily load lists from multiple shippers and typically selects a subset of these loads, overlooking the rest. The C4 platform prioritizes these ignored loads by considering a broker’s existing carrier network, C4’s network of over 530,000 carriers, and other load characteristics to make suggestions “as to which ones they should actually work on,” said Jones.
“C4 gives us a way to see load opportunities that don’t always make it to our TMS. We’re able to take those opportunities, match them in C4, which will then prioritize projects based on what we care about; allowing us to plan ahead on challenging lanes and drive our revenue,” said Patrick Carroll, director of operations & pricing for RoadOne LogisticSolutions.
For brokers, the ability to reduce the time-consuming task of finding available capacity is key to improving their margins. And it’s what attracted Bob Voltmann, former president of the Transportation Intermediaries Association, to join the Cargo Chief board as an advisor.
“Cargo Chief really helps traditional freight brokers with technology and data to democratize any technology advantage that mega-brokers may have,” said Voltmann. “I’m excited to help a leading vendor that is providing technology that will enable thousands of brokerages to be more efficient and competitive.”
Voltmann told FreightWaves that brokers and third-party logistics providers need to find ways to improve their margins.
“3PLs that are going to survive are going to have to automate the back office,” he said. “Cargo Chief is democratizing that data investment – that technology investment – so everybody can access it and use it. So those big companies are not going to have a tech advantage if the 3PL uses a service like Cargo Chief.”
Voltmann noted that automating the process to get a truck under load is key to this.
“Russ is working on automating getting a truck under a load and that’s where profitability is going to be made,” he said. “If margins are going to continue to decline, the only way to increase profitability is to reduce cost.”