Forager, the technology platform powering the complex North American cross-border freight market, has released instant contract pricing for dry van truckload movements on SCOUT, its proprietary software.
Using SCOUT, shippers can build a lane and lock in contracted freight rates in a matter of minutes. Specifying load attributes like origin, destination, crossing, commodity, weight, and whether the load can be transloaded or not is accomplished with drop-down menus. Lane frequency and start/stop dates have also been added to the functionality.
“Offering instant contracted pricing is truly revolutionary in every sense of the word,” said Forager founder and CEO Matt Silver in a statement. “This goes beyond just offering the same level of technology and service to cross-border shippers that domestic shippers already enjoy. No brokerage, tech company or 3PL anywhere is offering instant contracted pricing – domestic or otherwise.”
Why are cross-border rates volatile?
Silver has a sophisticated understanding of what drives price volatility in cross-border freight markets, honed by years of cross-border experience at Coyote Logistics. He said that produce season typically affects northbound (or outbound Mexico) rates because by increasing the demand for northbound trucks, it creates an imbalance in capacity. When many more trucks are needed to head north than head south, Mexican origin markets are starved of capacity and northbound rates become more expensive.
Another key factor is international trade in general, Silver explained, especially with regard to foreign exchange rates. The Mexican peso’s weakness against the dollar has discouraged Mexican firms from buying U.S. products, exacerbating the northbound-southbound volume imbalance.
Several customers are already using Forager’s contract rate tool and Forager expects steady adoption.
“The imbalance is getting worse and worse, and contract pricing is a good way to hedge against that,” Silver said.
Forager offers seamless visibility on transloaded shipments
One way that Forager manages cost volatility on its side is by building deep relationships with local cross-border trucking carriers in markets like El Paso, McAllen and Laredo and encouraging its customers to consider transloading rather than using a single carrier for a direct shipment from origin to destination. Transloading takes place when a U.S. carrier’s truck pulls into a crossdock near the border, the freight is taken out of the trailer and loaded into a new trailer, which is hauled across the border by a local cross-border carrier. Then a Mexican or Canadian carrier picks up the trailer and takes the freight to its destination.
“If a shipper can go from ‘direct’ to transloading, we get a little more flexibility in the network,” Silver said.
In other words, it’s easier to find a carrier in Laredo who can go to Monterrey than it is to find a carrier in Chicago who can go to Monterrey; capacity that is more fluid and flexible can normally be secured at prices closer to market rates.
But transloading introduces other complexities. Shippers in certain verticals like automotive don’t love transloading because another set of hands touching the freight introduces a new layer of risk and potential damage. Silver said that Forager worked with one shipper moving household appliances to find which specific commodities can be easily transloaded – it turns out that double-stacked washers and dryers were not suited for transloading, but refrigerators were.
Consistent visibility is another problem in cross-border freight that Forager has solved. Using project44, Forager offers 24/7 visibility for all legs of its freight movements. Shippers can use SCOUT to see where their freight is at all times and, just as importantly, which carrier (or tractor) is attached to the trailer containing their freight. Tracking the truck and trailer separately is crucial for maintaining seamless visibility during moves involving transloading, which can use three separate tractors and two trailers.
“We don’t just want to be a broker scooping up a lot of cross-border freight,” Silver said. “Ultimately we want SCOUT to be a command center that houses all cross-border freight movements. And once we expand to less-than-truckload and parcel, we’ll help customers consolidate their shipments and make capacity even more fluid.”