Digital or not, brokerages rely on people. But the growth of digital freight-matching (DFM) platforms like Uber and Convoy is forcing small to midsize brokers to compete by starting their own technology programs and rethinking traditional human labor.
But considering that DFM platforms can flood $200 million into their technology, competing is a daunting prospect for smaller firms.
Hubtek, a staffing and technology company, hosted a webinar with FreightWaves to discuss automation opportunities for smaller brokers. Joel McGinley, co-founder and a 38-year industry veteran, said the average transportation company faces the spiking cost of labor, putting pressure on margins and forcing some smaller companies out of the industry.
“What small to midsize brokers need is a partner that understands their business and can efficiently and affordably provide technology to compete,” said McGinley. “We do not believe that the digital broker is ultimately going to replace those traditional brokerages. What the digital broker is going to do is force the traditional brokerages into automation, which is all about streamlining operations to increase the productivity per person.”
Nearly half of a broker’s tasks can and should be automated, McGinley and Scott Hadley, strategic sales consultant at Hubtek, shared in their presentation. With automation comes speed and accuracy, so a 45% addition of automation could improve an organization’s efficiency by 70%.
Automation removes the emotion and irregularity behind certain tasks like rate quoting, order entry, track and tracing, and back-office document management. By automating these tasks, brokers can focus on relationships with carriers and customers.
“Even digital brokers have relationships with their customers and their carriers,” said McGinley. “They’re augmenting and supplementing those relationships with technology to stay connected. They’re increasing the touch points through automation, but at the end of the day, it still is a relationship business.”
The average traditional freight brokerage generates around $700,000 to $1 million of revenue annually. Multiply that figure five or six times for the revenue created by digital brokers, which utilize artificial intelligence (AI) to make decisions, read trends, make adjustments as data changes and provide real-time tracking and detention monitoring for customers. The competitive advantage of this partnership comes with the digital broker’s ability to commit and make changes instantly.
Introduce Hubtek’s digital worker TABi into your network
Hubtek’s digital worker TABi utilizes robotic process automation (RPA), AI and machine learning capability, all while leveraging a company’s existing network and technology.
Recently, a brokerage handling 200 loads a day hired TABi to help receive orders that came in by email, text and the website. Two full-time workers were spending four minutes per entry and costing the company $91,000. Six weeks after deploying TABi, four minutes became 60 seconds or less.
The company will pay $20,000 the first year, but that cost will decrease in the years following and the company will be able to save $75,000. The two full-time employees were not eliminated but reassigned to more revenue-producing and customer-facing tasks.
TABi can also use machine learning to tackle requests for quotes, back-office tasks (accounts payable and receivable) and spot market pricing. Imagine pressing one button embedded in a spreadsheet that immediately calculates quotes for all lanes.
McGinley said there’s no other developer out there that has built the digital stack and platform Hubtek has with TABi, combining RPA, AI and machine learning.
“Customers now need tech-forward brokers to partner with,” said Hadley. “They’ve got to have that confidence that you’re able to pivot. Right now, in order to pivot quickly, you’ve got to have the backing of technology. Customers are looking for this.”