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How technology can help secure capacity in a driver-constrained market

  (Photo: Shutterstock)
(Photo: Shutterstock)

In the midst of the driver shortage and a growing economy, technology can be invaluable to brokers at third-party logistics providers working to secure reliable capacity for their customers. FreightWaves and Trucker Tools teamed up to examine the role technology can play in retaining carriers and reassuring shippers during a webinar earlier this week.

The webinar, dubbed “Securing Reliable Capacity in a Driver-Constrained Market,” featured Trucker Tools CEO Prasad Gollapalli and Jeff Henderson, senior vice president of operations for Ryan Transportation Services.

Thanks to the current state of the industry, Gollapalli said brokers at 3PLs are being affected by a storm of factors that make matching carriers to loads more time-consuming. These factors include tighter capacity, a growing economy, inefficient processes and the highly-discussed driver shortage.

“There is 4% unemployment, and I think we all know being a truck driver may not be the most popular job. I think [the driver shortage] is going to continue to be a big part of the industry. I’m not sure there’s ever a full solution to it,” Henderson said. “We have definitely seen a growing economy, and in 2018 we saw record levels of pricing. For capacity utilization, I’ve heard anywhere from 90-95%.”

  FreightWaves SONAR chart depicting 3.9% unemployment rate.
FreightWaves SONAR chart depicting 3.9% unemployment rate.

When it comes to inefficient processes, Gollapalli said using multiple sources with no accurate or real-time data to find available trucks, making too many calls to get a load covered and one load wonders are the biggest culprits.

He estimated that 80-90% of qualified carriers end up falling into the one load wonder bucket. These are carriers that work with a 3PL to deliver one load, then immediately move on to a different 3PL.

“Last year that was especially true. With our company being around for 33 years, I was amazed at the number of new carriers we would set-up on a daily basis, but we did see a lot of new trucks coming into the market,” Henderson said. “We sensed a lot of owner-operators were moving away from the larger carriers to pick up their own authorities, and I think a good portion of that was because they were seeing dollar signs.”

Henderson values calls as a relationship-building tool, but he does hate wasted calls. He described wasted calls as calls that do not move the relationships forward, like calling load boards just to find out that posted trucks are out of market or inbound calls from carriers just to check prices and move on.

“I’m of the mindset that there are never too many calls because calls definitely build relationships. I love technology, and I love the new things that are going on in the industry, but I still have a little bit of an old-school mentality,” he said. “You need to have a good mix of both that and technology. A good phone call can solve a lot of problems. What I don’t like are wasted calls.”

Henderson said one of his team’s biggest challenges is getting their arms around their entire 40,000+ carrier network and identifying the relationships with the most potential to flourish. Part of that is knowing where a carrier is going next and if his team can seize the opportunity to reload a truck after it drops a load. This requires a certain amount of technology to run smoothly.

He also finds technology particularly useful when it comes to retaining customers.

“Our goal is to retain customers and be able to provide them with the technology that an asset-based carrier could provide, like tracking,” Henderson said. “The greatest thing in the world is to be able to tell a customer when there is a problem before they call you and tell you there’s a problem. With new technologies, we are alerted faster and able to contact the customer faster.”

Gollapalli knows that the human touch is important, but he also believes technology like Trucker Tools’ Smart Capacity can improve and simplify the process of moving freight.

“While technology will only be part of the solution, we believe our technology will provide you what you will require for achieving your goals while you are committed to solving those major hurdles that come your way,” he said.

Smart Capacity is a cloud-based carrier capacity and relationship management software for 3PLs to connect better with their carriers and grow their network. The platform focuses on keeping carriers in a broker’s network for repeat business and eliminating calls that are wasting time by providing accurate tracking information.

“In addition to matching loads with capacity, the platform also has other automated tools. While we truly understand that the technology can never replace the human element, there are a lot of things the technology can do that humans would take a long time to do,” Gollapalli said. “For example, most brokerages receive hundreds of emails from carriers every single day. Our team has built an email parsing engine within our platform that automatically reads those emails, verifies if trucks are still available and matches with available loads from the broker’s database.”

Henderson said features like email parsing help his team cut down on inefficiencies and focus on the more important work of relationship-building.

“Those emails start to become white noise around the office,” he said. “There are so many of them received on a daily basis. This is one of my favorite pieces of the platform.”

Henderson anticipates that, while 2019’s numbers may not have the same wow factor as 2018’s, the freight market will remain strong. This time, he hopes to be more proactive than reactive, and integrating technology helps him do that.

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Ashley Coker, Staff Writer

Ashley is interested in the opportunities and issues that arise at the intersection of law and technology. She is the primary contributor to the truckloadindexes.com news site content. She studied journalism at Middle Tennessee State University and worked as an editor and reporter at two daily newspapers before joining FreightWaves. Ashley spends her free time at the dog park with her beagle, Ruth, or scouring the internet for last minute flight deals.
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