• DATVF.SEALAX
    1.307
    0.018
    1.4%
  • DATVF.VNU
    1.527
    0.024
    1.6%
  • DATVF.PHLCHI
    0.967
    0.014
    1.5%
  • DATVF.VWU
    1.734
    0.046
    2.7%
  • DATVF.ATLPHL
    1.723
    0.013
    0.8%
  • DATVF.LAXDAL
    1.591
    -0.014
    -0.9%
  • DATVF.DALLAX
    0.969
    0.055
    6%
  • DATVF.VSU
    1.280
    0.020
    1.6%
  • DATVF.CHIATL
    2.008
    -0.016
    -0.8%
  • DATVF.VEU
    1.566
    0.004
    0.3%
  • DATVF.LAXSEA
    2.162
    0.074
    3.5%
  • ITVI.USA
    10,355.900
    24.070
    0.2%
  • OTRI.USA
    8.250
    0.160
    2%
  • OTVI.USA
    10,373.890
    23.230
    0.2%
  • TLT.USA
    2.600
    -0.020
    -0.8%
  • WAIT.USA
    158.000
    8.000
    5.3%
  • DATVF.SEALAX
    1.307
    0.018
    1.4%
  • DATVF.VNU
    1.527
    0.024
    1.6%
  • DATVF.PHLCHI
    0.967
    0.014
    1.5%
  • DATVF.VWU
    1.734
    0.046
    2.7%
  • DATVF.ATLPHL
    1.723
    0.013
    0.8%
  • DATVF.LAXDAL
    1.591
    -0.014
    -0.9%
  • DATVF.DALLAX
    0.969
    0.055
    6%
  • DATVF.VSU
    1.280
    0.020
    1.6%
  • DATVF.CHIATL
    2.008
    -0.016
    -0.8%
  • DATVF.VEU
    1.566
    0.004
    0.3%
  • DATVF.LAXSEA
    2.162
    0.074
    3.5%
  • ITVI.USA
    10,355.900
    24.070
    0.2%
  • OTRI.USA
    8.250
    0.160
    2%
  • OTVI.USA
    10,373.890
    23.230
    0.2%
  • TLT.USA
    2.600
    -0.020
    -0.8%
  • WAIT.USA
    158.000
    8.000
    5.3%
BusinessNewsTechnology

McGuigan: Transplace optimizes networks in a dynamic, live environment

The freight tech renaissance transforming the transportation and logistics industry has been fueled by venture capital-backed technology startups and private equity-backed rollups, but according to Frank McGuigan, chief executive officer of Transplace, it’s a tale of two cities.

New entrants and well-capitalized incumbents are experimenting, transforming themselves, and pushing the industry forward, raising the bar on price transparency, visibility and service. But smaller and mid-sized legacy players are struggling to keep up in a shifting competitive landscape.

McGuigan’s vantage point at Transplace has allowed him to work with all kinds of logistics partners, observe their progress and measure their efficiency. Transplace is a Dallas-based fourth-party logistics provider (4PL) whose core businesses are automated transportation management and software, though it also has a freight brokerage. In 2020, $10 billion of freight will flow through Transplace’s platform, managed by only about 1,500 people.

Transplace pools freight from shippers and capacity from carriers and third-party logistics providers (3PLs), optimizing across its entire network, which allows Transplace to create capacity, drive down costs for shippers and improve asset utilization for carriers. 

In a telephone conversation, McGuigan discussed the current state of transportation and logistics technology as well as the progress made over the past 20 years and where Transplace fits into that broad narrative. McGuigan was impressed by the best-in-class digital freight brokerages and was optimistic that they could achieve profitability when it becomes necessary.

“First of all, Uber and Convoy are very different animals [from other digital brokerages],” he said. “Those folks, I believe, are trying to build a business that’s here to stay; other folks are building businesses to get sold. They are betting on the fact that high degrees of service combined with slowly getting rates back to market will generate the profit they need. With the volatility we’ve seen in the last 18 months, it could be a flick of a switch – if the relationships are there.”

The technology opportunity in the freight brokerage space as McGuigan sees it is driven by “a significant buy/sell delta which funds a lot of manual work, and you’re dealing with the lowest common denominator carrier. It’s totally ripe for technology enablement.”

Transplace has been at the center of that technology renaissance, but the company sees the space from the perspective of the digitized shipper. At Transplace, it began more than a decade ago with automated shipment planning and execution, proprietary technology that receives orders, plans a shipment, tenders it and follows up. Prior to that, in the 1990s, automated routing guides replaced physical copies that were distributed to all of a shippers’ facilities, back when transportation managers were making individual decisions on awarding freight.

Then EDI allowed automated updates from carriers; shippers became more sophisticated about optimization and began adding reverse auction models to their bid processes. Finally, the industry entered a stage when 4PLs like Transplace are engineering collaboration, McGuigan explained.

“Say we have 10 customers and I can see where they overlap,” McGuigan said. “I’m engineering continuous moves and trying to program algorithms to optimize the entire network in a layer above the shipper.”

The biggest difference in the past five years, McGuigan said, is that Transplace has evolved from a tool – a transportation management solution – to a platform. If a freight brokerage is merely an aggregator and re-seller of trucking capacity, and a management transportation provider is a network executor, Transplace is now also a technology aggregator, especially in its Control Tower product, an end-to-end visibility and exception management portal.

The goal is to provide “velocity, precision, transparency and visibility at the best possible cost,” McGuigan said.

He also described Network Services in greater detail, explaining how Transplace conceived of all of its shipper and carrier relationships as one vast network.

“If you’re a platform services or managed transportation customer, all orders flow through the network services layer,” McGuigan said. “The goal is to give shippers network-level optimization and improve the operating ratio of carriers. It involves consolidating less-than-truckload carriers and identifying pool points and modal shifts. We have a virtual dedicated fleet that runs inside of it, running at a fixed cost per mile. Five years ago, we were terrific at optimizing in a live environment at the shipper level and engineering cross-network optimization in the rears. Since then we’ve invested in two AI companies, and we get orders three, five, seven days in advance to build these things out and do live optimization at the network level.”

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John Paul Hampstead, Director, Passport Research

John Paul conducts research on multimodal freight markets and holds a Ph.D. in English literature from the University of Michigan. Prior to building a research team at FreightWaves, JP spent two years on the editorial side covering trucking markets, freight brokerage, and M&A.

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