FreightWaves is covering the Transportation Intermediaries Association (TIA) 2019 Capital Ideas Conference in Orlando, Florida. On Thursday morning, executives from technology companies in the space participated in a panel discussion titled “How Freight Tech Companies Can Help You Successfully Compete.”
Panelists included: Dave Halsema, vice president of global third-party logistics (3PL) sales at project44; George Abernathy of FreightWaves; Paris Cole, chief executive officer at Truckstop.com; Don Thornton, senior vice president of sales and marketing at DAT; Russell Jones, chief executive officer at Cargo Chief; and Jordan Graft, executive vice president of payment solutions at Triumph Business Capital.
A major theme was the shrinking technological and competitive gap between large 3PLs with technology development budgets and smaller and midsize players. DAT, Truckstop.com, FreightWaves, project44 and Cargo Chief all said they were committed to leveling the playing field by democratizing access to low-cost technology and data. Meanwhile, TriumphPay offers financial support to smaller brokers by quickly paying carriers and freeing up brokers’ capital.
Cargo Chief’s Jones, in particular, said that by adding his company’s Booking Assistant to AscendTMS, a cloud-based entry-level transportation management system (TMS) known as ‘the free TMS,’ Cargo Chief was delivering the kind of automated digital freight brokerage tool to small brokers that larger 3PLs spent millions of dollars developing.
The technology companies shied away from terms like ‘disrupt’ and ‘disintermediate’ and instead emphasized how they wanted to empower brokers by letting them spend more time generating revenue and building relationships.
“We don’t talk a lot about disruption,” Truckstop.com’s Cole said. “We talk about enabling and connecting parties within the industry, not disintermediating the relationships you have today. We are creating a neutral marketplace, in which you all can interact with your carriers and customers, and we can facilitate those relationships. Technology can do many things, but it can’t do all things. We don’t pretend to be able to do your job – we want to make it easier for you and allow you to do things you do well.”
“At DAT,” Thornton said, “we see this highly fragmented marketplace with hundreds of thousands of carriers. Our job is to do anything we can to bring those carriers to market.”
Jones commented, “3PLs add a lot of value. Whether a shipper has a transportation department or outsources, that expertise will always be necessary. We also see that when you manage a truckload shipment, it takes many more steps and is much more complex than taking someone to the airport, so we don’t think Uberization is going to happen in the way that people think.”
“We’re a highly regulated entity, so we have to ask permission from the regulators to do anything,” Graft joked. “A request to broker freight is never going to be approved.”
The conversation turned to the products and services that would be launched in the next three to five years, which prompted reflection on how far the industry has come. Haselma remembered when carrier checks were done via a pay telephone.
“The first essence of supply chain visibility,” Haselma said, gesturing to Abernathy, “was George running a load from L.A. to Portland. George calls collect and says ‘it’s George Chico, do you accept?’ No, we don’t accept, but now we know George is in Chico. I would love to know what it’s going to look like in five years – I think we all would.”
Abernathy said that he envisions further utilization of the now-ubiquitous smartphone, driving more data into phones, including decision-making products. The data available for decision support and optimization applications, Abernathy said, has come a long away, but the trick is delivering recommendations and actionable items to the right people at the right time.
“We see more standards around invoice presentment and standards around images,” Graft said. “Also settlement, giving brokers better tools for settling or proving the amount of carrier payment, will be more expedited and efficient.”
One of the final topics of the discussion revolved around whether the current quantity and quality of freight data available was sufficient to support machine learning.
“The quantity continues to rise,” Haselma said. “Quality is an ever-growing opportunity. How you get that information drives how it can become actionable. If you’re gathering data that is not good, or it’s not realtime – if there’s latency – it limits your ability to make it actionable. That’s something that we see as being very important.”
According to Cole, Truckstop.com thinks about data quality in four ways – “hygiene, accuracy, relevance and timeliness,” and tries to improve on all of those metrics.
“What’s happening currently is the most exciting part,” Abernathy said. “At FreightWaves we’re going beyond tender rejections and rates into commodities and behavioral data, and building algorithms that really go beyond anything that’s been done before.”
One audience member asked to what extent and why are small brokers at a structural disadvantage. The panel’s consensus seemed to be that a lack of capital could hurt growth and hinder the development of in-house technology, but those issues were actively being solved for by the companies on stage.
“The structural disadvantage has been getting lower and lower every year,” Haselma concluded.