The evolutionary load board

Silicon Valley-based startup Trucker Path has moved from a Waze-type approach to trucker navigation to connecting loads with carriers via its marketplace app.    Load boards have long been the de facto way for trucking companies to marry their available capacity with cargo from freight brokers and shippers.
   Meanwhile, the development of online marketplace platforms in consumer areas like retail, entertainment, taxis, hotel and air travel have shaken up the way those and many other industries function.
   The question is whether such neutral online marketplaces have a place in the domestic freight world. Or perhaps, more pertinently, whether those online marketplaces are essentially glorified load boards.
   A number of regional, or mode-specific, marketplaces have cropped over the past few years to try to mimic the momentum of consumer platforms like Amazon and Uber. But many of these have limitations – either not enough capacity, not enough buyers, or mismatched supply and demand.
   Then there’s the issue of whether companies want to engage in securing freight capacity without a traditional “relationship” supporting the transaction.
   What is becoming clear, however, is the idea of freight marketplaces gradually gaining traction in that they unlock both hidden sources of capacity for shippers and brokers, and unlock new potential customers for carriers.
   A sign of the progress of these internet-age load boards is the development of Trucker Path, a Silicon Valley-based technology provider of trucking applications. The company announced earlier this week that its Truckloads app has been downloaded 100,000 times since its launch in April.
   Truckloads allows brokers and shippers to post available loads and carriers to post available capacity. The difference between Trucker Path’s app and a traditional load board is the technology that underlies it, deputy chief executive officer Olga Balusova said in an interview with American Shipper this week.
   “Right now, it’s a load board with better technology,” she said. “The future is a truly automated load board – that’s the target.”
   Trucker Path, like many technologies being developed for the trucking industry by startups, more established software companies, brokers and 3PLs, is attempting to arm smaller carriers and cargo owners with tools to better connect.
   Large enterprises, both on the carrier and shipper side, are more likely to have robust procurement technology. However, smaller shippers still overwhelmingly rely on phone and email to secure capacity for their more sporadic loads. Similarly, smaller carriers spend significant time and resources hunting for loads that match their coverage area.
   The goal of marketplace technologies is to expand the load board concept from analog bulletin boards to dynamic capacity databases. This is not to suggest that online load boards are not themselves getting more sophisticated. For instance, the most prominent online load board, offered by DAT Solutions, stitches together a network of individual load boards and is seen as the go-to place for carriers and brokers to connect. But the technology startups aiming to shake the model up are aiming more for an analytics-based Expedia model.
   “We’ve examined the whole process of hauling a load, and we’re looking first at the biggest inefficiencies and automating those, and then we’ll move to the smaller inefficiencies,” Balusova said.
   Trucker Path gained traction not by plopping a marketplace app into the industry and expecting carriers to gravitate toward it. Instead, it developed support tools for truckers that mirror what Waze does for non-commercial drivers. Its initial app focused on providing truckers with crowd-sourced navigation tools. For instance, the app allowed users to get real-time parking availability and weigh station locations, all leveraging data provided by users.
   The app delivers 360,000 updates per week.
   In March, Trucker Path released Truckloads, and use of that app has grown steadily since, with 100,000 carriers having downloaded it. The app targets small carriers and independent owner/operators. Of those who have downloaded it, Balusova said about 60,000 are regularly using it each month.
   On the buy side, Truckloads is being used by roughly 400 companies, primarily brokers. The platform is processing 70,000 to 80,000 loads per day on weekdays, she said.
Brokers and shippers can book with carriers through Truckloads in one of two ways. They can post a load and see which carriers looked at it, with some basic vetting capability embedded in the platform. Or they can see where carriers have available capacity and reach out the carriers directly.
   Balusova said Trucker Path’s initial focus is to not try to monetize transactional volume through its platform, an issue that has befallen other marketplaces in the recent past. Instead, the company is using the $21 million in funding it has received from investors to build critical mass, while looking at other revenue opportunities, like truck stop advertising on its apps.
   Trucker Path is far from alone in trying to change trucking procurement processes. Other startups, like Convoy and Transfix, and more established marketplace platforms like uShip, are similarly trying to create neutral platforms that connect carriers and shippers through modern technology stacks. Not everyone believes these marketplace-oriented providers will succeed.
   “These ‘marketplaces’ contain mostly spot shipments – meaning freight that is typically last-minute or loads that incumbent carriers have rejected,” Robert Nathan, CEO of Chicago-based LoadDelivered Logistics wrote in an April commentary for American Shipper. “With short lead times and irregular requirements, this type of freight can be extremely risky, especially for smaller carriers. On the shipper side, sourcing capacity from a spot environment leaves them highly susceptible to pricing fluctuations and unpredictable capacity, making it difficult to forecast efficiently.”
   Two primary questions underlie the future of marketplaces: is there room for relationship-oriented brokers and 3PLs and next generation load boards, and will shippers’ and brokers’ procurement cycles change in the years ahead to the extent that dynamic capacity sourcing becomes strategic and not transactional?
   “It’s a hard industry to disrupt,” Balusova said. “We want to partner with brokers that are open to technology and want to scale their business. We also work with bigger brokers who want to tap into our amazing carrier case.”
   And that’s a key part of the value proposition for most marketplaces – providing a way to expand the size of the known market on both sides of the equation, not necessarily to disintermediate the established brokerage industry.
   For instance, brokers can use filters in the Trucker Path platform to only work with a select group of carriers (perhaps ones with which they already have relationships, or perhaps only ones where they don’t have existing connections). From the carrier perspective, a trucker that has traditionally only worked in a specific region might be able to see loads outside his or her region that appeal to them because they can also see if there are backhauls available.
   Balusova, who comes from a transportation consulting background at Ernst & Young, said Trucker Path has purposely been measured in its development curve.
   “We’re taking a step-by-step approach to make this easier for everyone.”