Transfix, the New York City-based digital freight brokerage, Tuesday morning announced the release of Fleet Planner, a free web-based fleet management tool designed for small and midsize carriers. Fleet Planner is Transfix’s first foray into a pure software product separate from its freight marketplace, where it automates the matching, pricing and tracking of truckload shipments.
The problem that Fleet Planner solves for is well-known: Dispatchers and owners of small fleets often lack the tools to manage their assets effectively. Working from paper, whiteboards and multiple phones — “using Excel puts you in the top quartile,” according to Drew McElroy, Transfix’s founder and chairman — small and midsize fleets are consumed by day-to-day tasks and struggle to gain clarity into the economics of their own business.
“To make this work, we designed Fleet Planner as a fully stand-alone product,” McElroy said. “They can use this and never move the load for us — it’s designed to stand on its own two feet and add value for free to these carriers.”
With Fleet Planner, carriers can easily view their fleets and gain an immediate calendar overview of all current and upcoming loads, add loads and assign them to drivers and push load details to drivers via text messages. McElroy said that the first version of Fleet Planner includes the features that Transfix believes will be the most impactful immediately. Fleet Planner was built so that adding more sophisticated features that could calculate operating ratios and fuel taxes would be relatively easy.
“These carriers are a unique community that has to be treated properly,” McElroy said. “We’re trying to be as straight-up as we possibly can: This is a free tool that will add value and increase your ability to get your end goal, whether that is maximizing income or asset utilization. At the end of the day, Fleet Planner is in the service of moving the trucks where they need to be for the most revenue, and we can help with that also. As we come to market, Fleet Planner stands alone as a way for carriers to organize themselves. The goal is to make a scoreboard measuring the results of the game most effectively — we can win that sort of competition against anyone.”
McElroy explained why it makes sense for Transfix to release a free software product for small and midsize carriers. Part of Transfix’s business model, and its strategy for driving liquidity in its freight marketplace, is to lower shippers’ rate per mile but raise carriers’ revenue per tractor per week through asset utilization gains. In practice, that often means demonstrating to a fleet manager that accepting a rate 10 cents per mile lower, for example, can be better for his carrier’s business if the load comes with many fewer empty miles.
The issue is that the typical six-truck fleet does not have a good measure of its empty miles or its revenue per total miles, McElroy said, making Transfix’s value proposition too abstract. With Fleet Planner, even if carriers never move a load with Transfix, they can begin closing the data gap and measure their fleets’ performance in a rigorous way.
“Providing the tool allows us to work with the businesses more effectively,” McElroy said. “Talking to a carrier or dispatcher about total trip dollars in a week instead of rate per mile is not the easiest conversation. Driving a deeper integration with these folks and understanding their businesses better is a potential side benefit and one of the synergies we see.”
Freight brokerages have always relied on gathering information about freight markets and carriers to price freight and match loads, whether that information was gained through phone calls and manually entered notes in a transportation management system or through data automatically collected from carrier behavior. Recommending relevant, attractive loads to a carrier — to the right carrier — depends on understanding that carrier’s business.
“Our carriers can do whatever they want; it’s their business,” McElroy said. “A carrier might like to run back and forth between New York and Chicago over and over. But a triangular route between New York, Memphis and Chicago would give them two headhauls and one backhaul instead of a 1-1 ratio — and 17% more revenue. Now maybe there’s a reason why they aren’t doing that, but the more deep and holistic view of these things we get, the better suggestions we can provide.”
Offering an update on the current freight market, McElroy said that Transfix was in a great position to be nimble and help its customers adapt to rapidly changing conditions like the closure of a distribution center due to a COVID-19 outbreak or unprecedented demand patterns. He said that in 2019’s soft market, onboarding new customers and growing volumes with them took a fair amount of time, but that has all been accelerated in 2020’s tight market.
McElroy said that “crosswinds” including high unemployment and unusual consumer spending on goods had broken historical data patterns and that the supply-and-demand balance of freight markets was no longer governed by normal dynamics.
“We’re being dictated to by biology — the tail is wagging the dog,” McElroy said. “The counsel I find myself giving is to think about your partnerships and the long term. The real winner is when all get a little more strategic, look a little bit further out than one load at a time and try to optimize the network.”