The disintermediation of truckload transportation looks vastly different from that of other industries. While the buying and selling of a financial asset is completed at the time of transaction, with trucking, the transaction is only the beginning. Quite literally, the rubber must hit the road for the cargo to arrive on time and intact at its end destination.
“While the pricing and the procurement activity might look and feel commodity-like, unlike commodity trading, these orders have to be fulfilled in the real world,” said Lily Shen, CEO of digital brokerage and logistics software company Transfix, in an interview with FreightWaves’ Andrew Cox at the 3PL Summit.
Given the fact that the industry’s success hinges on human relationships working within complex networks, freight technology leaders like Transfix first consider how to best serve the relationships at stake for a carrier or shipper in order to then build the right tech solution.
“This is an industry with people at the heart of it all: the drivers, dock workers, facility coordinators and everyone that helps move freight across the world,” said Shen. “You have to start with the people and with their experience, their pain points and their challenges. When you have that level of understanding, you are able to build technology to empower everyone on the front lines to deliver a better experience.”
Given that 3.5 million truck drivers carried 11.84 billion tons of freight in 2019 — three quarters of all freight moved in the U.S. — pursuing efficiency through technology will have a huge payoff. But because 97% of the truckload carriers in the U.S. are small and midsize businesses that don’t have the personnel or budget to build or conceive tech solutions themselves, often these companies still rely on spreadsheets and notepads to survive the day-to-day minutiae. Transfix sees itself as a long-term partner to both these smaller carriers and the shippers they haul for.
Josh Cohen, senior product designer at Transfix, leveraged the relationships he created and the time he spent studying the unique bottlenecks of small carriers to build Fleet Planner, a free online tool that helps carriers secure the best loads, centralize their fleet management activities and stay solvent.
“I met a dispatcher named Michelle who also owns her trucking company,” said Cohen. “Like a lot of small business owners in trucking, Michelle is the only dispatcher at her company. So on top of running her business, it’s her job to dispatch drivers, find their next loads, negotiate rates with brokers and help drivers solve problems they encounter on the road. In her words, it’s like trying to put together a puzzle when the pieces are constantly changing. It became so much to handle that she scaled back her fleet from 16 drivers to only seven.”
Michelle’s company became one of the carriers that Cohen’s team interviewed and visited before building Fleet Planner to ensure the solution addressed the root causes of the carrier’s biggest pains and frustrations. While ultimately, Fleet Planner would help Michelle rescale her fleet of drivers back to 16 (and growing), the initial interview process allowed the design team to learn one clear area of potential streamlining for countless carriers: data unification.
“Time and time again, dispatchers told us how hard it was to make quick, well-informed decisions when their data lived in so many places across paper records, spreadsheets and single-purpose software like ELD or GPS apps,” said Cohen. “We saw an opportunity to help dispatchers keep track of their loads and driver schedules all in one place so they can plan loads with speed and confidence.”
Understanding customer preference is a huge advantage when building solutions. For example, because dispatchers and drivers prefer to communicate over text message rather than have to download another app, Cohen’s team made sure that the Fleet Planner app allowed dispatchers to easily send loads and updates via text.
Similarly, to create efficiency solutions for shippers, Transfix leverages its relationship with them to understand the current processes around transportation procurement and spending. One shipper, for instance, took an entire month collecting the data required to simply know how much the company spent on transportation that quarter.
“We asked them how they do it right now and learned that they manually email each of their carriers to ask how much they paid that carrier. We promptly designed an analytics solution where we showed total spend and trends within the TMS. Now, it’s a solution that many shippers value to better understand their value prop.”