Freight-rating software has become an indispensable tool for shippers and 3PLs in a capacity-constrained world. But choosing the right system is more than just a matter of price.
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
It may seem a misnomer to label a $35 billion-a-year industry a "niche market." Yet that's how companies that provide freight rating software services describe their business. It is a specialized, albeit mature, field populated by relatively few vendors. As freight users across all modes seek to maximize their shipping spend in an environment of tight carrier capacity and rate increases, rate comparison tools and the companies that develop them have become increasingly important.
The basic function of freight rating software is to match a user's shipping and freight characteristics with a carrier's price and service offerings, enabling shippers and third-party logistics service providers (3PLs) to conveniently shop around for the best rates from multiple carriers. Freight rating tools are designed to optimize the headhaul and backhaul components of a shipper's network, and deliver the analytics that shippers need during lane-by-lane rate negotiations with their carriers. "There is a bit of work involved on the shipper's part, but anyone trying to hold the line on freight expenses should certainly investigate its use," said James A. Cooke, principal analyst at Nucleus Research Inc., a research firm.
Most vendors specialize in a certain mode. For example, Kewill, a U.K. firm with U.S. headquarters in Chelmsford, Mass., is particularly visible in parcel. DAT Solutions, based in Portland, Ore., has a strong presence in the truckload space. Peachtree City, Ga.-based SMC3, which has developed a rating product called "RateWare," focuses on the less-than-truckload (LTL) market.
Madison, Wis.-based RateLinx touts its software, called "ShipLinx," as mode-agnostic, meaning it doesn't try to shoehorn a user into a particular mode. In the company's view, situations arise when the traditional weight "breaks" that often determine modal choice don't apply, and a shipper whose load might seem best suited to parcel shipment could actually fetch a better rate moving via LTL. ShipLinx will identify those anomalies and suggest ways a shipper can better leverage its shipping spend, said Shannon Vaillancourt, RateLinx's founder and president.
RateLinx sells its software exclusively to shippers because it is built to disintermediate 3PLs from a process that shippers can manage on their own, said Vaillancourt. He has no qualms about the strategy, saying that most intermediaries already view his company as a cost center rather than a solution provider. Many third parties "don't understand technology, and they don't deploy it well," he noted. That said, some of the bigger freight brokers offer rating software engines within their transportation management systems (TMS).
By contrast, DAT sells its rating product, called "Rateview," to both shippers and 3PLs, according to Mark Montague, industry pricing analyst for the firm. With an estimated $53 billion spent each year by 3PLs to purchase truck transportation on the non-contract, or "spot," market, DAT sees an enormous opportunity to provide freight rating tools to help intermediaries navigate what has become a challenging landscape in the past two years, Montague said. For shippers, Rateview is important because spot rates are a reliable indicator of what truckload rates will look like when shippers begin negotiating contracts with their carriers, DAT said.
SMC licenses its RateWare product to carriers, shippers, and third-party logistics companies. However, the group avoids performing carrier rate comparisons because it wishes to remain neutral, said Brad Gregory, senior vice president of marketing and software alliances. Technology providers like Oracle Corp., SAP SE, MercuryGate, JDA Software Group Inc., and LeanLogistics represent the largest portion of Rateware's business. They use Rateware within their respective TMS suites, Gregory said.
SMC works to pair Rateware with a product called "CarrierConnect," which it developed around 2000 to supply detailed carrier and transit time information on lane segments chosen by users. The organization is beta testing an updated version of "CarrierConnect" that provides users with specific delivery dates rather than just a range, Gregory said.
St. Louis-based Cass Information Systems Inc., a freight bill audit and payment service provider that disburses $38 billion in annual freight payments on behalf of its clients, also doesn't sell its software, which is called "Ratemaker." Instead, Cass uses it to verify the accuracy of freight charges during the auditing process, according to Don Pesek, director, audit and rating services.
WHAT TO SHOP FOR
As for what goes into choosing a freight rating system, a first step is for a user to determine if the software's objective is to select carriers or to determine the lowest freight charges. A second is to gauge if the pricing will be available through a licensing agreement or on a "software as a service" basis. Beyond those two fundamental elements, experts said there are a number of common-sense factors that users should consider when shopping for a solution. Eileen W. Hart, vice president of marketing and corporate communications for DAT, said users need to determine if the data source is reliable and that the data stream is as real-time as possible.
Vaillancourt of RateLinx said prospective users should consider whether the software can meet their needs across all modes of freight. They should also investigate how frequently their vendor will update the information (ShipLinx is auto-updated weekly) and how much maintenance they would have to perform themselves, he said.
Pesek of Cass said that a freight rating system should interface with leading enterprise resource planning (ERP) systems like those offered by Oracle and SAP. A platform should also support global transactions, a key feature as more companies expand into international commerce. "The system should be able to handle multiple [foreign] currencies," said Pesek, whose company is updating its own legacy systems to manage more overall transactions and to build capabilities needed to handle complex international transactions.
Gregory of SMC3 said that large LTL shippers using a TMS should ensure that the freight rating software works with the LTL tariffs that the users utilize. Shippers should also opt for a program that can crank out rates at a rapid pace, Gregory said. This is especially important if the rating software will be used to support a network optimization initiative, an intensive and complex exercise that potentially involves the analysis of millions of rate and route combinations.
In addition, the freight rating technology should be compatible with the core technology apparatus a user has in place, Gregory said, adding that a user should not have to re-invent its technology wheel to accommodate rating software.
For small LTL shippers that move a relative handful of loads each day, week, or month, Gregory recommends a simple rating program such as the one offered by Kansas City-based Freightquote.com, which was acquired late last year by C.H. Robinson Worldwide Inc., the Eden Prairie, Minn.-based freight brokerage and 3PL giant. A provider like Freightquote can give mom-and-pop users the rate comparisons they need without the cost of a full-fledged TMS, he said.
Editor's note: An earlier version of this story incorrectly stated that RateWare was not made available to shippers and carriers. It is licensed to those parties. DC Velocity regrets the error.
A move by federal regulators to reinforce requirements for broker transparency in freight transactions is stirring debate among transportation groups, after the Federal Motor Carrier Safety Administration (FMCSA) published a “notice of proposed rulemaking” this week.
According to FMCSA, its draft rule would strive to make broker transparency more common, requiring greater sharing of the material information necessary for transportation industry parties to make informed business decisions and to support the efficient resolution of disputes.
The proposed rule titled “Transparency in Property Broker Transactions” would address what FMCSA calls the lack of access to information among shippers and motor carriers that can impact the fairness and efficiency of the transportation system, and would reframe broker transparency as a regulatory duty imposed on brokers, with the goal of deterring non-compliance. Specifically, the move would require brokers to keep electronic records, and require brokers to provide transaction records to motor carriers and shippers upon request and within 48 hours of that request.
Under federal regulatory processes, public comments on the move are due by January 21, 2025. However, transportation groups are not waiting on the sidelines to voice their opinions.
According to the Transportation Intermediaries Association (TIA), an industry group representing the third-party logistics (3PL) industry, the potential rule is “misguided overreach” that fails to address the more pressing issue of freight fraud. In TIA’s view, broker transparency regulation is “obsolete and un-American,” and has no place in today’s “highly transparent” marketplace. “This proposal represents a misguided focus on outdated and unnecessary regulations rather than tackling issues that genuinely threaten the safety and efficiency of our nation’s supply chains,” TIA said.
But trucker trade group the Owner-Operator Independent Drivers Association (OOIDA) welcomed the proposed rule, which it said would ensure that brokers finally play by the rules. “We appreciate that FMCSA incorporated input from our petition, including a requirement to make records available electronically and emphasizing that brokers have a duty to comply with regulations. As FMCSA noted, broker transparency is necessary for a fair, efficient transportation system, and is especially important to help carriers defend themselves against alleged claims on a shipment,” OOIDA President Todd Spencer said in a statement.
Additional pushback came from the Small Business in Transportation Coalition (SBTC), a network of transportation professionals in small business, which said the potential rule didn’t go far enough. “This is too little too late and is disappointing. It preserves the status quo, which caters to Big Broker & TIA. There is no question now that FMCSA has been captured by Big Broker. Truckers and carriers must now come out in droves and file comments in full force against this starting tomorrow,” SBTC executive director James Lamb said in a LinkedIn post.
The “series B” funding round was financed by an unnamed “strategic customer” as well as Teradyne Robotics Ventures, Toyota Ventures, Ranpak, Third Kind Venture Capital, One Madison Group, Hyperplane, Catapult Ventures, and others.
The fresh backing comes as Massachusetts-based Pickle reported a spate of third quarter orders, saying that six customers placed orders for over 30 production robots to deploy in the first half of 2025. The new orders include pilot conversions, existing customer expansions, and new customer adoption.
“Pickle is hitting its strides delivering innovation, development, commercial traction, and customer satisfaction. The company is building groundbreaking technology while executing on essential recurring parts of a successful business like field service and manufacturing management,” Omar Asali, Pickle board member and CEO of investor Ranpak, said in a release.
According to Pickle, its truck-unloading robot applies “Physical AI” technology to one of the most labor-intensive, physically demanding, and highest turnover work areas in logistics operations. The platform combines a powerful vision system with generative AI foundation models trained on millions of data points from real logistics and warehouse operations that enable Pickle’s robotic hardware platform to perform physical work at human-scale or better, the company says.
Bloomington, Indiana-based FTR said its Trucking Conditions Index declined in September to -2.47 from -1.39 in August as weakness in the principal freight dynamics – freight rates, utilization, and volume – offset lower fuel costs and slightly less unfavorable financing costs.
Those negative numbers are nothing new—the TCI has been positive only twice – in May and June of this year – since April 2022, but the group’s current forecast still envisions consistently positive readings through at least a two-year forecast horizon.
“Aside from a near-term boost mostly related to falling diesel prices, we have not changed our Trucking Conditions Index forecast significantly in the wake of the election,” Avery Vise, FTR’s vice president of trucking, said in a release. “The outlook continues to be more favorable for carriers than what they have experienced for well over two years. Our analysis indicates gradual but steadily rising capacity utilization leading to stronger freight rates in 2025.”
But FTR said its forecast remains unchanged. “Just like everyone else, we’ll be watching closely to see exactly what trade and other economic policies are implemented and over what time frame. Some freight disruptions are likely due to tariffs and other factors, but it is not yet clear that those actions will do more than shift the timing of activity,” Vise said.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index indicating the industry’s overall health, a positive score represents good, optimistic conditions while a negative score shows the inverse.
Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.
Broken into geographical regions, the European Union has a robot density of 219 units per 10,000 employees, an increase of 5.2%, with Germany, Sweden, Denmark and Slovenia in the global top ten. Next, North America’s robot density is 197 units per 10,000 employees – up 4.2%. And Asia has a robot density of 182 units per 10,000 persons employed in manufacturing - an increase of 7.6%. The economies of Korea, Singapore, mainland China and Japan are among the top ten most automated countries.
Broken into individual countries, the U.S. ranked in 10th place in 2023, with a robot density of 295 units. Higher up on the list, the top five are:
The Republic of Korea, with 1,012 robot units, showing a 5% increase on average each year since 2018 thanks to its strong electronics and automotive industries.
Singapore had 770 robot units, in part because it is a small country with a very low number of employees in the manufacturing industry, so it can reach a high robot density with a relatively small operational stock.
China took third place in 2023, surpassing Germany and Japan with a mark of 470 robot units as the nation has managed to double its robot density within four years.
Germany ranks fourth with 429 robot units for a 5% CAGR since 2018.
Japan is in fifth place with 419 robot units, showing growth of 7% on average each year from 2018 to 2023.
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."