Better together: Tech developers join forces to build a better freight-booking process
Software developers are increasingly integrating their transportation management systems with digital freight-matching apps. That could be good news for shippers and smaller truckers.
Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Freight markets have been roiled by the pandemic-driven recession in recent months, adding to long-term challenges like wide swings in capacity, driver shortages, and thin profit margins. But amid that turbulence, logistics software providers say they may have found a way to capture new efficiencies by integrating their transportation management system (TMS) platforms with digital freight-matching (DFM) apps.
The two software tools take different approaches to addressing those pain points, with TMS products offering a centralized hub of information, while DFM apps use a distributed web of smartphones to match shippers in need of freight service with truckers that can provide it. But the combination of the two can tap into the best of both worlds, according to several logistics technology vendors who have recently built such integrations.
TMS software, of course, has been around for decades, enabling shippers and third-party logistics service providers (3PLs) to find carriers and book loads. But the technology has never been more important than it is today, when users are increasingly relying on their TMS tools to reduce costs; improve internal productivity, efficiency, and customer service; increase visibility; and make better use of capacity, according to the research and analyst firm Gartner. Those factors are set to drive global spending on TMS applications to $1.94 billion by 2022, Gartner says.
In contrast, DFM mobile apps have emerged over the past five years, fueled by venture capital investment and the emergence of the smartphones now found in nearly every trucker’s pocket. Their premise is that matching carriers with shippers can be done more efficiently with artificial intelligence (AI) and digital networks than by human freight brokers relying on emails and phone calls.
CREATING A ‘ONE-STOP SHOP’
Now, in the latest iteration of freight technology tools, TMS and DFM providers are joining forces by building bridges between their platforms, saying they can speed up the contracting process by exchanging data instantaneously, thus creating marketplaces where shippers and carriers can find their perfect match.
“It’s about connecting the communities of carriers and shippers, both for contracted rates and for spot rates when you need additional capacity,” says Dave Lemont, vice president and general manager at Kuebix, a TMS vendor that announced in June it had integrated its software with DFM firm Loadsmart’s freight platform. As part of their collaboration, the developers created an application programming interface (API) that automatically provides live Loadsmart freight rates to any Kuebix user looking for a truckload spot quote.
Kuebix says the deal benefits its current customers by making its platform more of a “one-stop shop.” “Customers really want one place to manage all of their freight, [whether] they’re doing less-than-truckload (LTL), full truckload, international, or parcel. We don’t want to make people learn a second interface and print out reports from a second source. That’s why travelers go to Expedia to book plane tickets instead of visiting the American Airlines site only,” Lemont says.
The combined approach also helps the digital freight-matching providers, he adds. “DFMs have been approaching the TMS providers because capacity doesn’t do you any good without a shipper, and who has the shippers with loads to move? They want access to TMS platforms’ customers,” he says. “The fewer middlemen in the world, the better.”
Costa Mesa, California-based TMS vendor Teknowlogi shares a similar vision of a streamlined freight-matching process, citing that goal as one of the reasons it expanded its collaboration with the DFM firm Trucker Tools in February. The arrangement will provide Teknowlogi’s TMS customers with an improved predictive freight-matching and -booking process, let them secure available truck capacity faster, and “improve engagement” with truckload service providers, the firms said at the time.
“People look to our TMS because they are trying to get a lane covered as fast as possible [and do it] without leaving the TMS,” says Sean McGillicuddy, marketing director for Teknowlogi.
Historically, that task has been relatively simple in the LTL sector, which is dominated by a few large players such as FedEx Corp., UPS Inc., Estes Express Lines, Old Dominion Freight Line, and XPO Logistics Inc., McGillicuddy says. Those large carriers have the resources to build their own software and connect it to TMS platforms with the help of specialized software engineers. However, freight booking is much harder for shippers seeking capacity in the truckload sector, where as many as 90% of trucks belong to fleets of 10 or fewer vehicles, McGillicuddy says. That fragmented market makes it challenging to find carriers, commit to rates, and track loads.
By striking deals with DFM providers whose software apps have been downloaded by thousands of individual drivers, TMS vendors can instantly expand their customers’ access to those small fleets. “As these apps get more and more sophisticated, trucking companies’ adoption of them makes it possible for them to keep up with where the industry’s going, which is automation, shipment visibility, and AI,” McGillicuddy says.
Digital transformation initiatives have accelerated over the last few months, as shippers embrace flexible operations to keep up with shifting demand, Blue Yonder said in a press release announcing the partnership. The move ensures that shippers can tap into real-time services and a reliable capacity network, using a dynamic “pricing discovery” solution to obtain instant price quotes and book loads up to two weeks in advance, the company said at the time.
According to Blue Yonder, shippers and 3PLs often complain about the manually intensive freight-booking process. Offering access to carrier marketplaces—another term for DFM apps—can streamline the process by providing live rates and real-time capacity information at the outset, instead of forcing users to go through the usual routine of contacting their primary carriers, then defaulting to their backup carriers, and finally resorting to the expensive spot market.
That improved procedure can be particularly valuable for smaller shippers that lack the resources that are available to their larger competitors, says Keith Whalen, vice president of product management at Blue Yonder.
“We have a wide variety of shippers and 3PLs, ranging from large manufacturers and retailers and some of largest 3PLs around the globe, to shippers that don’t necessarily have these huge freight spends,” Whalen says. “So we saw an opportunity to offer access to marketplaces, dynamic rates, and capacity, especially for those smaller users without an annual upfront procurement cycle.”
BRIGHT SPOT IN DARK TIMES
The recent flurry of partnerships between established TMS developers and DFM startup firms will benefit all of the parties in the freight-booking process, the companies say.
By providing broad access to shared information, the enhanced offerings can expedite the process of matching shippers in need of freight service with truckers that can provide it. At the same time, they automate what has traditionally been a labor-intensive activity and create one-stop shops where users can complete multistep tasks on a single platform, according to the vendors.
And their timing couldn’t be better. Arriving in an era when the coronavirus pandemic is exerting unprecedented pressure on participants throughout the supply chain, those improvements could be a welcome change for shippers and carriers alike.
Nearly one-third of American consumers have increased their secondhand purchases in the past year, revealing a jump in “recommerce” according to a buyer survey from ShipStation, a provider of web-based shipping and order fulfillment solutions.
The number comes from a survey of 500 U.S. consumers showing that nearly one in four (23%) Americans lack confidence in making purchases over $200 in the next six months. Due to economic uncertainty, savvy shoppers are looking for ways to save money without sacrificing quality or style, the research found.
Younger shoppers are leading the charge in that trend, with 59% of Gen Z and 48% of Millennials buying pre-owned items weekly or monthly. That rate makes Gen Z nearly twice as likely to buy second hand compared to older generations.
The primary reason that shoppers say they have increased their recommerce habits is lower prices (74%), followed by the thrill of finding unique or rare items (38%) and getting higher quality for a lower price (28%). Only 14% of Americans cite environmental concerns as a primary reason they shop second-hand.
Despite the challenge of adjusting to the new pattern, recommerce represents a strategic opportunity for businesses to capture today’s budget-minded shoppers and foster long-term loyalty, Austin, Texas-based ShipStation said.
For example, retailers don’t have to sell used goods to capitalize on the secondhand boom. Instead, they can offer trade-in programs swapping discounts or store credit for shoppers’ old items. And they can improve product discoverability to help customers—particularly older generations—find what they’re looking for.
Other ways for retailers to connect with recommerce shoppers are to improve shipping practices. According to ShipStation:
70% of shoppers won’t return to a brand if shipping is too expensive.
51% of consumers are turned off by late deliveries
40% of shoppers won’t return to a retailer again if the packaging is bad.
The “CMA CGM Startup Awards”—created in collaboration with BFM Business and La Tribune—will identify the best innovations to accelerate its transformation, the French company said.
Specifically, the company will select the best startup among the applicants, with clear industry transformation objectives focused on environmental performance, competitiveness, and quality of life at work in each of the three areas:
Shipping: Enabling safer, more efficient, and sustainable navigation through innovative technological solutions.
Logistics: Reinventing the global supply chain with smart and sustainable logistics solutions.
Media: Transform content creation, and customer engagement with innovative media technologies and strategies.
Three winners will be selected during a final event organized on November 15 at the Orange Vélodrome Stadium in Marseille, during the 2nd Artificial Intelligence Marseille (AIM) forum organized by La Tribune and BFM Business. The selection will be made by a jury chaired by Rodolphe Saadé, Chairman and CEO of the Group, and including members of the executive committee representing the various sectors of CMA CGM.
The global air cargo market’s hot summer of double-digit demand growth continued in August with average spot rates showing their largest year-on-year jump with a 24% increase, according to the latest weekly analysis by Xeneta.
Xeneta cited two reasons to explain the increase. First, Global average air cargo spot rates reached $2.68 per kg in August due to continuing supply and demand imbalance. That came as August's global cargo supply grew at its slowest ratio in 2024 to-date at 2% year-on-year, while global cargo demand continued its double-digit growth, rising +11%.
The second reason for higher rates was an ocean-to-air shift in freight volumes due to Red Sea disruptions and e-commerce demand.
Those factors could soon be amplified as e-commerce shows continued strong growth approaching the hotly anticipated winter peak season. E-commerce and low-value goods exports from China in the first seven months of 2024 increased 30% year-on-year, including shipments to Europe and the US rising 38% and 30% growth respectively, Xeneta said.
“Typically, air cargo market performance in August tends to follow the July trend. But another month of double-digit demand growth and the strongest rate growths of the year means there was definitely no summer slack season in 2024,” Niall van de Wouw, Xeneta’s chief airfreight officer, said in a release.
“Rates we saw bottoming out in late July started picking up again in mid-August. This is too short a period to call a season. This has been a busy summer, and now we’re at the threshold of Q4, it will be interesting to see what will happen and if all the anticipation of a red-hot peak season materializes,” van de Wouw said.
The report cites data showing that there are approximately 1.7 million workers missing from the post-pandemic workforce and that 38% of small firms are unable to fill open positions. At the same time, the “skills gap” in the workforce is accelerating as automation and AI create significant shifts in how work is performed.
That information comes from the “2024 Labor Day Report” released by Littler’s Workplace Policy Institute (WPI), the firm’s government relations and public policy arm.
“We continue to see a labor shortage and an urgent need to upskill the current workforce to adapt to the new world of work,” said Michael Lotito, Littler shareholder and co-chair of WPI. “As corporate executives and business leaders look to the future, they are focused on realizing the many benefits of AI to streamline operations and guide strategic decision-making, while cultivating a talent pipeline that can support this growth.”
But while the need is clear, solutions may be complicated by public policy changes such as the upcoming U.S. general election and the proliferation of employment-related legislation at the state and local levels amid Congressional gridlock.
“We are heading into a contentious election that has already proven to be unpredictable and is poised to create even more uncertainty for employers, no matter the outcome,” Shannon Meade, WPI’s executive director, said in a release. “At the same time, the growing patchwork of state and local requirements across the U.S. is exacerbating compliance challenges for companies. That, coupled with looming changes following several Supreme Court decisions that have the potential to upend rulemaking, gives C-suite executives much to contend with in planning their workforce-related strategies.”
Stax Engineering, the venture-backed startup that provides smokestack emissions reduction services for maritime ships, will service all vessels from Toyota Motor North America Inc. visiting the Toyota Berth at the Port of Long Beach, according to a new five-year deal announced today.
Beginning in 2025 to coincide with new California Air Resources Board (CARB) standards, STAX will become the first and only emissions control provider to service roll-on/roll-off (ro-ros) vessels in the state of California, the company said.
Stax has rapidly grown since its launch in the first quarter of this year, supported in part by a $40 million funding round from investors, announced in July. It now holds exclusive service agreements at California ports including Los Angeles, Long Beach, Hueneme, Benicia, Richmond, and Oakland. The firm has also partnered with individual companies like NYK Line, Hyundai GLOVIS, Equilon Enterprises LLC d/b/a Shell Oil Products US (Shell), and now Toyota.
Stax says it offers an alternative to shore power with land- and barge-based, mobile emissions capture and control technology for shipping terminal and fleet operators without the need for retrofits.
In the case of this latest deal, the Toyota Long Beach Vehicle Distribution Center imports about 200,000 vehicles each year on ro-ro vessels. Stax will keep those ships green with its flexible exhaust capture system, which attaches to all vessel classes without modification to remove 99% of emitted particulate matter (PM) and 95% of emitted oxides of nitrogen (NOx). Over the lifetime of this new agreement with Toyota, Stax estimated the service will account for approximately 3,700 hours and more than 47 tons of emissions controlled.
“We set out to provide an emissions capture and control solution that was reliable, easily accessible, and cost-effective. As we begin to service Toyota, we’re confident that we can meet the needs of the full breadth of the maritime industry, furthering our impact on the local air quality, public health, and environment,” Mike Walker, CEO of Stax, said in a release. “Continuing to establish strong partnerships will help build momentum for and trust in our technology as we expand beyond the state of California.”