A successful freight brokering business relies on access to the most relevant data and identifying the most lucrative shipping mode, loads, and movements. According to a past FreightWaves article, “Over the past few years, large digital freight brokerages (DFBs) backed by venture capital have emerged in the global transportation and logistics industry. Although in North America startups like Convoy, Uber Freight and Transfix dominate media coverage of DFBs, incumbents C.H. Robinson, J.B. Hunt, and others have made large investments in technology to digitize their brokerage operations.” However, digital capabilities are not solely applicable to freight brokerages. Third-party logistics providers (3PLs) and freight forwarders can also use applied data to improve resource allocation and maximize profitability.
Applied freight data will inherently lead to brokers, 3PLs, and forwarders to work with more carriers and shippers. Using advanced systems and application programming interfaces (APIs), freight management parties increase their bookings’ total volume. In turn, they are better able to offer value-added services, such as auditing and accounting, to ensure past performance aligns with expectations. In other words, these entities can prove their value on the fly and build more collaborative, transparent relationships, explains Emma Cosgrove via Supply Chain Dive.
In the modern supply chain, the timeliness and accuracy of freight data are essential to profitability. Working with outdated data or even missing minor aspects of the data stream can make a disastrous decision. However, real-time access to data-driven freight analytics’ insights can open the door to predicting market fluctuations before they occur. As a result, freight brokering parties can isolate markets where the trucking rate is likely to drop, reducing the effect that such deviations will have overall profitability.
Capacity management is about knowing where trucking assets available. Carriers use holistic freight market data to put those assets in the right regions and lanes. Moving capacity and drivers into the most lucrative markets is essential to maximizing backhaul opportunities for carriers and reducing the risk of freight tender rejections for brokers looking to put loads in those available trucking assets.
The shipping industry needs
a new metric – the Market Rate –
to end the spot vs contract battle
Frontline freight brokerage workers often have moments to decide on whether to accept a shipper’s bid or eat the cost in favor of maintaining a strong carrier relationship. The delicate balance between brokers and their respective clientele, including both carriers and shippers, derives from this function. As a result, frontline freight brokerage employees may lack the physical resources to assess full market conditions and provide the most competitive rate at a moment’s notice. However, connecting freight brokering platforms with an innovative freight forecasting platform, such as FreightWaves SONAR, provides that granular level of detail without necessarily navigating into another system. For instance, SONAR subscribers may ingest data via an API into their workflow which provides a load score that guides each broker with insights into the core metrics affecting all lanes and their respective origins and destinations.
Since freight brokerages operate independently of shippers and carriers, creating a competitive advantage in the space means accessing the most relevant data and applying it accordingly. In turn, such brokering service providers can provide the most competitive freight market rates to their respective clients. That will have the natural benefit of reducing tender rejections, improving freight movements’ timeliness, and lowering the risk of stockouts for their shipper customers. At the same time, carriers are more likely to offer more lucrative discount freight rates to brokerages that bring more freight. The simple principle behind this capability starts with using digital technology to transform quoting processes into a turnkey activity and maximizing bookings. Additionally, 3PLs and freight forwarders that can better understand market rate conditions are better prepared to reenter bidding cycles, revise service levels, and more.
Across the spectrum of freight management parties, successful digital freight management hangs on the principle of faster, informed decision making. Brokers, forwarders, and 3PLs, whether asset-based or working to become the elusive 4PL, can become more valuable and reduce the risk of rejected tenders by applying the right data. Freight data can turn at a moment’s notice. And the sooner freight brokering processes reflect that volatility, the better off service providers will be. Of course, it all further depends on the ability to apply that data in real-time and not merely look back with a could-of, would-of, should-of attitude. Stop working in the dark ages of antiquated freight data. And be part of the solution by learning how easy it is to connect and apply freight market data. Request a SONAR demo online to learn more about the potential ways to use freight data and improve profitability now.
