OnTheRoad Photo: Sean Kilcarr/American Trucker

Where freight brokers can benefit

Opportunity may come knocking for freight brokers in 2018, if they adapt to the technological changes going on in trucking.

There’s been a feeling of late that, with all the advances being made in “Uber for freight” technologies, the role of the freight broker with be diminished or even eliminated altogether from the transportation chain of the near future.

But Eytan Buchman, vice president of marketing for Freightos – a freight price indexing firm that works with global logistics companies – doesn’t see it that way at all.

While there’s certainly been and “influx of technology” in trucking, which is putting the industry “in the crosshairs of disruption,” he also believes shippers such as Amazon will keep building their own asset-based transportation networks to haul their own freight – and will often need help keeping those assets busy.

“This could spark a surge of opportunity for freight brokers looking to diversify their revenue streams – but only those paying attention to the prospects will take the lead,” Buchman noted.

Here are some of those areas where freight brokers can benefit:

  • Control the Supply Chain: Freight brokers need to expand their suite of value-added services. Some, by shifting to the role of asset owners, expand control and avoid profit erosion. In other words, brokers may need to seek more responsibility for the majority of a shipment’s transport from manufacturing to the retail shelf.
  • Winning Digital Hearts and Minds: The importance of digital transparency in freight transactions has been steadily gaining traction. Modern business customers shop on Amazon Business at work while purchasing personal goods via Amazon at home. Their expectation for digital freight visibility is no different. As a result, savvy brokers are expanding their “technology stack,” providing more insights and on-demand information to users, using digital service to stick out in a crowded market.
  • First and Last Mile Delivery: Global air and ocean carriers are shift towards direct-to-small-shipper sales model. In order to control the land legs, they will likely buy or partner with outstanding freight brokers and/or truckers. And account like Maersk could be a huge boon for their business as they expand into the emerging digital freight ecosystem. This is the ideal opportunity for freight brokers looking to expand their service partners – and to maintain their relevance as on-demand retail booms.
  • Sharing Marketplace vs. More Value: From Uber and Convoy to Transfix, the past two years has seen the rise of dozens of ‘Uber for Freight’ models that have caused a stir among proponents of the sharing economy. When successful, these modes can improve capacity allocation. Combined with autonomous trucks, which simultaneously lower operating expenses, brokers will be pushed to provide more value to their customers in the battle for market retention.  As travel agents discovered in the “Era of Expedia,” freight brokers will need to identify what the sharing marketplace is missing and offer a viable alternative to shippers who need their shipments. There will surely be a financial outlay as companies will have to try out new ideas and try to shake up the sharing economy. But the cost will certainly be worth it in the long-run.

As freight and logistics evolve at a pace unseen in history, participants in every step of the supply chain – including brokers – ought to be paying attention for the threats and opportunities that await them, warned Drew McElroy, CEO of Transfix, a freight brokerage technology platform provider.

“You can’t just be like an ostrich and ignore this – the world is changing,” he stressed. “It’s the unstoppable march of progress. For a long time trucking largely was insulated from it. But now it has turned very, very quickly.”

 

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