If you are a freight broker or a prospective freight broker, you should be seeing green right now, recognizing a deep well of market opportunity not only in 2022, but also over the next 5-10 years. The imbalance of supply and demand is very evident, and shippers are increasingly relying on brokers and 3PLs to manage their freight and moving away from working directly with road carriers.
That means billions – probably hundreds of billions, maybe even – of dollars in transportation spend to freight brokers in the years to come.
To illustrate the point: in the past two years alone, the amount of truck freight in North America moving through brokers has grown from about 10-12% on average per year to almost 20% the last year. This trend is here to stay, with ever-increasing freight demand, which means the percentage equates to more and more loads.
In early February, White House port envoy John Porcari said he viewed current cargo volumes as a floor for years to come – not a ceiling. If he is right, the brokerage market will likely become one of the fastest growing sectors in the entire US economy.
However, haste is wasteful, and now is the time for freight brokers and 3PLs to position themselves to take on new customers, build their carrier base, and figure out how to scale their operations to meet this demand and capitalize on the sea of opportunity they’re adrift.
Without the right digital tools, especially a robust TMS platform that can scale with your operation, integrate with your shippers’ tools, and seamlessly find capacity between freight modes, brokers will leave ripe profits on the table for their competitors to take advantage of.
From finding customers and retaining staff in a highly competitive landscape, to offering new services, expanding modes and maintaining a network of truckers, the modern freight broker simply cannot not survive on a simple rate sheet, a few Excel files, and a well-worn iPhone.
Meet the demands of the modern market.
In today’s brokerage market, no two days are alike and client needs change from minute to minute. Additionally, with the swelling brokerage market, logistics providers need to be able to add new customers efficiently and cost-effectively. Technology has long been seen as optional, not mandatory, on these fronts.
This is no longer the case.
To acquire, support and onboard new customers, manual procedures simply no longer work. Attracting new customers manually can bog down operations and bypass vital support in today’s market by properly integrating systems with shipping customers and other third parties, such as truck carriers.
In addition, to adequately serve customers and be competitive in today’s brokerage market – but especially in tomorrow’s market – the ability to scale quickly, to find capacity at a reasonable price with a certain level automation and searching among freight modes to keep shippers moving freight, brokers need the right tools. Those who have it will serve their senders and attract new customers. Those who don’t will erode their own ability to compete.
Attract and retain good employees.
Every business in every industry is trying to solve the pressing problem of finding, hiring, and keeping the right people so their business can run efficiently and continue to serve customers.
It’s getting harder and harder to retain employees if you don’t give them the right tools and technology to do their jobs. For those trying to retain talent with a heavy, outdated, and inefficient tech stack, you’re creating pressure for your employees to leave and find an organization that invests in those areas.
Additionally, people want to feel the rewards of the work they do, and part of that is supporting customers in a way they find effective and happy with. All stakeholders get the best support and service, especially your employees.
Placing scalable technology at the heart of brokerage.
The problem of access to technology that plagues small and medium brokerages has all but disappeared. So does the time it takes to set up new platforms and integrate them into your current operations.
What took months of painful and frustrating setup now takes weeks, if not days. Additionally, the upfront cost of platforms has become accessible to brokerages of all sizes, as has their total cost of ownership.
Adopting platforms like modern transportation management systems is no longer just about ROI or streamlining processes. It’s not just a part of your business – it’s now the heart of your business.
Dollar cost is obviously an important part of this equation. But by viewing technology and digital solutions as core, essential components of your business, you are redefining cost as a revenue opportunity. You realize what it means for your business, your people and your customers to be flexible and grow, create new revenue opportunities and remain a viable competitor in this growing market.
Paul Brady is the CEO of 3Gtms.