Across the spectrum of logistics brokers, there are a variety of tools being used to find capacity and manage carriers. From startups to public-traded goliaths, 3PL’s are attacking the same problem in different ways. Traditionally, this is a budget issue. The more money you make, the more you can invest in technology. New brokers start small, and they gradually insert 3rd-party tools. At the upper echelon of transportation, billion-dollar companies employ thousands of software developers. Regardless of the toolkit available, the issues of capacity procurement and carrier management remain the same. Let’s compare the ways that brokers use software to find capacity and manage carrier networks.
Startups use spreadsheets
There are thousands of small brokers with less than 20 employees and less than $5mm in revenue. Unless you begin with financial backing, likely your company must get by with free or very inexpensive software. The most common applications that fit this category are Google Sheets and Microsoft Excel. Google Sheets is very popular because it is easy to share on the Internet. However, the security of this app is very low. Therefore, it can easily be hacked, and your data copied or stolen. Even without a security intrusion, neither of these options are a safe place to store important information. Anyone with access can copy and paste the data. They can take it when they leave or send it to a friend. On the plus side, Google Sheets is free, and Excel is easily attainable with an annual subscription to Microsoft Office.
Midmarket brokers utilize off-the-shelf B2B software solutions
As brokers increase in size, the complexity of their operations increases. Adding a branch office means employees are no longer co-located. Using the Chicago model, carrier sales is spun off from sales. Growing beyond 20 employees to 50 or more makes communication more difficult. Therefore, midmarket brokers start to utilize off-the-shelf B2B software solutions to manage and share data. In the area of capacity procurement and carrier management, few choices are available. FreightFriend, Parade, and Trucker Tools are the most viable options at this point in time. These procurement solutions range in functionality, but all offer technology more sophisticated than spreadsheets. The cost is not free. Customers pay monthly subscription fees and sign up for annual contracts. However, the productivity increases and savings from using load boards more than make up for the investment.
Large companies employ their own technology staff to build proprietary software
The top 5% of the market builds much of their own software. Companies like CH Robinson have IT staffs over 1,000 employees. These architects, developers, and data scientists work to enhance the value of their company by creating proprietary technology. Many of these companies have replaced their 3rd party TMS with their own unique version. They can layer on additional functionality across the entire value chain of the shipment. However, some of these entities still employ off-the-shelf solutions. Many large companies choose to incorporate 3rd party vendors that specialize in specific fields and connect via API's. Project44 and Macropoint are examples of B2B software implemented for tracking. Most of the largest brokers have a proprietary CRM, and they are constantly adding apps to enhance it. This applies to capacity procurement and carrier management as well. Therefore, FreightFriend and companies like it are still attractive partners for companies at the top end of the market.
Contact FreightFriend for Capacity Procurement and Carrier Management
FreightFriend is a data-powered truckload procurement solution that helps shippers, brokers, and carriers build and manage relationships in a trusted ecosystem and match the right capacity to the right freight. Reach out to us here at FreightFriend to learn more about our relationship-based approach to digital freight matching. Make procurement your competitive advantage.