The Role of Relationships in Automated Brokerage
Q: Recently we have seen an emphasis on technological tools working towards an "Uber for trucking" model. Is this achievable in the brokerage industry?
A: To answer this question, let's first clarify the analogy itself—Uber for trucking. Nowadays, companies are setting out to entirely automate the brokerage process by better connecting the brokerage firms with their shippers and carriers to maximize both the carrier's capacity and the broker's margins.
Simply put—yes. This is achievable.
A: There obviously is no one-size-fits-all solution to take on the intricacies and irregularities of our market. Brokerage is a complex industry that requires utmost attention to detail and the ability to control things that are seemingly out of control.
The key to automating such a complex equation lies in relationship building.
For customers with whom the brokers are still growing their business relationship, they'll naturally need to take a more manual approach. When the customer needs a load hauled, the broker will need to dialogue with the shipper somewhat extensively to ensure all the nitty-gritty details are clear and covered. This is a two-way street, as the customer will continually develop rapport with the broker and trust them to do what they expect without asking.
The same can be said for developing relationships with carriers. It takes time and persistence before you can truly rely on a carrier. For carriers that the broker does not frequently work with, it is key to be proactive and use whatever means necessary to ensure the customer's freight arrives safely and timely. However, once this reliance has been established, it can make the job of both the carrier and the broker exponentially easier.
Eventually these relationships with certain shippers and carriers become deeply entrenched, allowing the broker to utilize a more hands-off approach.
Q: What can brokers do to take advantage of these relationships?
A: Once these relationships are established, brokers can truly take advantage of the "Uber for trucking" tools.
One powerful form of automation taking place in the brokerage process is the use of EDI and API. Loads can be sent electronically from a customer directly into the broker's TMS for them to accept or reject without picking up the phone or sending an email. Once accepted, status updates and invoices to the customer or from the carrier are transmitted automatically. By having key load information seamlessly communicated back and forth between the broker and the shippers, brokers have newly acquired free time in their day and also less room for data errors.
Customer and carrier portals serve as extensions to the broker's TMS. Now, trusted carriers can make status updates on all of their active shipments on their own, add available equipment into the broker's system, accept available loads, upload their own documentation, and even self-invoice. Through the customer portal, the broker can give their customers the ability to enter their own loads, view and accept rate quotes, check real-time status updates on their active shipments, and view unpaid invoices and documentation.
In summary, as the broker strengthens relationships with carriers and customers, the door to an automated brokerage process opens up.