Freight Broker in the Digital World
The freight brokering industry has been around for many years. New brokering companies come and go, and not much changes in the industry. Freight brokers are the link between the shipper and the carrier. However, digital freight brokerage companies, such as Uber and Power2Ship, are revolutionizing the industry.
Digital freight brokering, otherwise known as digital freight matching (DFM), is not an entirely new concept. Power2Ship has been using this structure since the early 2000’s, but with new technological advances, the DFM market is expanding. A digital freight matching company uses software, such as mobile applications, to increase efficiency of matching shippers to carriers.
As with anything new, digital freight brokerage has its drawbacks. In order to develop the software, DFMs will need an initial investment. Once the company is up and running, there are some logistic hurdles to overcome as well. Rental car companies can instantly match a customer to a vehicle because that vehicle is usually sitting in the lot vacant, but in the trucking world, freight trailers don’t sit around the lot empty. They are constantly being used. Being able to match a shipper to a carrier that is currently busy with another shipment is difficult. Another downside with digital freight brokerage is sourcing truck drivers. Unlike social ride sharing apps, DFMs have to get drivers that are already hauling freight. That narrows the market significantly.
There are advantages to digital freight brokerage. The biggest advantage is saving time. A driver can find and book new loads quickly. This can prevent truckers from having to run empty from one city to the next. Another perk of digital freight brokerage is that drivers will be able to choose which application will be the best for them. They can compare features such as API mapping integration and instant payments.
The outlook of digital freight brokerage companies is still unknown; no one company has developed software that can overcome all the hurdles and meet the users expectations. DFMs may change the future in the freight brokering industry. In the meantime, LOGISTIQ will still be servicing traditional freight brokers through our Broker Shield Insurance program.