Cleveland, Ohio recently hosted the FreightWaves, Future of Supply Chain (FOSC) conference. This much-anticipated event brought together a cross-section of logistics professionals, all keen to explore the changing terrain of the freight industry.
Denim was one of 24 technology innovators attending FOSC giving demonstrations on their software and services. We had the privilege of interacting with freight and logistics leaders and influencers who provided incredible insights into their operations approach, challenges, and the overall supply chain landscape.
In the current freight market, characterized by tight budgets and narrowing margins, the topic of investing in freight technology took center stage. The pivotal question on everyone's mind: is investing in freight technology a smart move right now? The answer, intriguingly, is a resounding "yes, but…". This nuanced response sparked extensive exploration into when and how freight technology plays a role in the industry this year.
Tech Talk: David Stone on the Role of Technology in Freight Brokerage
The FreightWaves, Future of Supply Chain opened with an enlightening Check Call interview with Mary O'Connell and David Stone from Ryder. David remarked that contrary to the common practice of cutting technology costs in a down market, investing in technology can be a game-changer. His golden rule for assessing technology stacks is simple - if technology can increase the efficiency of your staff, it justifies its price tag.
David stressed the purpose of technology in freight brokering is to "remove non-value add tasks." For example, an agent manually entering data from your TMS to your factoring partner is not adding value to your customer. Technology can outsource these tasks to free up agents.
A vital aspect David emphasized during the interview was the need to consult employees on which technologies are truly beneficial and which are no longer needed. He noted, "While every freight brokerage might have 14 - 20 technology licenses, they're not utilizing all of them." This observation suggests that leadership gains tremendously by connecting directly with ground-level agents, honing in on technologies that can eliminate tasks that don't bring additional value to their customers.
In closing, David's counsel for present-day freight brokers is critically evaluating potential technology partners. He urges them to come to product demos armed with specific issues and give consideration to partners who respond with authentic solutions rather than scripted answers. This approach underscores the importance of fostering a relationship based on transparency and true collaboration.
Grading the Game Changers: A Fireside Chat on Digital Transformation
The FreightWaves, Future of Supply Chain saw an engaging discussion on the essential role of technology in freight operations between industry expert Craig Fuller and Peter Rentschler, CEO of technology consulting firm Metafora. In a unique approach, they graded each emerging technology sector on its implementation. Here's their verdict!
Transportation Management Systems (TMS) barely scraped through with a C-, mainly attributed to inadequate training and haphazard implementation procedures. Peter emphasized the common mistake decision-makers make in selecting a TMS that fulfills rudimentary needs but needs to consider the distinct freight movements of each brokerage or company. He regularly suggests that his clients conduct a process map exercise to understand their unique workflow. Subsequently, they can customize the platform to optimize workflow with the fewest clicks possible. Peter asserts that this often overlooked, essential step could significantly boost operational efficiency.
In stark contrast, digital freight matching platforms emerged as the toppers, earning an A. Their ability to assemble scattered data, structure it, and present it in a manner that provides actionable insights won them the top spot.
The category with the most volatility was payments, characterized by swift changes and intricate dynamics. The payments field is wide, ranging from entities primarily focused on factoring fees to those delivering top-tier operational products embedded within these fees. Peter suggests the latter approach can provide freight brokers with a substantial competitive advantage. The grades in this category varied widely, reflecting the diversity of experiences among Peter's clients; some occasionally felt constrained by their payments platform due to strict factoring terms. Nevertheless, Peter praised certain high-performing entities that earned A grades for their commitment to empowering brokers, exhibiting an entrepreneurial zeal that aims for broker success.
Brokerage BFFs: Technology and Operations
Zach Jecklin, the Chief Information Officer at Echo Global Logistics, and Jay Gustafson, the EVP of Brokerage Operations at Echo, openly discussed their strategic use of data to enhance customer service and fortify partnerships.
Jay veered from industry norms in a sector typically resistant to embracing technology. He declared, "Technology and data have improved our staff's capabilities and accelerated their learning process." He highlighted a crucial turning point where, thanks to technology, his team shifted focus from routine tasks to building relationships.
Zach and Jay delved into a critical debate in freight technology: the choice between building or buying. When contemplating purchasing, the Echo team places high importance on API access, which Zach credits for modernizing their technology stack. Echo also assesses whether the off-the-shelf technology resolves a specific problem. If it's a common industry challenge, they advise buying since there's likely a provider or several offering efficient solutions. However, the Echo team leans towards building their own solutions for unique internal or company-specific issues.
FreightWaves Future of Supply Chain Summary
FreightWaves Future of Supply Chain Conference emphasized how the right technology investments can distinguish between merely surviving and thriving in this market. While the industry has come a long way in embracing and leveraging technology, there is still an opportunity for further efficiencies and growth.
Through sessions and several discussions, it became clear that it's not enough just to have freight technology licenses anymore. Freight brokerages and logistics companies must develop detailed selection criteria and invest in implementation. Integrations and open APIs were the buzzwords of the conference. With the right partners, transparency, and a focus on implementation, the 'future of supply chain' has immense promise and potential.
The FreightWaves Future of Supply Chain conference offered a glimpse into freight technology's current state and the industry's endless possibilities. We are truly thankful for the opportunity to connect with so many freight brokers and industry partners, each conversation a chance to delve deeper into the intricacies of the market. We are looking forward to the next big event - F3: The Future of Freight Fest in Chattanooga, until then.