Freight brokerages were quick to adopt technology during record-setting COVID-19 demand.
But, the economy is in a very different place as we look towards 2023. Freight brokerages are facing plummeting spot rates, high inflation, and low consumer demand for goods.
Investing in freight broker technology, while previously an optional “nice-to-have”, is now paramount for success in 2023. Savvy freight brokerages are prioritizing technology to survive and even thrive in a soft market.
FreighTech is playing a crucial role in maximizing efficiency, enhancing customer service, and bolstering competitiveness for savvy brokers already like Direct Expedite and Scale logistics, and will continue to for years to come.
Improve Efficiency and Productivity with Automation
Anyone working in the logistics industry knows time is money.
Many brokerages were positioning their strategy for growth in 2023, but are now facing a reduction in personnel budget. In the absence of new employees brokers can rely on technology to boost productivity and efficiency within a team.
In fact, more than half (52%) of respondents in Denim’s Freight Brokerage Pulse Report indicated they are prioritizing increasing overall efficiency in 2023.
Automation and efficiency go hand-in-hand. Mundane tasks like creating and submitting invoices are ripe for automation. Freight brokerages are prioritizing automation technology to free up employee’s time for revenue-generating tasks while also boosting morale. Who really wants to be a data-entry machine?
Solutions like Denim streamline freight brokerages back-office operations through automation. With a single click from a broker’s TMS, Denim will invoice, collect, and pay contractors. Ultimately, the automation benefits shippers with consistent and timely billing, carriers with fast payments, and your staff with reduced data entry.
Why does it matter in 2023?
Lower consumer demand equals less freight. Winning freight will require more prospecting hours, a winning sales strategy, and a large focus on building lasting relationships. By automating mundane tasks, brokerages can shift their focus to provide the best customer service while freeing up staff for more business-critical needs.
Enhance Customer Service with Visibility Software
Customer service is what differentiates traditional freight brokerages from their digital counterparts. This is even more important in a shippers market. Customer service for brokerages means transparent communication with both shippers and contractors.
Knowing the status of shipments in real-time means everything for a brokerage. Freight visibility keeps customers informed while reducing time-consuming communications like check calls.
MacroPoint and Project44 are excellent examples of visibility platforms. Both platforms equip freight brokers with real-time updates on shipments and route information.
Brokers not only need to provide excellent customer service for their shippers, but also their preferred carriers. Shippers work with brokers with the largest and most reliable network of carriers.
Carriers are facing high diesel prices and maintenance inflation costs. Cash flow is tight right now. Freight brokers can keep carriers loyal and happy through transparent and fast payments.
Financial enablement platforms like Denim offer QuickPay at no cost for the brokerage. Freight brokers can choose to pay next-day at no cost or charge a quickpay fee to their contractors.
Additionally, Denim provides contractor onboarding and dashboard. Denim's onboarding collects payment and billing information from carriers in 3 simple steps. This eliminates the need for freight brokerages to manage or store sensitive information. After set-up, carriers can track payments and find proof of ACH on their own dashboard.
By providing these services, freight brokers can build trust, reduce carrier payment check calls, and provide a professional service to their carriers.
Why does it matter in 2023?
In 2022, the industry shifted from the carrier to a shipper market. Lower demand and a surplus of carriers means shippers have the opportunity to be more selective with their business. Providing a superior customer experience helps freight brokerages stand apart from the competition.
Staying Agile with Business Intelligence Tools
There’s no doubt 2023 will be a competitive year for freight brokers. Many expect the spot market will bottom out in the first or even in the second quarter, but only time can tell.
Instead of a crystal ball, freight brokerages rely on data to identify the most lucrative shipping mode, loads, and rates. Real-time data arms freight brokerages with the information needed to better respond to market fluctuations.
Through transportation management software freight brokerages can manage their operations more efficiently. The platform manages a brokerage's shipment tracking, route planning, and payments when integrated with a factor. Ascend, TAI, and EZ Loader are few examples of integrated TMS.
During times of uncertainty, freight brokerages need to keep an eye on important business metrics. Metrics like accounts payables, receivables, and profits can show the health of a business.
Freight brokers can integrate their accounting software with a payments platform to track financials. No calculator needed
Denim's Quickbook integration provides freight brokers with a Business Analytics Dashboard. The dashboard compiles data on jobs over time, average days sales outstanding (DSO), fastest-and-slowest-pay customers, most profitable customers, and most used contractors. These insights help freight brokerages optimize operations and make better business decisions.
Why does this matter in 2023?
Business intelligence tools help freight brokerage stay resilient in the face of uncertainty. Tracking trends and business health equip freight brokers with information to respond quicker to market changes and make data-driven decisions.
Are You Ready for the Growth of Freight Broker Technology?
Many exciting developments have come out of the supply chain's digital adoption trend, but this is just the beginning. Experts anticipate further developments, such as blockchain-based shipment tracking. Leading freight brokers are already investing in tech strategies to stay ahead of the curve.
Not sure where to start with your technology shift? Begin by pinpointing key opportunities to scale, reduce costs or improve profitability for your brokerage. The chances are that an enterprise software suite exists to help you achieve your goals.
If you're interested in learning more about how Denim can streamline your operations, we’d love to talk. Schedule a demo today!