They say you should never let a good crisis go to waste, and freight brokers have taken that to heart during the pandemic. Amid the turmoil, many prioritized software and technology upgrades that could help them continue delivering for shippers and carriers. Now they’re reaping the rewards.
How Software Automation Helps Freight Brokers Form Better Partnerships
The supply chain has spent years fostering digital capabilities, driven by the mass migration of transportation management systems (TMS) to the cloud, an influx of venture capital, and the arrival of digital digital freight apps such as Uber Freight and Convoy. However, the onset of COVID-19 made the benefits offered by the cloud not only irresistible — but essential. For example, the pandemic's continuous and unpredictable disruptions made it difficult for freight brokers to strategize. By adopting cloud-based TMS platforms, brokers have gained more visibility into their operations. They can record every shipment detail, often in real-time, and use that data to inform future loads and lanes. Similarly, explicitly made for freight brokers, digital financial platforms grant increased financial oversight. Solutions like Denim's put brokers in command of their cash flow with factoring and managed collections options. Automated invoicing streamlines billing for shippers, and QuickPay keeps carriers happy with timely payments. Increased visibility and better process control provide a competitive advantage for brokers in any economic environment. With insightful data, brokerages can act as strategic partners to shippers and carriers. The efficiency of digital platforms also makes connecting shippers and carriers simpler so that both parties get what they want from brokers. These aspects point toward the ultimate benefits of automated solutions for freight brokers, which include:
- Delivering all-around improved experiences to shippers and carriers
- Gaining the ability to step up existing partnerships
- Attracting new business
- Boosting overall revenue
- Optimizing employees’ time
Some smaller brokers have even found that the right technologies can help them compete with more prominent names in the industry in terms of service level and capabilities.
Every Broker Can Be a Digital Broker
Over the last few years, the digital transformation of the supply chain has given rise to an entirely new category of brokers: digital freight brokers. The digital freight brokerage movement began with companies such as Convoy, Transfix, and Uber Freight, which use self-service digital marketplaces to match shippers with carriers. While many shippers still prefer the contract rates and dedicated service of traditional freight brokers, the rise of digital freight options has had some interesting repercussions. Notably, conventional freight brokers have invested more in technology to continue outcompeting the new digital players. This trend is perhaps best illustrated by increasingly frequent partnerships between brokers and TMS providers. By tightly integrating their platforms, brokers and TMS providers can match the speed and convenience of digital brokerage options without losing the benefits of working with a traditional freight broker. "The lines between a digital broker and an incumbent, more traditional broker are blurring…a year from now, they will be indistinguishable," said Tim Higham, CEO of AscendTMS, in an interview with Supply Chain Dive. As those lines continue to get muddier, freight brokers who made technology investments and formed vital partnerships early will have a significant advantage over those who held back.
Are You Ready for the Digital Future of Freight Brokers?
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 predictive algorithms matching carriers with loads and 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 help grow your credit and help build your business, we'd love to talk.