Transportation and logistics are always under construction. Changing consumer demands, economic swings, legislative reforms – the challenges require constant navigation. Technology’s ability to meet today’s challenges and anticipate tomorrow’s needs represent one of the only constants in supply chain evolution. As the industry continues to enter new territory, technology provides the guidance and paves the way for where transportation is headed next.

The Three C’s
It’s been a bit of a wild ride in transportation and logistics across the last 24 months. When we think about the major challenges in front of us, we can really put them into three major categories that I like to call the “Three C’s” – capacity, clocks or time, and cash flow.

On the capacity front, we’re currently sitting about 50,000 drivers short. Carrier utilization has consistently hovered between 98-103% utilization. Between 2017 and 2018, loads to trucks increased by more than 29%.

Of the capacity we do have, it’s highly fragmented, with about 97% of for-hire carriers comprising fleets of 20 trucks or less.

Normally, to capitalize on a carrier-favored market, fleets would flex up using independent contractors, but with more than $700 million awarded from independent contractor misclassification lawsuits in recent years, fleets are understandably hesitant to leverage an independent contractor model, or to grow the one they already have.

Further compounding the problem is that trucks are only logging about 6.8 productive hours per day. Miles traveled per day also has decreased between 10-20% due to things like the implementation of electronic logging devices (ELDs), redistributions of shipper networks, and overall congestion and traffic.

Therefore, to increase capacity, fleets are paying drivers more. Driver pay has increased by about 12%, which is pushing freight rates higher. By the close of 2018, rates increased around 10-15% with another 5% increase anticipated for 2019.

To combat rising rates, shippers are extending pay terms to improve working capital. More than 40% of shippers pay carriers in 30 days or more. Of the top 1,000 US companies, average days to pay suppliers sits at 57. This creates a major capital and cash flow challenge for carriers.

These challenges collectively are what’s sparking so much innovation and technology deployment in transportation.

Digital Demands
Accenture conducted a study of digital disruption in transportation and logistics. They estimate that companies choosing not to implement a digital strategy in the upcoming years will start to see downward pressures of approximately 3% EBITDA as compared to companies that adopt a digital strategy. Companies digitizing the customer experience, adopting new digital models, or digitizing operations collectively can improve EBITDA by 13%.

It’s numbers like these that have promoted more than $42 billion of investments in transportation and logistics technologies in recent years.

We’re seeing new technology providers gain footholds inside of transportation – names like FreightRover, Uber Freight, Convoy, Transfix, uShip, and project44.

Transportation staples like DAT and Truckstop.com are evolving their models to keep up with where the industry is going.

The traditional, out-of-the-box TMS providers are moving away from their homegrown, proprietary development models to integrate with new technology providers to meet customer demands.

Logistics providers of all sizes are now launching digital freight management models, rather than solely relying on human capital, to bring speed and transparency to their work.

Business as Usual, but Better
However, transportation as a whole generally sits near the end of the Innovation Adoption Curve. Therefore, the technologies that are proving the most successful are the ones that support a “business as usual” mentality, but also bring something better to the table. That’s exactly where FreightRover shines.

FreightRover includes a suite of four platforms designed to streamline supply chain management and to tackle the “Three C’s.”

CarrierHQ is an online marketplace offering cost- and time-saving services to fleets of all sizes. Services include insurance enrollment, fuel savings, business formation, factoring, and pay-by-trip driver settlements. CarrierHQ also assists large fleets in mitigating risk around independent contractor misclassifications by giving entrepreneurial choice to the drivers on which services they choose for their business.

PayEngine automates the back-office work around supplier payments and provides shippers with extended pay terms while allowing carriers and other suppliers to benefit from a customized quick pay program.
Freight xChange provides automated end-to-end freight management and brings shippers and carriers together online.

SmartLTL connects with all major domestic LTL carriers and provides shippers with quote to dispatch in under 60 seconds.

The Future of Transportation Tech
FreightRover is bringing automation and efficiencies to transportation and logistics today, but there is a lot more innovation for the industry on the horizon.

3D printing will significantly increase nearshoring and challenge the industry in how to do a better job of shipping made-to-order products.

We’ll see changes with equipment utilization as we look to maximize the space inside of trailers by leveraging multiple shippers and lanes together. These changes will ultimately alter the way we price truckload freight.

As we progress from EDI to API connections, giving us larger data parcels at quicker speeds, we’ll have an infusion of data to improve the productivity and profitability of our businesses.

The Internet of Things (IoT) not only will improve the way we maintain our equipment by helping with things like pre- and post-trips to ensure we are safe and compliant, but IoT also will transform our offices and homes by creating smart environments that know when products need ordered before we do. We won’t need to get on our phone or push a Dash button to order a product. And, if we think 48 hours is tough to deliver on, changing demands will only shorten the timeliness of the supply chain as consumers want things faster and faster.

However, perhaps the most overlooked area for new innovations comes from ELDs. This data will help us manage detention better to ensure drivers are compensated for their time. Using location and hours of service data, we’ll be able to issue smart notifications to find a truck and driver the perfect piece of freight to maximize productivity.

But, perhaps the most exciting innovation is using ELD data to create behavior-based insurance, which is exactly what Aon and FreightRover have partnered to do. The industry soon will see the launch of a behavior-based auto-liability insurance program using a proprietary algorithm of things like speed and hard-braking to generate a monthly rate by driver. Safe drivers get rewarded with lower rates. Risky behaviors require higher payments. The deck resets monthly, generating a new monthly rate based on the previous month’s driving data.

Not only will this program help create safer roads and control insurance costs, but we also believe this is a stake-in-the-ground moment for truly creating capacity in the industry. Today independent contractors and small fleets have a huge capital outlay of several thousand dollars per truck to purchase insurance. Our program provides a monthly rate, with no upfront investment, deducted through an easy settlement withdrawal. Drivers also can generate real-time quotes and enroll through their mobile phones, connect their equipment, bind the insurance, and be on their way.

It’s truly an exciting time to be in transportation. Where we used to see technology as the great differentiator, we’re now seeing it as the great equalizer. Plus, the technologies we’re talking about aren’t years away, they are happening right now, and they’re changing the way we do business. The journey is just beginning and there is a lot more innovation on the road ahead.

Imagine you can predict the future. How would you answer the following:

Where is the transportation industry headed?

What will drive the change?

What opportunities will benefit the trucking and logistics industries most?

Answering these questions created thoughtful conversations among fleet executives at the 2019 Truckload Carriers Association annual conference in March. The consensus among those discussions – the industry is evolving quickly with technology paving the way.

According to the Commercial Carrier Journal, four major themes predicting the next directions for the industry emerged at the conference: enhancing transportation apps, growing logistics, embracing technology, and meeting customer needs.

FreightRover started considering industry shifts two years ago at its 2017 launch. The challenge in starting a transportation technology company wasn’t just to predict the future of the industry, but to help create it. While we didn’t have a crystal ball, our instincts were correct with our CarrierHQ platform aligning to each of the four key areas fleet executives predict the industry is heading next.

Enhancing Transportation Apps

Driver apps aren’t new. Many large fleets have created home-grown driver apps or purchased out-of-the-box options for years. However, many apps available to small fleets remain limited in scope. CarrierHQ’s app takes a more comprehensive approach:

  • Mobile marketplace – drivers can access fuel, medical, and equipment savings within the same place.
  • Driver settlements – CarrierHQ offers full pay visibility including establishing deductions, electing pay frequency, and viewing net earnings.
  • Factoring portal – fleets factoring with FreightRover’s affiliate partner Rover180 can access receivables information and upload invoice paperwork using their camera phone.
  • Private load board – asset-based carriers and 3PLs can post freight to drivers through CarrierHQ’s load board. Drivers can self-select freight and provide load updates through the app.

Growing Logistics

With more than $700M awarded in independent contractor misclassification lawsuits in the past 10 years, asset-based fleets are understandably concerned about leveraging the capacity of owner-operators. However, in a catch22, they also don’t want to introduce a third-party into their customer relationship to access additional capacity. CarrierHQ serves as an important tool for any fleet’s employment classification risk mitigation strategy. FreightRover partnered with Legalinc to offer business formation services inside CarrierHQ. Independent contractors follow a step-by-step process to obtain their DOT authority and establish a Limited Liability Corporation (LLC). In doing this, asset-based fleets can expand their brokerage operations to leverage independent contractor capacity and maintain the direct relationship with their customer, without assuming driver misclassification risks.

Embracing Technology

In the trucking industry, 97% of for-hire fleets comprise 20 trucks or less. With such fragmentation, widespread use of new transportation technologies historically has a long adoption curve. No shortage exists of new company entrants working to solve transportation’s biggest challenges. At the Transportation Carriers Association conference, Greg Hirsch, senior vice president of Daseke, described these companies as providing new voices to help the industry evolve and attract the next generation of drivers.

Many of the new technologies in transportation specialize in creating efficiencies and controlling costs. FreightRover developed CarrierHQ with the same goals in mind. Fleets can purchase four insurance policy types through the platform. FreightRover has reduced the antiquated multi-week process of obtaining insurance quotes and binding to less than 48 hours through a mobile device. Fleet owners or individual drivers answer a series of questions to generate a real-time quote among multiple insurance companies. A policy is chosen and the insurance certificate delivered digitally. With CarrierHQ’s insurance offering, fleets and independent contractors don’t owe any money up front, instead paying through weekly or monthly settlement deductions. The no up-front investment in insurance and pay-as-you-go model also removes a barrier historically preventing many independent contractors from obtaining their own authorities.

Meeting Customer Needs

As customers demand faster deliveries, shipper service requirements keep increasing. Carrier on-time pick-up and delivery is more important than ever. CarrierHQ’s private load board feature meets these increasing demands by connecting to truck telematic devices and driver cell phones to capture freight tracking data. Fleets grant shippers data access to create streamlined cargo visibility.

CarrierHQ also allows the technology to be custom branded. Fleets and 3PLs benefit by white labeling the platform to create and attract capacity using the service offerings of the mobile marketplace. White labeling existing technology expedites deployment, preserves IT resources, and provides a marketing boost.

Capacity remains one of the biggest challenges facing the industry. Trucking currently sits short 50,000 drivers, a number projected to triple by 2025. Sign-on bonuses and increased marketing spend typically only create turnover among fleets and the existing driver pool. These tactics generally fail to attract new drivers to the industry. Outside of significant legislation changes or economic factors like work conditions and compensation, technology provides one of the best opportunities to stem the driver shortage. CarrierHQ tackles this issue three ways: 1) low-cost business formation services; 2) reducing the need for up-front insurance capital, which averages $3,000-plus per truck for small fleets; and 3) providing mobile access to fleet service discounts for the top cost areas of fuel, equipment, and medical. By reducing these barriers to entry and growth, CarrierHQ opens the doors for more new drivers to join the industry.

To learn more about FreightRover’s CarrierHQ and how it could benefit your business, request a quick demo at https://www.freightrover.com/demo-request/

In today’s tight market, carrier relationships are vital to securing high-quality capacity. With our 2018 Q1 release, we’ve taken a close look at the current state of capacity and have built automated solutions that arm our customers with valuable tools to compete and win in the new digital logistics space. Here are just a few features now available within FreightRover’s suite:
 

PayEngine | Carrier Payment Processing

We recognize that load payment processing can be a tedious, costly process. So, we set out to simplify and streamline it. In our most recent release, we launched PayEngine as a quick and easy way to process payments.  With PayEngine, shippers and 3PLs free up working capital by extending pay terms at no cost, while carriers get paid for the load in as little as 24 hours.  With PayEngine, you can:

  • Provide carrier-centric pay without using your own capital, which better aligns your cash flow
  • Become a shipper of choice and improve carrier relationships
  • Easily connect to your TMS, ERP and accounting software programs
  • Brand the portal to your business, so it’s truly your platform
  • Remain in control of who gets paid

 

SmartLTL | Quick LTL Rate Quotes

Shippers and 3PLs know all too well that 2018 has brought on a growing capacity crunch. According to Cerasis, many small carriers have already pulled out of the market, and that number is expected to grow as the ELD mandate continues to be enforced.  To combat the lack of viable capacity currently available, we built an automated way to dispatch LTL freight. With SmartLTL, you can access better rates and save valuable time, while dispatching with trusted capacity providers. SmartLTL lets you:

  • Use our volume-buying power to get some of the most competitive prices in the industry
  • Upload and dispatch your LTL freight in batches
  • Find LTL capacity at no cost, with absolutely no subscription fees tying you down

 

CarrierHQ | Fleet Management Tools

CarrierHQ helps fleets of all sizes build their business through a marketplace of discounts, tools, insurance offerings and risk mitigation features. Fleets and ICs now have access to:

  • DOT and LLC business formation
  • Fuel cards and other discounts
  • Equipment sales and leasing
  • Tax and accounting services
  • Savings on insurance offerings
  • Driver success training

In addition to the features listed above, fleets are now able to provide their Independent Contractors with the power of choice. CarrierHQ enables fleets to follow the legal guidelines set out by the ABC test, and provides carriers with a clear line of separation between Independent Contractors and employees, while still retaining control over their fleet:

  • We take on the 1099 creation
  • Payroll management
  • Training, drug screens and background checks
  • Multiple insurance offerings
  • Can be branded to your business, so that the marketplace is truly yours

 

Freight xChange | Automated Load Board

Among bringing entirely new solutions into our suite of products, we have also worked to enhance user experience and carrier verification within our Freight xChange. FreightRover’s Freight xChange is an automated freight matching platform that makes it easy for carriers to find freight, while shippers and 3PLs have access to vetted capacity, complete load visibility, and easy carrier payments.

Private Load Posting through MyCarrierPacket Integration:

Make our Freight xChange your load board. Through our dynamic integration with MyCarrierPackets, shippers and 3PLs are able to offer their freight to their preferred carriers in a board that’s branded to their business.

Smart Notifications:

Carriers often spend hours searching through pages of freight to find loads that fit their needs. Our new Smart Notifications allow you to create “set it and forget it” alerts that email you when a load that matches your preferences is posted, saving you time and keeping you on the road:

  • Select cities and state, equipment type and load attributes you’re interested in for both inbound and outbound freight
  • We do the rest! We automatically run searches for you and notify you when a load matches your preferences

Ready to talk with us about how you can set your business up for success in today’s transportation and logistics landscape? Fill out the form below or give us a call at (866) 621-4145 to request a demo.