Leveraging data-based intelligence to democratise shipper-carrier relationships
This interview was conducted at Reuters Events: Supply Chain USA (May 17-18, Chicago, 2023).
The US trucking industry is highly fragmented, with over 90% of the trucking carriers in the business running six trucks or fewer. Of the half million trucking authorities operating in the market, only about 4,000 trucking companies run 50 trucks or more. While the industry also does not boast improved efficiency with running operations at scale, the fragmentation effectively means carriers are shuttered out from bidding for shippers in the market.
“There’s only a 1% chance I get access to a shipper’s bid even if I had 200 trucks. That’s crazy. At Emerge, we are trying to really democratize these bids so that more capacity has access to the available freight,” says Andrew Leto, the founder and CEO at Emerge.
The Emerge platform addresses price volatility in hauling freight by advocating for a dynamic approach, where instead of conducting annual RFPs, a continuous bid cycle is put in place. This would mean shippers regularly benchmark prices across all the lanes they look to ship. “I urge shippers to go on a shorter-term bid cycle,” says Leto. “Even though a lot of shippers want to lock in these cheap rates they’re seeing from carriers, every shipper knows that you’re not locking any rate if the market flips.”
While digitalization goes a long way in democratizing bid access across the trucking ecosystem, Leto is vocal about the importance of the human element involved in securing a business relationship. That said, data can be leveraged to pick and choose the best partners to build strong interpersonal relationships.
“It’s hard to maintain relationships with all the different trucking businesses in the market. The key is data, and building a good carrier scorecard will help to know which carriers are the best at servicing your account,” points out Leto. Based on the carrier scorecard, shippers can look to foster relationships that will help them navigate tight freight markets and stay resilient to uncertainty.
Leto explains how balancing between technology and human relationships is the way forward — a scenario where data adds relevance and improves connections built in the real world. “Human interactions are essential. Carriers and brokers who are responsive and effective at resolving issues are preferred partners,” Leto says.
While exception management is barely 1-2% of the time spent building such relationships, these moments of human intervention are still critical to the overall success and reliability of shipper-carrier partnerships. In essence, companies that empower their workforce with data-driven intelligence and prioritize their quality of human intervention will be poised for greater success in tomorrow's market landscape.
Interested in finding out more about Supply Chain USA 2024 (22-23 May, Atlanta)? Then click here.