The Future of Freight and Where Freight Brokers Fit In
The freight brokerage industry has been a foundational piece of the transportation landscape for decades, with widespread growth experienced in the vertical over the last several years. Successful freight brokerage operations allow both the customer and the carrier to increase bandwidth through a myriad of value-added services that are designed to streamline the process. As a vital factor in connecting the supply and demand sides of the shipping business, freight brokerages generated an estimated $40 billion in revenue last year – an impressive number slated to grow in the upcoming year. Although freight brokers have shown their worth in years past, the shifting environment of freight has some concerned about the viability of brokerage operations into the future.
Moving toward a Digital Approach
Over the last two years, a flurry of activity has taken place in the venture capitalist arena focused on freight brokerage operations. Major players in technology have used their ample resources to quickly join the ranks of companies designing and delivering virtual connection services between customers and carriers, due in part to the opportunities freight brokers have in the marketplace. While there has consistently been a great deal of competition in the industry, with more than 15,000 registered freight brokers nationwide, behemoth corporations entering the mix shows clear signs of disruption. These additions to the freight broker environment are hyper-focused on creating and implementing services with technology at the helm.
This move toward a digital, more automated approach in freight operations is attributed to the technological advancements in several silos of transportation. From self-driving trucks to help lower costs and improve efficiencies, to highly predictive freight and shipping analytic software that taps the power of big data, the digital disruption coming to the freight industry is intended to make customers and carriers less dependent on third-party intermediaries. However, there are challenges inherent to distributing new technologies on a grand scale, including slow adoption and the capital needed to replace or supplement legacy systems already in place. Even with these known obstacles, large technology companies are in the freight industry to stay.
Preparing for the Future
The digital disruption sweeping over the freight and transportation industry is not something that should be taken lightly by freight brokers, no matter their location, niche, or percent of market share. But adapting to the revolution taking place – and continuing successful operations as a freight broker – is a real possibility for those who take proactive steps.
One of the most critical components of adding value to customers and carriers in the ever-changing freight environment is embracing the technology currently available to brokers. There are countless solutions for managing the freight process, which work in various ways to save time, reduce hassles, improve communication, and offer invaluable data which can be used to benefit broker operations on a large scale. Finding the best-fit solution that not only improves processes in-house but also adds value to customers and carriers is a necessity in today’s evolving freight market.
In addition to grabbing hold of the digital wave, freight brokers can prepare for the changing landscape of the freight industry by strengthening relationships with current partners and customers. The human touch aspect of the freight broker business is something that cannot be replaced by technology, no matter how far it comes or how cost-effective it may be. Business relationships can be proactively insulated from digital disruption by simply checking in with customers and carriers periodically, asking what can be done better or differently, and then following through with feasible suggestions.
While there is no stopping the influx of competition and digital disruption coming to the freight industry, freight brokers can view these changes as prime opportunities. Now is the time to update systems and processes, strengthen customer relationships, and ultimately, lay the groundwork for business growth in the years to come.