Your delivery service is as good as the speed of your supply chain. Companies that deliver packages across the country face numerous challenges, including a lack of drivers. Forcing logistics companies to dispatch half-empty trucks results in fewer goods delivered and more money spent on fuel and maintenance.
A single event in the supply chain can affect every leg of shipment. Something as simple as unforeseen truck maintenance can result in lost sales. The solution is often to invest in more people and vehicles. However, not all companies can afford that.
That’s why digital freight matching is beginning to gain steam. But is this technology enough to solve the problem of timely delivery? Is it just a passing trend? Let’s find out!
What’s inside:
- What are digital freight marketplaces, and why do logistics businesses need them?
- How digital freight matching services can solve cost, customer, and speed challenges
- Streamlining opportunities digital freight marketplaces create
What are digital freight marketplaces and why do logistics businesses need them?
Freight marketplace systems, or digital freight matching platforms, are software systems that allow companies to connect shippers with third-party carriers through a secure marketplace. Unlike digital freight brokerage, a digital marketplace relies heavily on smartphone technology. The reason is simple: most smart devices are equipped with a GPS module, have access to the internet, and are paired with a capable enough CPU to handle the backend side of things.
How a digital freight marketplace works
A marketplace allows companies to pick from a list of independent truck drivers and logistics companies (similar to third-party sellers on Amazon) and even specify what size of vehicle they need. To make things even more streamlined, shippers can set desired delivery times or schedule cargo transportation in advance.
Due to the digital nature of online shipping platforms, freight marketplace admins can accelerate the driver onboarding process. A freight management system can automatically match drivers with requirements and work at scale. Moreover, drivers can apply for work faster without needing to travel to offices. Most if not all application documents can be sent, verified, and signed using digital signatures through a dedicated mobile app.
How digital freight matching services can solve cost, customer, and speed challenges
Freight matching services help to expand the overall supply line and increase the efficiency of last-mile delivery. However, these are not the only challenges digital freight management systems solve. Outside of real-time communication, GPS tracking, secure payments, and document capture, digital freight marketplaces can help with other things too.
Improving data security and fraud protection
Working with many drivers and keeping records up to date is a laborious process. Furthermore, protecting records from hard drive failures, data corruption, and theft is even more difficult. Yet ensuring data security is paramount.
Technology can streamline the process. Powering your marketplace with cloud-based systems will result in operational efficiency. Via the cloud, data can travel faster and safer while being less susceptible to corruption. Furthermore, data stored and transferred in the cloud can’t be intercepted and exploited, as end-to-end encryption makes this data unreadable and practically impossible for a malicious actor to crack.
Moreover, these aren’t the only security measures the cloud brings to the table. Companies opting for cloud development services can establish a wide range of security mechanisms that are not directly tied to specific documents but rather built around them. For instance, data authentication, enforced access control, secure deletion, and integrity checks are all cloud data protection methods.
Accelerating batching through AI
Once a digital marketplace aggregates a certain number of shippers, efficiently batching orders becomes challenging. This problem is further magnified during holiday seasons when eCommerce stores start to discount items.
A digital marketplace isn’t affected by seasonality in the same way as a traditional freight marketplace. With the inclusion of artificial intelligence, packages can be allocated automatically and sent out for shipping round the clock at no additional cost. Powering your marketplace with a machine learning and AI system will eliminate this issue.
Allowing for additional communication methods
A digital marketplace enhanced with an omnichannel information gathering system can be a game changer. If there’s a tool that can consolidate, adapt, and present data from various sources in bite-size chunks, drivers will no longer be forced to use third-party alternatives.
This isn’t just convenient but can be viewed as a marketable benefit for new drivers and a real reason to stay for seasoned workers. Furthermore, a freight marketplace can include support service that communicates with customers, receive quotes, and even answer inquiries, making it a perfect companion for any driver.
Ensuring fairness and transparency at all stages
All freight matching involves strangers, and parties are often skeptical of whether they should work together. Ensuring trust between parties is key to fruitful, long-lasting cooperation.
A digital freight marketplace can achieve this through tracking systems and verified reviews. To make things even more secure, platform holders can act as arbiters of trust between shippers and carriers. Additionally, companies can use blockchain technology to allow end-to-end assurance of supply chain safety if technologically feasible.
The integrity and transparency of all operations can eliminate doubt. With reliable freight management system, shippers and carriers will know for certain that their tracking, ratings, and invoice audits have not been tampered with and that their cargo is safe and sound.
All drivers that want to register on a freight matching platform should go through a verification process, which can include a face scan, license verification, and transportation data check. All of these are critical components for establishing a trusting relationship between parties.
Enabling a reward system for loyal carriers
The more reasons you give drivers to join your marketplace, the more operations you can carry out. Digital marketplaces allow companies to promote their offerings to potential drivers. With video telematics and GPS tracking, platform stakeholders can see how many deliveries a single driver has performed. This data can be used in conjunction with a gamification system to form a rewards system.
For example, if a driver completes 200 deliveries in a month, the gamification system can notify management that a reward is pending. Simple incentives such as fuel coupons, health insurance, and free vehicle maintenance can seal the deal for new drivers while preventing seasoned drivers from changing platforms.
Furthermore, a happy driver can be your greatest marketing asset. By investing in your carriers, you can make them your brand ambassadors. Yet the best part of it all is that you don’t even need to track it, as smartphones can do it for you.
Optimizing data and records management
The larger the marketplace, the harder it is to maintain data in a clear and usable state. Records pile up, invoices are left unpaid, and discontent rises.
So what is digital freight solution for optimizing data management? Cloud technology paired with big data analytics can allow shipping companies to store and process copious amounts of data fast and effectively. With this technology, companies can also perform advanced forecasting to improve last-mile delivery.
Ensuring an essential number of drivers in the busiest areas
Digital marketplaces are also used for allocating drivers. Often, shipping companies face issues when the number of drivers and packages varies dramatically. A digital marketplace can ensure there are enough people in strategic distribution centers by guiding drivers to particular distribution sites.
Telematics and ELD software are two technologies that can help logistics companies provide such guidance. Carriers equipped with telemetry data can take advantage of location-based services and broadcast their locations, the proximity between delivery points, rates, and even wait times. Having this information in hand, both carriers and shippers can coordinate and ensure the required number of drivers so more packages are delivered.
Allowing for accurate spot price generation
In current market conditions, spot freight rates can change on an hour-to-hour basis. A digital freight brokerage solution that could automatically calculate spot quotes would allow companies to win customers and keep the shipper churn rate at a minimum. In traditional freight marketplaces, achieving something like this, especially at scale, is impossible.
Dedicated digital marketplace software allows companies to implement such functionality without restructuring their entire line of operations. If enough data is present, spot rate forecasting is possible.
This functionality can attract new customers by making pricing reliable and transparent. Furthermore, intelligent algorithms can take data from analytics and probabilistic outcomes and produce spot quotes on demand and at scale.
Securing work/life balance for new drivers
If your marketplace employs carriers, establishing a healthy work/life balance is a must for them to remain loyal. Achieving such a balance is difficult, however, since freight marketplaces are dynamic and often experience unforeseen events.
However, with freight matching technology, you can group multiple carriers across the country for a single delivery. In practice, much like in a relay race, software can divide an entire route into small transfer legs and distribute them to drivers who live near where orders are to be delivered.
Each driver can travel a set number of miles and pass shipments to another driver, ensuring timely delivery without breaking the work/life balance in the process. Route and driver optimization can also help improve ETA accuracy, meaning customers can expect not just faster deliveries but more accurate tracking.
Streamlining opportunities created by digital freight marketplaces
Outside of solving a wide range of problems, digital marketplaces open up several opportunities for businesses that are willing to invest in dedicated transportation and logistics software and fleet management solutions. Chief among them are the following:
- Companies can create quotes, communicate with customers, and execute transactions in real time
- Pricing can be more transparent, as the process of comparing prices is much more streamlined
- Shipping companies can create novel delivery options and service offerings in response to demand
- Load capacity can be balanced on the fly
- Additional drivers and vehicles can be acquired more smoothly
The more technology your logistics chain employs, the more opportunities will arise. Your digital freight marketplace is a growing entity, and you can further enhance it with all kinds of behind the scenes systems.
Why is pursuing digital freight technology worth it?
Technology in a freight marketplace can help shippers and carriers achieve reliable delivery, superior management, and better customer service. Thanks to added visibility and accurate real-time insights, companies can effectively keep track of consignments. Digital freight marketplaces are excellent at accelerating delivery because they:
- Always give shipping companies a backup plan
- Allow more shipments to be carried out at once
- Support enhanced forecasting through big data and analytics
- Provide instant updates on schedules and changes
- Can automate invoicing
- Can provide instant quotes
When underpinned by a reliable and capable digital platform, delivery companies and eCommerce businesses can expect growth and accelerated deliveries. Investing in innovative logistics solutions such as a digital freight marketplace ensures competitiveness tomorrow.
Looking to develop your digital freight marketplace? Get in touch with the Intellias team to uncover opportunities for your business.
