Editor’s Note: This is a guest blog from our friend Augie Grasis, CEO of FrieghtGator.com In today’s blog, Augie discusses why Carriers should partner with a 3PL or LTL Freight Exchange to stay ahead of the game and not be left behind.
Why Carriers Should Partner with a 3PL or LTL Freight Exchange
“What’s in it for me?” asked the sales rep from a large regional carrier responding to my offer to be included in the www.freightorgator.com LTL freight exchange. “I’ve got 3PLs beating my door down every day. Call me when you can show me some real volume and I’ll talk to you then!” Hmmm. Some days are better than others for tech startups in the freight industry.
Fortunately for companies like mine, not all encounters with Carriers are like the one described above. But this encounter got me thinking about the vastly different attitudes carriers have about technology, why each believes the way they do, and what will come of one approach versus the other.
The LTL Freight industry is in the midst of a paradigm shift—perhaps you could even call it a Revolution. With access to big data in every part of the business, smart carriers are realizing that there are many more dollars to be made by optimizing their operations from one end to the other. And the benefit of applying technology is not just greater profits for the carrier, but also lower rates and a better user experience for the shipper.
One such advancement permeating our industry is dynamic freight prices directly from carriers. While typically carriers publish blanket rates based on their tariff and then discount them, the most progressive carriers are providing dynamic prices adjusted daily based on capacity in specific lanes. This way, aggressive carriers can lower rates in certain lanes based on extra capacity, seasonality and other factors that can change almost daily. These discounts find their way to the marketplace direct from the carrier or through partners who are connected directly via API to the carriers pricing system.
While many think that embracing technology is reserved for only the largest carriers, we have seen freight companies of all shapes and sizes making significant steps to take part in this tech revolution. Carriers such as YRC, Old Dominion, Shift Freight and A. Duie Pyle have embraced new ways of doing business as their leaders are clearly committed to defining the future rather than sitting on the sidelines.
How can smaller carriers afford to participate in the future of the freight industry? The reality is that it only takes vision and a small commitment to partner with some of the new companies that provide the technology interfaces you need. Project 44 can provide APIs between a carrier’s system and partner companies, while www.freightorgator.com provides an open LTL Freight Exchange to convey those prices directly to customers.
But wait—what if you don’t invest now? This progression requires a financial commitment; or at the very least to work with tech guys ala Big Bang Theory. Why fix what ain’t broken? What if you sit on the sidelines and continue to do business the old way? After all, you can jump on the bandwagon when the market is fully established and there is plenty of volume, thanks to these pioneers and visionaries, right?
Well, you could ask for advice from others who sat on the sidelines. How about the mapping leader in the 1990’s, Rand McNally, who refused to put its maps online; or your local newspaper who is firing reporters while still transporting your newspaper (which has now shrunk to almost the size of a newsletter) to your front stoop; or call your travel agent who is probably out of business because you are booking your business trips on Expedia. You get it—sidelines don’t work when the future is being rewritten. You need to be a part of the future or you are history.
Here’s some good news—there is a roadmap for thriving and surviving industry revolutions. These transitions have already happened in a multitude of industries and the results are exciting and consistent. The winners are the ones who embrace the future, seek to understand a new wave of millennial consumers, and adapt their approach to the marketplace to capitalize on these dynamics. The losers hang on to old paradigms, erect barriers to change and die a slow and painful death.
Which one are you? Are you in the game or on the sidelines?