Navigating the brokerage landscape in 2024

The rapid integration of technology, coupled with disruptions in the transportation market in recent years, has generated an opportunity for freight brokerages to broaden their services and offer shippers a consultative approach to logistics.

In a recent interview with the leaders of remote staffing solutions provider Zelh Logistics, President Jeff Ogren and Vice President of Sales Chris Fields explained the changing dynamics of logistics providers.

While discussing technology’s impact, Ogren and Fields endorsed a balanced approach, recognizing the positive influence of digital freight brokers and advanced systems. They addressed talent challenges, advocating for selective hiring to decrease turnover. 

Looking ahead, they predict a future marked by increased transparency, dynamic pricing and a transition to proactive supply chain approaches. 

Questions and answers have been edited for clarity and length.

FREIGHTWAVES: How has customer satisfaction changed in the brokerage industry?

FIELDS: The quick adoption of technology has changed the overall experience between brokers and their customers. Everyone assumes technology will fix everything. Yet what we have noticed is the more your organization runs towards technology, you see less human interaction. I think that factors into overall customer satisfaction and driver relationship retention. 

One of our most requested roles has been night dispatch because drivers who have spent most of their days on the road still enjoy talking to someone. They don’t want an automated text message with a pickup number or delivery appointment time. They want to form a real relationship with the broker.

FREIGHTWAVES: What role can technology play in improving operations at logistics companies?

OGREN: Technology has come a long way over the last decade. All of these Ubers for freight came along and I think all of them were great improvements to our industry. They weren’t truly disruptive, they were just improvements to the way freight was transacted and moved between parties. Transportation management systems have come a long way — integrations and the ability to have API connectivity changed the game.

I think we also need to remember the difference between what I would call digitalization versus automation. You can digitize a lot of functionality within a broker but it’s still hard to fully automate the transportation transaction. 

Overall, we need to meet in the middle. Let’s create a low-cost augmentation where you still have a human intervention with experience but at a low cost to do a lot of back-office functionality. That for me is the middle ground.

I have also found that now, whether it’s startups or brokerages that have been around for a long time, we have to think more about their burn rate when considering technology investments. It is no longer grow at all costs. We must be more efficient with our resources and cognizant of your overhead. 

FREIGHTWAVES: What challenges does the industry face in attracting and retaining talent?

FIELDS: I was at TQL for 15 years and it was a revolving door there towards the end. It doesn’t feel sustainable to me to bring in a new class every two weeks of 25 recent college graduates knowing that they won’t last three months.

I think you need to be more selective in your hiring. In 2008 and 2009, the landscape was different. You had to show up and bring some value to get a job in this industry. I think we need to go back to that and expand on that. Let’s get real talented employees in data, technology, sales and accounting or back-office work. 

Churn is so high in this industry. That’s why we pride ourselves in the single-digit turnover we provide. We properly go through the vetting of candidates to make sure it is the right person for this job function before we start any kind of agreement or arrangement with our clients. 

Also, let’s be a little bit more efficient in how we hire and think about costs. 

How can brokers enhance their scalability through technology adoption or integration? As they explore avenues for a successful exit and consider private equity firms’ focus on EBITDA and potential earnouts, there’s a growing imperative for a review of your organization, prompting an examination of opportunities to improve scale at every level.

Related: Logistics M&A slower but opportunities still there

FREIGHTWAVES: What does the future hold for logistics providers?

OGREN: The first things that come to mind are more transparency with rates, dynamic pricing and pricing analytics. I think we will see more certainty, as the transparency forces the rest of the industry to be more compliant and changes the behavior of how customers choose their vendors.

I don’t think this change will happen tomorrow but I do think that’s what data is starting to do, because we are starting to use it more than ever before.

This change will also put more pressure and accountability on freight brokers to provide a more robust suite of offerings for their customers.

Shippers are not transportation experts. That’s why they leverage different brokers and carriers to handle billions of dollars of freight. I think Convoy and Uber Freight both created solutions through deep conversations with shippers to become more connected. 

We are no longer slanging freight or just trying to find a carrier to match this load. Now it’s about how we get smart with our relationship with customers. 

On the flip side, shippers are asking more for end-to-end solutions as well since the Uber Freights of the world have guided them to become more efficient.

FIELDS: On those thoughts, I think one day we will replace this carrier rep mentality and behavior to just go after big commission checks. 

There should be full transparency between the shipper and the brokerage and as you take more freight, there’s more certainty there will be a flat, lower rate across the board. I do not think every logistics provider will be able to provide that because they may not have the capabilities to do so. 

Brokers need to open up about their carrier network capabilities and make sure they are providing shippers with tools on their behalf. Brokers should be subject matter experts and must walk shippers down a proactive supply chain approach to have more success.

.kt-btns_b75934-cc .kt-btn-wrap-0 {margin-right:5px;}.kt-btns_b75934-cc .kt-btn-wrap-0 .kt-button {color:#ffffff;background:rgba(52, 117, 182, 1);border-color:rgba(85, 85, 85, 1);}.kt-btns_b75934-cc .kt-btn-wrap-0 .kt-button:hover, .kt-btns_b75934-cc .kt-btn-wrap-0 .kt-button:focus {color:#ffffff;border-color:rgba(68, 68, 68, 1);}.kt-btns_b75934-cc .kt-btn-wrap-0 .kt-button::before {display:none;}.kt-btns_b75934-cc .kt-btn-wrap-0 .kt-button:hover, .kt-btns_b75934-cc .kt-btn-wrap-0 .kt-button:focus {background:rgba(68, 68, 68, 1);}@media (min-width: 768px) and (max-width: 1024px) {.kt-btns_b75934-cc .kt-btn-wrap-0 .kt-button {}}@media (max-width: 767px) {.kt-btns_b75934-cc .kt-btn-wrap-0 .kt-button {}}

2023’s most notable deals in trucking

ISO aims for standardized service metrics across supply chains

The unsung FreightTech disrupters innovating supply chains

The post Navigating the brokerage landscape in 2024 appeared first on FreightWaves.

Source: freightwaves - Navigating the brokerage landscape in 2024
Editor: Grace Sharkey