Supply Chain Visibility: Big Brother Shippers and Truckers Need a Prenup

trucking Yuri Bizgaimer/Adobe Stock

Sushi’s journey from a Japanese street snack to one of the planet’s most coveted luxury foods seemed to happen overnight. And despite watching it happen with my own eyes, the speed at which fatty tuna went from cat food to global delicacy is still hard to believe. Is it yet another example of that magic moment Malcolm Gladwell refers to as a market’s tipping point (when an idea, trend or social behavior crosses a threshold and takes off)? Seriously, how did sushi become LA’s favorite food and less than a year later find itself a staple of mid-America?

Of course, Gladwell’s point is that seemingly random events are anything but — that they line-up with purpose, resulting in new ways of doing things.

Those are the kinds of thoughts that invaded my brain during several supply chain visibility product demos over the last few weeks. I watched five very different and successful solution providers — each focused on track and trace capabilities designed to benefit freight shippers — explain to me that knowing the exact location of a shipment has become an industry requirement. Yes, I raised my hand and asked “why,” because watching an icon move on a map, while cool, just didn’t strike me as essential.

As I learned, Wal-Mart and Amazon, once again, are responsible for the shift. Shipper expectations have changed. For example, Wal-Mart now demands 15-minute estimated time of arrival (ETA) updates on its shipments. And Amazon wants its transit info on demand. While we’ve all learned to appreciate how fast our Amazon orders get delivered, does the entire industry need to follow suit? For that matter, is the standard even good for Amazon?

Do I really need an app to track my pizza order from Domino’s?

These days, from the time a load is picked up, the communication between the driver, broker and shipper is continuous, allowing transaction processes to begin immediately, while allowing the shipper to coordinate its warehousing and dock operations with precision. Smart middleware is now connecting, normalizing and automating all of the traditional paper and fax-based quote-to-invoice business processes. Furthermore, this middleware is interconnecting every conceivable kind of shipper or broker-resident transportation management system (TMS), ERP and related point solution that touches freight logistics. And because the solution providers in this marketplace actually work together (some are better at certain capabilities or certain modes of transport than others) the speed of the overall transformation is truly impressive.

But back to good sushi. The fresher it is, the more expensive. While the history of the fish is important to the wholesale buyer, all we consumers care about is a good experience — and we’ll generally pay more for it.

In freight logistics, the opposite is occurring. Shippers want every detail, and they want to pay less.

The tipping point in freight logistics has arrived. Almost overnight and courtesy of Amazon, we now expect same- or next-day delivery, and we don’t want to pay for it. While it’s a monumental shift that we do, in fact, talk about, the magnitude of what’s happened is not fully appreciated.

The number of independent owners and operators is on the rise, large shippers have divested themselves of assets and while the 3PLs and traditional brokers remain valued intermediaries, it’s still a zero sum game that someone’s going to lose.

One of two things is going to happen. Technology will either consolidate the market or fragment it. History tells us that that latter is far more likely. The dispatchers, brokers and other intermediaries never seem to win, and with the tech I’ve seen moving toward drivers, you have to believe it’s only a matter of time. Throw in the pricing pressure of “free” delivery and, well, brokers shouldn’t be buying green bananas.

In terms of freight logistics tech, there is nothing random going on. Cell phone apps that deliver the intel directly to the drivers are coming and surely seem like the inevitable winners. Streamlined versions of the same technology currently being used by shippers and brokers are finding their way to driver smartphones and onboard computing systems that allow them to manage their business to whatever compliance standard is required. If those same systems learn how to keep trucks full, then as said, the end result seems inevitable.

Finally, with trucker “naps” now being tracked by shippers (there’s even discussion about monitoring sleep apnea machines), I’m also left wondering how much more “big brother” the drivers will tolerate — without some meaningful, monetary offsets.

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Voices (3)

  1. Craig Sanders:

    I believe technology will help this market and continue its growth. The drivers, brokers and sellers just have to adapt to the ever growing tech app market and continue to innovate.

  2. Sergey Koleda:

    Well, the IT solutions in transportation can really improve the performance of the whole industry. We all know that the truck drivers drive empty up to 20% of their time. So the apps like doft or convoy or any other uber for trucks app can save a lot of time and fuel. By the way some of these app are combined with the load board. So if the truckers concider these apps like an additional source of jobs they can improve their performance.

    1. Tom:

      Agreed. I was shocked to learn about what was referred to as the industry’s “worse kept secret.” Although the 20% figure you mention may be accurate in terms of “empty,” I learned that >80% of the time, they aren’t anywhere near full.

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