Seems there has always been a small undertone of mistrust within transportation and logistics. The year 2020, along with all of its challenges and uncertainty, has lifted trust to the foreground. For example, carriers have accused brokers– whom they use to find and book loads– of price gouging. Carriers are rejecting 1-4 loads nationally, disrupting contracted freight leaving many shippers wondering if long-term relationships are even worthwhile. Seems the days of accepting someone’s word is no longer enough. So what can be done to help close the gap, and build back trust? One important word comes to mind…. drum roll, please…. transparency!
Simply put, the white elephant between carriers and brokers is the hidden spread the broker makes per load, which is not shared with the carrier, nor the shipper. In tight markets, a broker can generate spreads as high as 30%. Carriers are often left wondering if brokers are shaving too much off the top. One of the white elephants between shippers and carriers is understanding the true market cost to move a load. Brokers do not share the rate breakdown because they do not want the shipper to know how much they make. Another white elephant between shippers and contacted carriers is when acceptance rates begin to slide. When acceptance declines, the carrier could be taking advantage of rate hikes and shifting capacity from lower-priced contracted lanes to higher-priced “spot” lanes to accelerate revenue.
Building Trust with Software
“Market research shows that trust is a major pain point amongst transportation professionals,” said Jaimie Kowalski Sleek Technologies VP Marketing. “Our flagship software, Optimal Transportation Spend (OTS), closes these gaps by providing total rate transparency.” All parties involved know exactly who gets paid what. OTS cuts out the middleman/broker building a virtual bridge direct from the shipper to the carrier. The shipper maintains complete cost control by setting the desired lane price. Carriers then have direct access to bid on the loads, and when bid strikes at, or below, the desired price, the carrier is dynamically awarded the load. No middleman/broker is ever involved, which means no hidden margins driving up TL cost. Plus, with OTS, market price is always set by the carrier, not a money-hungry middleman. All rate data is shared back with the shipper, so they always understand true market cost to move the load.
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