Working as a successful freight broker, for over a decade, most of my days were spent wheeling and dealing over the phone or via email finding trucks to haul loads. My compensation was based on how much spread or margin I negotiated per load. The truth is, to be successful, most brokers focus on moving loads with the biggest margin.
Oftentimes, different customers ship loads using the same lane multiple times per day. For example, many customers use Chicago to Memphis. Customer A is locked in at $2,000, while Customer B locks in at $1,000. As a broker, I know that carriers would accept Chicago to Memphis for $900. Therefore, my attention, like most brokers, would be focused on matching a carrier to Customer A’s load, which means more profit for my brokerage, and my own pocket!
- Customer A: pays $2,000 and carrier charges $900= $1,100 spread
- Customer B: pays $1,000; carrier charges $900= $100 spread
Unfortunately, neither customer A nor B knows what the market demands which means they are either overpaying to haul the freight or in some cases under paying to haul freight which usually leads to horrible service levels. Without data transparency, shippers never know the true market cost or what carriers demand to haul loads. And this is exactly what brokers want to happen to remain profitable.
Re-Inventing Freight Procurement
But as supply chains began to embrace technological advancements, specifically AI and automation, I realized that machine learning could find, vet, and transact with carriers much faster than I ever could. That’s when it finally occurred to me that I could soon be out of a job– replaced by artificial intelligence. I left during my most successful year, but I could see the industry changing. Fast forward a couple of years and here I am at a technology company where it’s not about transactional margin- it’s about AI/machine learning dynamically matching shippers and carriers at the right time, place, and price! This is just one of the many reasons I decided to leave the freight brokerage world behind for greener pastures at a tech start-up.
My current company, Sleek Technologies, offers subscription-based software which automates freight procurement for manufacturers, retailers, and distribution centers. AI-powered technology sources compliant carriers– in seconds– so shippers always deliver goods on time, in full, and at a fair market price. The technology replaces the need for brokers, which means there are no hidden transaction fees. This reduces truckload cost for shippers and places more money in the carrier’s pockets. Finally, both the shipper and carrier win!
If you’d like to discover how automation has helped other large shippers reduce truckload spend, improve OTD, and reduce vendor count, click here.
This blog is written by Tashi Budilovsky. Tashi is a Sales Development Representative with Sleek Technologies. She graduated from Indiana University and has over 15 years of experience in logistics and transportation.