New Armstrong & Associates’ report focuses on myriad facets of freight brokerage operations

自最近发布的一份新报告supply chain consultancyArmstrong & Associatestakes a deep dive on myriad facets of freight brokerage operations from various perspectives.

Entitled “DIGITIZATION: The Convergence of Modern Freight Brokerage, Digital Freight Matching, and Automation in Domestic Transportation Management (DTM),” the report examines the digital transformation steps for becoming a digital freight broker, focusing on systems to augment a Transportation Management System (TMS) to digitize DTM, while also addressing what the firm called the “rapid technological changes” within the DTM third-party logistics (3PL) segment over the last five years. This follows a 2016 report produced by the firm, in which it coined the term digital freight matching (DFM).

Another key focus is on how a TMS to run DTM operations is viewed as one of the key first steps needed to develop a “truly digital freight brokerage operation,” which is occurring on a daily basis, with upstart digital freight brokers (DFB) like Convoy, Uber Freight, and Transfix taking steps to leverage their respective DFM technology as a competitive advantage in a crowded and competitive market, replete with established players like C.H. Robinson, Coyote, and Hub Group, among others, with a focus on long-term growth and building customer and carrier digital experiences, too.

The report noted that in 2019, the U.S. 3PL market had $212.8 billion in total gross revenue, with non-asset based DTM, which focuses on managing truckload (TL), less-than-truckload (LTL), and intermodal rail shipments managed on behalf of shippers using motor carriers and railroads to perform the underlying transportation, representing $83 billion, or 39% of total 3PL market revenue. And it added that freight brokerage represents 83% of total segment revenues, and managed transportation at 17%.

Armstrong & Associates’ President Evan Armstrong said in an interview many of the key digitization themes in the report represent areas that his firm has had to define.

“Over the last five years, in DTM and freight brokerage, there has been so much more technology coming on to the market that it is really not about TMS anymore,” he said. “TMS is really ‘table stakes’ now. It is really what else you can do from a systems standpoint to really digitalize your operations, reduce the amount of manual tasks, and automate processes. That is where a lot of our focus was (for this report). For most modern DTM managers, there are a lot of 3PLs now are doing freight brokerage and managed transportation, and, in both of those segments of domestic transportation management and the 3PL segment are rolled into domestic transportation.”

What’s more, there has been a fair amount of what Armstrong calls intelligent capacity systems developed, while using multiple data points, for things like lane history information out of a TMS, carrier information from multiple sources relating to where is the carrier capacity, weather, and other different data points. And taking that information to match shipments from shippers to carriers is being done through the use of artificial intelligence (AI) and machine learning (ML) in order to do that, noted Armstrong.

When looking at the major digital freight brokerage players, one key theme that they have, he said, is that they have all built systems to do digital freight matching with some automation on top of it for algorithms to do pricing, and what Armstrong calls visibility management systems to do real-time track and trace, to a large degree.

“There are these digital freight brokers that have come on the market…with proprietary technology and a lot of capabilities,” he said. “And you have modern domestic transportation managers, or freight brokers, that all have a TMS. Most of them have pretty efficient operations from an operational model standpoint, but they don’t have automated pricing. They are not using AI to match loads to carriers and are not as digitalized as, say, a Convoy.”

That premise serves as a key backdrop of the Armstrong report, which focuses on the digital DTM and freight brokerage environment, with data for how to digitalize and how to go about that by presenting an overview of different system platforms and solutions for how to go about digitalizing a traditional DTM operation.

For more information on this new report from Armstrong & Associates, please clickhere.