So far in 2019, the adoption of digital broker services has been steadily increasing. While digitalization is not entirely new to the trucking industry, its growth will have a definite impact on the shipping industry.
Between required ELDs and additional telematic devices, almost half of the trucks in North America will be digitalized by 2025. Companies who have already digitalized using this new technology to automate and remove redundancy in their processes. Here are some changes you can expect to see in the future as the digital transformation speeds along.
Digitalization Incentivized by Low Margins from Empty Miles
Current road freight capacity utilization levels are very inefficient. It is common for commercial long-haul trucks to operate with 25 percent empty miles per trip. This leaves truckers with a 56 percent load efficiency rate. When combined with long asset-idle times, the result is low margins for the trucking industry.
Between 25 to 40 percent of total road-freight miles are lost each year to empty miles. This causes:
- Lost driver hours
- Waste of fuel
- Non-productive emissions
- Unnecessary road congestion
- Inflated operational costs
Digital brokerage solutions can help with the problem of empty miles. Taking advantage of the data exchanged with connected trucking devices, digital loadboards and automated on-demand brokerages can make better use of miles that would otherwise be empty.
Technology Startups Entering Digital Brokerage Solutions
It is not just traditional brokers anymore. Venture capitalists are investing in digital freight tech startups that focus on international freight forwarding. This trillion-dollar industry represents a network of freight agents, carriers, truckers and customs brokers that manage different segments in international cargo shipments. In 2019, digital freight tech startups with their cutting edge freight management platforms are disrupting the industry. Their platforms allow supply chain teams to:
- Make data-backed freight decisions
- Manage their rate procurement
- Track shipments in real-time
- Analyze online their logistics expenditure and performance
As carriers further digitalize their services, there will be more integration between them and digital freight start-ups with instant pricing and bookings. It is also expected that digitalization will move the industry toward paperless shipping documentation.
2019: The Year of the Blockchain
Supply chain networks will provide added traceability for suppliers that is often required by certain agencies for visibility. Visibility is no longer just knowing where a shipment or the truck carrying it is. It can now trace exactly where a certain container or item is. This can help reduce shipping costs including last mile costs by utilizing the digital freight matching market for better efficiency.
Digitalization has the potential to improve productivity and cut costs for carriers and shippers. It is expected that 2019 will be a pivotal year for international freight tech.
Stay tuned to Cargobot’s blog for the latest news regarding trucking’s digital transformation.
