Issue #20: Five Opportunities to Improve the Freight Industry

Some things in this industry are working, but they're not working great. It's time to build better tech for the industry.

Look, no industry is perfect, but this one is pretty far from it. For something that basically enables the whole world to exist, logistics and supply chain is really far behind the ball when it comes to technology. So many other major industries have come so far, and it feels like we’re still doing a lot of the same things we did fifteen years ago, and likely longer ago (but I’ve only been doing this for seventeen years so that’s what I’ve got for you).

Maybe we’re not sending rate confirmations via fax machine to truck stops, at least I haven’t heard of that happening in a while, but remember doing that early in my career. And sure, we’re not communicating with carriers in Mexico via Nextel phones, with this method of communication having been replaced by WhatsApp, as more people in Mexico have smartphones than ever before. Yet somehow, a lot of companies still rely on software built decades ago to manage their day-to-day business and communicate with external parties (I’m talking about some TMSs, load boards, and EDI).

My plan was to write more about our launch but we’re literally still launching and so, instead, for Issue #20, I’m going to talk about five major opportunities I see in logistics, supply chain, and freight. I’ve spent my whole career specifically in full truckload freight but, through my time at Coyote as part of UPS, and my time angel investing, I’ve had an opportunity to learn more about other parts of what makes things move, so I’ll try to cover more than your typical brokerage pain points.

Tracking

When I first started as an intern at Coyote in 2007, my job was calling drivers and asking them for updates to find out where they were. They would tell me a mile marker they passed and I would have to figure out the corresponding town. Tracking is still a huge pain. Yes, companies like Project44 have certainly made it easier to track loads. Now, drivers can connect via Project44 and provide near-real-time location updates. However, we’re spoiled by food delivery apps. We get little dots on a map telling us exactly where our food is and when it’s going to arrive at our door, but it still takes a small army to actually get a carrier integrated into your TMS through your preferred visibility provider. And yes, tools like Tive, with their physical GPS devices, are cool, but that’s too expensive and complicated to scale past a certain point.

I would love to see a more natively integrated solution that enables shippers and logistics providers to better track the location of the freight. It’s not just about whatever the platform looks like that actually solves this problem, it’s about what it integrates into and how it interacts with other systems. What do you do with those location updates once you have them? How does that impact dock schedules?

Scheduling

Speaking of dock schedules, nine times out of ten, a late truck is simply going to the back of the line and everyone else’s schedule remains untouched. There’s typically no shuffling of a schedule when a driver is running late and notifies a facility. How does the driver notify the facility? Could be a call to the broker, who calls the facility, or the driver could call directly and, after sitting on hold, let them know he’s going to be three hours late two hours before the scheduled arrival time. They let the driver know that he’ll need to wait until they have time later in the day, as their schedule is full.

Scheduling is in a really bad situation right now. The best we’ve seen has been a dozen versions of Calendly for freight scheduling, with no standards when it comes to cross-platform communication. Yes, there’s the SSC, but we’ll see where that goes. Someone needs to actually build a better way to make scheduling work between all those involved, and no, this doesn’t need blockchain.

Carrier Quality

How is it possible that there’s no way to know, industry-wide, whether a carrier does a great job or not? Moving freight from one place to another is pretty much the same across the country, whether short or long haul. When I think about the quality of a carrier, I want to understand their on-time pickup and delivery numbers, how they communicate with their customers, how they represent themselves at facilities, the quality of their equipment, and their pricing.

How do we not have any version of a credit score for carriers? Yes, there are safety scores, but that’s only one piece of the puzzle. Highway does a great job around carrier identity and is working hard to prevent fraud, but this is about performance on the job. What would it take to get brokers and shippers to share their performance data about carriers so the industry could collectively understand the quality of every carrier?

Broker Identity and Quality

How is it that double-brokering is so rampant in the industry? Why is fraud such a big problem in this day and age? Is it because criminals are getting better with technology or because the industry is growing and creating more opportunities for crime? I love what Highway has done to improve how brokers manage carrier identity but I think we need something similar on the brokerage side. Brokers get away with far too much and with little recourse – when will that change?

Talent Distribution

There are so many talented people in this industry who have spent 5-10 years learning how to operate, cover, and sell freight. They’ve learned from some of the best and have developed their own tactics or methods for how to do their jobs in a great manner. We’ve started to see, over the past few years, former Coyote leadership sprinkled throughout the ranks of most of the top 100 brokerages in the industry. Talented people deserve an opportunity to grow their careers and take on new roles and responsibilities. 

With how tightly wrapped this industry is with non-competes, I think people get held back from having an opportunity to go start their own business. Should you be able to steal customers away from the company that just paid and trained you? No. Don’t take customers and don’t take employees. Should you have the opportunity to go lead a new team at a new company after you’ve earned your stripes? If you’re not going to get it at your current company, then yes. I know this is going to be a somewhat controversial take, but reward your best people and keep them motivated or you’ll lose them. And if you do lose them, be proud of the fact that you taught them something and they were able to carry that forward at a new company. Just look at how the coaching trees in the NFL work. I’ve seen several people who worked for me in the past go on and start running a different brokerage’s Mexico division and I’m sure we’ll see more in the coming years.

It’s time to build better tech for this industry.

I wrote about it before in my “The Freight Industry is Changing” post and I’ll say it again: this industry deserves better technology. We’re building something to tackle all the issues that come with cross-border freight, as you saw spotlighted in last week’s Freight Caviar post, but there’s so much opportunity in the rest of the industry to keep building great technology. Go build it if you’ve got that entrepreneurial spirit and if you have actual operating experience to truly have felt the pain that everyone in this industry feels day in and day out.