Opinion: Transportation Tech’s Tipping Point

This Opinion piece appears in the Oct. 14 print edition of Transport Topics. Click here to subscribe today.

By Jim Bramlett

General Manager

Less-Than-Truckload Freight

uShip Inc.

There’s no denying that technology is rapidly changing the shipping and logistics industry. These changes are making warehousing more efficient, dispatching faster, planning easier and communications smoother — and that’s just the tip of the technological iceberg.

Even so, as an old-school industry, it’s not uncommon to find that the shipping and logistics status quo is often preferred simply because those involved are too busy (or just unwilling) to realize change is afoot.

Meanwhile, “technology” has become an amorphous word tossed around in trade publications and during conferences, meetings and hallway discussions without much thought or a true understanding of its concrete meaning and day-to-day impact. Ask 10 people to define “technology,” and you’ll probably get 11 answers.

In talking about technology in the context of shipping and logistics, I’m specifically referring to true innovation that provides a fundamentally different way of going about things — not just technology for technology’s sake.

Much the way streaming media and mobile devices have fundamentally changed how we communicate and are entertained, true innovation has to bring greater efficiency, simplicity and convenience to life.

For example, if you’re a broker and still use phone, fax and e-mail for the majority of your communication, sales and coordination — and are convinced it always will be done this way — you need to take time to see the forest despite those trees in the way. Things are coming that will make your work and the process behind covering loads faster, smoother and more profitable.

Some already are here.

To avoid embarrassing any specific trucking firms still in business, I’ll point to a nontransportation company that lost sight of technology’s influence and wound up failing: Blockbuster. Its leaders chose to stick with what they knew, making the unfortunate assumption their leading market share could insulate them from their innovative competition — an upstart called Netflix.

Blockbuster’s late attempts to operate grocery store kiosks and provide mail-based delivery and on-demand services were trite and poorly planned. Their last-ditch efforts to reduce costs by closing stores were too little, too late. By the time low-cost, high-speed Internet had become ubiquitous, their competition already was entrenched and booming. In 2010, Blockbuster filed for bankruptcy.

So, what can freight transportation learn from Blockbuster, Kodak, Borders, RIM/BlackBerry and others that failed to let technology create the next best version of themselves? Let’s look at some high-level technology trends I feel signal a tipping point for transportation in the year ahead — and the benefits to adopting them:

• SaaS will set you free: Software-as-a-Service, or SaaS — also known as The Cloud or Hosted Solutions — will ultimately create a level playing field, provide automation, increase speed-to-market, bring greater efficiency and reduce costs across the freight industry. Big brokerages are spending millions of dollars building proprietary technical solutions, but now, if you’re a small- or medium-size broker (likely with pockets less deep) you can take advantage of off-the-shelf SaaS solutions easily, affordably and instantly to help with everything from rating and routing shipments to accounts receivable and payable.

• Instinct + insights: While instinct will always have a place in this business, watch for greater emphasis on Big Data, as it’s called on the street. This means insights through data-analysis trends that can identify and reveal surprising over- and under-performing trends, spot market pricing, seasonal adjustments and more. Sure, today we all “look at the numbers,” but I’m talking about the ability to slice and dice data like never before. And it’s not that data matter more than instinct; together they form a more effective dynamic decision-making duo.

• Circle of trust: Trust always has been the backbone of the broker-carrier paradigm, not unlike creating social networks on Facebook, LinkedIn or Google+. Applying the notion of social networking to freight through preferred networks can open new sources of capacity beyond one’s usual short list of go-to carriers. This is especially important for brokers and shippers wanting to expand their networks to potentially include thousands of qualified smaller fleets and owner-operators at a time when predictions point to even tighter capacity ahead.

• The price is right — or is it? Akin to the stock market or eBay marketplace pricing, brokers now can find instant quotes and market price indicators for dry van, flatbed and refrigerated freight — even partials — through spot-market exchanges and freight marketplaces. Eventually, inefficient negotiation through a series of phone calls will be replaced by booking capacity through a few clicks. For asset-based carriers, there is now the ability to set dynamic pricing on less-than-truckload based on key parameters, fundamentally shifting the dynamic of the third-party logistics provider/carrier relationship.

• Mobile life — the new normal: Trucking and logistics are perfectly suited to the mobile life. Studies show carriers and owner-operators placing greater dependence on these devices, including smart phones, tablets and apps, to run their businesses, whether that’s finding freight or load management. Cellphones are truly smarter, and apps are abundant. A 24/7/365 business operation is the new normal. GPS and location-based tracking are creating a trend toward relevant data (load alerts, for example) that can be proactively “pushed” to devices, replacing the passive “search-and-find” process.

Contrarians in freight will say that technology’s true impact on our industry has not yet been felt — and they’re right. However, with history as our guide, it’s clear that when we reach that technological tipping point, the effects will be swift.

So, what’s your company’s technology temperature for the coming year?

Based in Austin, Texas, uShip Inc. is an Internet company that operates uShip.com, a global online marketplace for shipping services.