The pandemic created the worst supply chain entanglement anyone had ever seen before. But modern problems require modern solutions. Implementing digital brokerage is a great way to unplug the bottleneck in the supply chain. Going digital will push the freight industry forward and make it easier for companies to connect globally.
A recent report from consulting firm Accenture indicated that digital disruption is transforming logistics. And with the pandemic in 2020, that rang true more than ever. Due to the pandemic, digital supply chains have become a necessity for ensuring timely shipments and maintaining shipper-carrier relationships. Almost $17 billion has been invested in digital brokerage.
What Is a Digital Brokerage?
What Is a Brokerage?
A digital brokerage uses modern technologies to connect brokers, insurers, policyholders, and prospective clients. Digital brokerage automates business operations and transforms into paperless brokerage, saving time. Examples of digital brokerage companies include Fidelity, Charles Schwab, E-Trade, Interactive Brokers, and Robinhood. Proprietary trading firms registered as brokers may not advertise their services as brokers but use their broker status in a way that is integral to their business.
A digital freight broker is an online matchmaker that connects individual companies and shipping carriers with truck drivers. They typically use an online application with programmed algorithms to connect companies and truckers quickly and effectively.
Digital Freight Brokerage and the Pandemic
Thanks to the technological advancements in the supply chain, a new category of completely digital brokers is on the rise. For years the supply chain has been fostering digital capabilities thanks to moving transportation management systems (TMS) to the cloud, an influx of venture capital, and the arrival of digital freight apps. The digital freight brokerage movement began with companies such as Convoy, Transfix, Uber Freight, and Doft, which use self-service digital marketplaces to match shippers with carriers.
The pandemic revealed the fragility of the supply chain ecosystems. Known as the backbone of national economies, supply chains have needed to respond fast and flexibly. An example of this is the quick digital transformation of supply chains and delivery logistics. From computing to analytics, cloud services, and tracking software fueled by the Internet of Things (IoT), the digitization of the supply chain process has grown exponentially in the past few years. Seventy percent of retail and manufacturing companies have started a digitalization project in their supply chain operations.
Operators of supply chains are now using fleet management technology to ensure their process is safer and more efficient. Connected fleet management solutions use GPS to track and gather data on the operations and locations of their fleet.
With the unpredictable supply chain disruptions brought on by the pandemic, it can be difficult for freight brokers to develop long-term strategies. By adopting cloud-based TMS platforms, brokers have gained more visibility into their operations. They can record every shipment detail, often in real-time, and use that data to inform future loads and lanes. These technologies provide digital freight brokers with increased visibility and better process control. With digital data, brokerages can strengthen strategic partnerships between shippers and carriers and make the process more efficient.
The automation of digital brokerage also makes it easier for drivers and other customers to book freight services. Just pick the pickup and dropoff points as well as the weight of your freight. From there, you can be matched with a driver and your package will be taken care of. This is a much more efficient process than contacting several different drivers or brokers to organize the service and obtain quotations.
A digitized broker also makes repeat freight deliveries easier. Before automation, scheduling a repeat order was a long-winded process that included contacting your broker, receiving quotations, etc. But with digital software, delivery details and data will be saved from previous deliveries. This streamlines the process and is more efficient for customers who plan to use the service again.
There are a number of ancillary benefits, as well. Paperwork becomes easier with the digitization of brokerage documents. Having forms and contracts online saves on paper, which is good for the environment. Filing paperwork is easier to do online. Finally, digitizing the documents is a safer option during a pandemic, because the virus will not spread during a transaction.
The Future of Digital Brokerage
Digital brokerage is the future of supply chain management. Truck drivers have started and will continue to use mobile apps specializing in digital load tracking and freight matching for contact-free deliveries. New self-driving ventures focused on automated trucking are starting up, and platforms designed to match cargo-delivery needs to truck availability are gaining ground. There are also software-as-a-service companies that provide their customers with the ability to track shipments in real-time. Integrated monitoring systems will eliminate the need for truck drivers to check in continually with dispatchers and brokers along the journey.
As the pandemic continues, digital brokerage will continue to grow until companies and truckers can’t imagine a life without it.