The digital freight brokerage market is chiefly galvanized by increased digitalization in the freight brokerage process to alleviate the inability of the overall logistic system. Third-party logistics companies desire to close these gaps for a commission. However through a manual process that can sometimes leave drivers discouraged and empty still. For precedent, a truck’s average empty mileage can run anywhere from 12% to 28%. The overall estimation of American truck’s annual empty miles is 50 billion miles, and UDS 1.38 is the average operating cost per mile in the trucking industry. According to the stats, the global freight brokerage market was valued at USD 854.9 million in 2019. And is expected to grow at a CAGR of 31.3% during the forecast period, 2020-2027.
How does digital brokerage work?
The technological digital freight brokerage platform such as Lgoa endeavors various shippers and truck drivers to match requirements and services, to ultimately deliver the freight where it needs to go on a one-time basis. Shippers need to input information on the pick-up spot, the weight and number of pallets, the destination, the timing, and other admissible details. Once the shipment is picked up. Shippers can monitor their shipments online through the tracking id from the company site in real-time. And on delivery, Lgoa endeavors a proof delivery photo along with a photo of the signed bill of landing, stored on the shipper platform. This may simplify the paperwork and requires no faxing.
Digital brokerage services remove the human middle man i.e. the broker. Though various digital freight brokerage companies have customer service available and may rely on that service to remain in business. Instead of the freight brokers on the phone playing matchmaker, the technology platform act as the broker. One can see that most of the companies have freight brokerage licenses. The vet a trucking company like a traditional broker would do.
LGOA vetting, for example, makes sure that the trucking company has the proper inspection and safety history, as well as the equipment needed for the LGOA requirements. As part of the boarding process, carriers and drivers need to administer all the compliance information. Once this is in the system, the trucking company can bid on any proposal that meets the criteria of the brokerage company.
Who needs the help of the digital brokerage?
The rise in digital freight brokerage companies comes on the heels of a growing truck driver shortage. This has caused the trucking company to raise the price of the shipment from one place to another. This may delay some of the shipments in the supply chain. Shippers with smaller or less regular hauling necessities are at a disadvantage. As they need to rely more on the spot market prices. Without long-term contracts locking in a price and guaranteeing space. These shippers are at the uncertainty of big pricing fluctuations and shipping prospects.
Are you ready for the digital future of your freight brokerage business?
Many astonishing developments have come out of the supply chain’s digital adoption trend so far. But this is just the beginning of the digital future of freight brokers. Experts anticipate further developments, such as predictive algorithms that can contest carriers with loads and blockchain-based tracking for logistic shipments. Many leading freight brokers are already investing in tech strategies to stay ahead of the curve. Not sure where to start with your technology shift? Begin by pinpointing key opportunities to scale, reduce costs or enhance the profitability of your freight brokerage business. The chances are good that an enterprise software can suite exists to assist you to achieve your goals.
Future of Digital Freight Brokerage
One of the benefits for everyone is that various truck drivers can be more adept, letting them book loads on return, so they are not driving empty miles. The American Transportation Research Institute estimates that more than 20% of miles driven by various trucks are “empty miles”. These are miles that one can use potentially to haul freight. But it is often tough for various carriers and drivers to coordinate the return loads. The digital freight brokerage industry is in its infancy. In LGOA’s recent IPO filing, they cited the American Trucking Association’s statistics that the 2017 US trucking market $700 billion, of which the brokerage portion was $72 billion. LGOA estimates that their 2018 booking was $359 million, only 0.1% of the total trucking market.
This is how the digital freight brokerage company can benefit an individual to grow his/her logistic business. If you still face any difficulty in running your logistic business. Then you can contact LGOA the leading logistic company in California for their assistance.