The truckload industry has long been one of America’s largest employers — in 2021, the market was valued at more than $212 billion. Yet despite the colossal size of freight operations, it has been one of the slowest spaces to adopt new technological advances.
Now, however, chaos from the pandemic appears to have finally propelled trucking companies into the 21st century.
Like any industry, trucking has experienced ups and downs, from increasing fuel prices to worker shortages. However, with the implementation of artificial intelligence and creative technology platforms, companies now have more shipping options than ever.
Businesses are moving away from archaic long-term freight contracts, chasing cheaper and contemporary alternatives. The new, digital and uncontracted freight era has begun.
For years, the freight industry has been suffering from outdated practices, with some companies still manually running their offices with pen and paper. But with the many logistical innovations now available, it’s no surprise that the value of digital technology in the supply chain is expected to top $23 million by 2027.
This computerization trend promises to revolutionize the way that trucking companies function, particularly for small to medium-sized businesses.
With the price of contracted freight continuously rising and consumer buying patterns always on the move, signing up for long-term contracts today can be risky. The increasing cost of such agreements can also price a lot of smaller businesses out of the market.
More companies are utilizing digital freight brokers, as well as AI-powered logistics platforms. By taking advantage of these digital tools, businesses can modernize their coordination, input supply chain best practices, and decrease company spending.
One way that AI can assist is through organizing cargo and route planning to allow for optimized backhauling. This is cost-effective for companies, ensuring speedy freight delivery while supporting a more sustainable fuel economy. AI-assisted backhaul planning is also ideal for independent drivers working with brokers, as they can ensure they’re optimizing capacity on every journey.
Last-mile planning is another invaluable digital resource, with a direct impact on customer satisfaction. Since over half of the total cost of logistics companies is spent coordinating the execution of the first and last miles, this process must be meticulously fine-tuned. The software can provide an ideal packing sequence for parcels, while plotting the most economical route for delivery.
Similar to apps like Uber, AI algorithms can monitor real-time weather and traffic data, and choose alternative routes if issues occur. Customers want the latest information regarding their parcel, so allowing the consignee a live-view of their package with an estimated arrival time is ideal for a positive customer experience.
AI-powered freight tools ensure that typically tricky or tedious tasks are completed at maximum efficiency and minimize the risk of human error. This frees up the time of skilled workers from performing mundane and non-productive activities.
Innovative technology can also be an effective cost-cutting tool. Research has shown that early adopters of AI in supply chain management have improved their logistics costs by 15%, a savings that is only set to increase.
For smaller business owners with irregular shipping patterns, reliance on a digital freight broker can yield significant financial benefits, as customers only pay for what they need. Companies don’t need to lock into expensive freight contracts, instead paying a one-off fee directly to the shipper. Brokers only require shipment information with a price, and local drivers can respond to this offer instantly.
Shippers, meanwhile, can cut costs by avoiding long and often restrictive contracted freight agreements. They can set their own prices, which local drivers can view and then renegotiate.
Extended wait times have been an enduring toothache for the logistics supply chain. By using a broker, companies need only request transport once their shipment is approved and ready to travel. Gone are the days when idle time ate into company profits.
Businesses of all sizes can benefit from software that accurately forecasts orders and monitors capacity. The system generates further advantages by analyzing fleet size, delivery routes and backhauling opportunities, then offering suggestions for realizing long-term cost savings.
With AI technology constantly evolving, modern automation can maximize output and resolve issues in multiple areas, from driver safety to pollution control, while also allowing businesses to avoid costly shipping contracts. Integrating intelligent software into the daily running of freight companies is not only a wise business decision but a necessity for the future.
Dimitri Fedorchenko is founder and chief executive officer of Doft.