In my 2012 year-end blog on Trends in Transportation, I identified a number of areas where I expected to see some changes in 2013.  One area I highlighted was the expectation that we would begin to see more Innovation in Transportation.   In my view, Freight Transportation has lagged other industry sectors in the Innovation space.  I also questioned the shelf life of the current transactional model of Freight Brokerage.    Many freight brokers still rely on faxes, phone calls and e mail to run their operations.  In this era of tablet computers, social media and smart phones, this industry would appear ripe for modernization.

When you look at the consumer travel agency business, an industry somewhat analogous to freight brokerage, one can see the transformative power of innovation and technology over the past ten to fifteen years.  It looks like some of these changes are finally coming to the freight brokerage industry. Here is a peak at two companies that are likely going to transform this sector of the freight business.

It is not a joke.  It is happening out there.  The fact that it is happening caused a tidal wave of comments on the LinkedIn “A Truckload, Trucking, Logistics, Supply Chain, 3PL, Distribution group” over the past week.  Here is a sample of what the group members had to say.

“I have asked for and gotten almost $4.00 per mile on loads from the Central Valley in California to Portland/Seattle. These are reefer loads, not dry, but that's a good rate...unless you know beforehand that IF you can find a load back out of that area you will be turned down for the load a lot of times if you want more than $0.89 per mile.  On that lane you’ve got to get your money going in...you won't get much out of there,” stated one trucker.

An Operations Manager at another trucker stated, “As someone who has been in this business a long time, I really don't see how $ 3.00 - $ 4.00 a mile rates would be considered greed. The cost associated with transportation - insurance , fuel , equipment, taxes, maintenance have all increased about 4- 5 times over what they were 25 years ago while the rates in most lanes have remained pretty much the same. Brokers are taking a bigger cut in most cases, not all.  Generally 8- 10%, used to be the norm”.

“I guess it depends on the load itself” stated a Transportation Planner at a Freight Agent. “Shorter miles equal higher rates. Some carriers are just plain greedy, but then some are working the negotiations, asking for higher rates knowing they will have to take less, but hoping to find a happy medium”.

A sales person/dispatcher at a logistics company provided these insights.  “See, these are longer miles between 950 miles to 1150 miles. . . I am all about paying a carrier a fair rate, offering more than the bigger brokers, but to pay $3-$4 per mile is outrageous . . .