In our last post, we talked about the value of a digital ecosystem in the long-haul trucking industry. A digital ecosystem uses technology to facilitate the exchange of goods or services between two or more parties. It allows its users to trade services, finances, or whatever is offered with one another at scale and enables all participants to benefit. A digital ecosystem removes friction and reduces transactional stress altogether.
Due to a highly fragmented market, coupled with a limited use of technology and a lack of transparency, the creation of a digital ecosystem for the long-haul trucking industry hadn’t been feasible in the past. But revolutionary technology is making waves by bridging the gap between all parties involved to enact change. But there is one thing that it will take to get all parties on board which is lacking in the current long-haul trucking industry, and that’s TRUST.
The Loyalty Shortage in the Long-haul Trucking Industry
Shippers, brokers, carriers, and drivers all suffer from an extreme lack of modern technology. Most of the freight industry runs on archaic software – or no software at all. Some studies indicate that 67% of shippers don’t use any software at all.1 They still rely on paper records.
This technology shortcoming has led to a lack of transparency and collaboration – where all players in the freight industry are left to work in isolation to optimize their individual business objectives. There’s a ‘perceived lack of common interest’ and hence, often great mistrust among shippers, brokers, carriers, and drivers.
Shippers, Brokers, Carriers, and Drivers All Have Their Own Challenges
Drivers are increasingly feeling overworked and underpaid. Wages aren’t keeping up with inflation. Historically, long-haul truck drivers have made up the difference by working longer hours, but due to tightening regulations and the advent of ELDs, this is no longer possible.
Carriers are struggling with driver shortages, rising costs, and lower margins. They fight to remain competitive on pricing and to maintain partnerships with their shippers. High spot market trucking rates have caused more carriers to abandon ‘stable relationships’.
Shippers are focused on remaining a “shipper of choice” to hold on to capacity. They must work on scheduling realistically, minimizing empty miles, and paying brokers and carriers faster.
Small and mid-size brokers struggle to remain competitive against large brokers and 3PLs on pricing and coverage. Freight industry brokers often pay out carriers long before being paid by shippers for a completed delivery, which is a real cash-flow killer.
To date, many efforts have focused on optimizing specific verticals of the industry – shippers, brokers, carriers, and drivers. But no one has been able to attain the holy grail of creating a platform that creates transparency across the entire freight industry. Clearly, it’s due for a much-needed overhaul.
Collaboration and value sharing enabled by a technology backbone is the way ahead. The bottom-line is that even with varying business objectives, carriers, shippers, and brokers can all benefit from working together to share in the benefit: a reduction of empty miles.
Reducing current empty miles by half will create $50B of new economic opportunity.
And this will result in:
- Brokers, carriers, and drivers making more
- Shippers paying less
- Benefits for all
SemiCab has created the digital ecosystem that unifies the discrete elements and fragmented players involved in the shipping process. It’s now up to the long-haul trucking industry to open itself up to the value a digital ecosystem can bring.
We’ve seen it in other industries…Lyft is currently valued at $15.1 Billion2, and AirBnb at $31 Billion3, imagine what’s possible for the long-haul trucking industry, the first step is to trust.
Are you ready to take that step? Learn more about the future of the long-haul trucking industry in our new eBook.