Brokers

Digital freight matching helps brokers navigate tough markets

Automation is a hot topic across the logistics industry, promising increased profitability, greater efficiency and fewer headaches for those who turn their most tedious daily tasks over to technology. This has been especially true when it comes to freight procurement and load matching. 

A technological revolution and a pandemic-fueled capacity crunch came together to push digital freight matching into the spotlight over the past few years. The win-win solution offers brokers the ability to post loads and skip lengthy negotiation sessions, while carriers can accept loads in an instant. The time savings — coupled with brokers’ ability to have some control over load pricing — made DFM an attractive option during times of extreme market volatility.

Early on in the pandemic, McLeod Software saw this trend unfolding and set out to make digital freight matching as easy as possible for its customer base. 

In 2020, McLeod introduced its DFM web service API for its popular PowerBroker TMS, enabling users to integrate third-party freight matching solutions into their brokerage operations. While McLeod customers were already able to utilize several DFM products, the API gave them access to the business process automation tools most digital freight matching companies offer.

“One of the reasons we built the service was to give our customers the ability to leverage third-party relationships because they were looking at how to attract carriers they don’t even know about,” McLeod Software Product Manager Dacia Gulledge said. “We saw the market shift toward automation, and we saw the API as a way to provide an end-to-end solution to our brokers.”

For some customers, the DFM API has allowed them to do a sort of “test run” with automation. Investing in new technologies can be time consuming and expensive, so having a simple way to ensure a solution like digital freight matching is the right match for a company’s carrier base can go a long way in helping organizations plan for the future. 

“We’re really interested in trying to understand how tomorrow’s carrier is going to want to transact. We want to understand how they think about loads,” Steele said. “For us, the main goal is knowing how we will interact with carriers differently tomorrow than we did yesterday. This allows us to test what carriers want.”

While McLeod customers are enjoying the API, the company has long provided automated matching services. The difference, however, is that those services have historically been aimed at matching loads to carriers within a broker’s existing network. 

Having the ability to connect with new carriers directly in PowerBroker adds a new layer of service to the TMS, but its existing offerings continue to prove useful as well. 

“McLeod has always offered an internal matching service for brokers. We like to think about all the tools we offer within our TMS as a way to leverage existing relationships,” McLeod Software Product Manager Keri Hodnett said. “By matching loads to familiar carriers automatically, shippers do not have to sift through their contacts or rely on Excel spreadsheets. They can take advantage of existing relationships and generate those matches within PowerBroker as well.”

Automated load matching — whether with new carriers or within an existing network — has obvious advantages when capacity is strained and the market is unpredictable. As the market turns and capacity loosens up, demand for these solutions may initially cool off. The market is cyclical, however, and a slowdown will provide companies an opportunity to evaluate how digital freight matching plays into their overall strategy, no matter the market.

“The balance of capacity to freight is always changing. Over the last few years, we have seen a very capacity-strained market. DFM in general tends to do well when capacity is strained because a lot of people are scrambling to find capacity and source new carriers,” Gulledge said. “With the market shifting, I don’t see digital freight matching going away by any means. If anything, I think the relaxation of the market may give people some time to think about how to implement these tools when the market does tighten back up so they will be prepared.”

Click here to learn more about McLeod.

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