“Hang on, we’re in for a bumpy ride.”
Hardly a comforting thought, but one which Robert Voltmann, CEO and president of the Transportation Intermediaries Association (TIA), believes accurately describes the near future for freight brokers, 3PLs and their shippers and carriers.
The Food Safety Modernization Act has already assigned significant new accountability to brokers and 3PLs who are active in the food category. And for more than a year, transportation intermediaries have been fielding calls from shippers regarding the fast approaching (December 2017) implementation of the Federal Motor Carrier Safety Administration’s (FMCSA) electronic logging device rule, or ELD mandate.
“Our members have been hearing from shippers (about ELDs) for a long time, and many wanted all their carriers to be compliant more than a year ago,” Voltmann said. “The reality, of course, is that 90 percent of motor carriers are running five or fewer trucks and are more likely to wait until closer to the deadline, so we’ve been trying to pump the brake a little bit on shipper expectations.”
It goes without saying that brokers and 3PLs have a responsibility to protect their shipper customers by avoiding motor carriers that do not comply with federal laws. In fact, TIA’s model broker-carrier contract includes this assurance. But what TIA doesn’t want to happen is for new rules to expose its members to additional liability. As the countdown continues to the December 18 implementation of the ELD requirement, brokers and 3PLs are closely monitoring the compliance status of their preferred carriers and modifying their onboarding processes to ensure new carriers will have made the switch from paper to electronic logs.
As for their own technology strategies, Voltmann expects TIA members to continue to pursue opportunities to increase efficiency – particularly in an era of increased margin pressure.
“One of the reasons why the 3PL industry has continued to grow while intermediaries in other industries have shrunk is that 3PLs are technology adopters,” he said. “By and large, shippers are not transportation technology adopters. They are investing in technology that will improve how they make the things they make. Most motor carriers are not technology adopters. If the carriers are investing in technology, it is to allow them to operate trucks more efficiently. It is the 3PL who is adopting new technologies and putting human assets into place that improve the supply chain. And for the shipper, they are essentially doing that for free.”
Voltmann expects near-term technology investments to focus on optimizing back-office processes, an area in which, incidentally, new competitors such as Uber see the greatest opportunity. Matching loads with capacity in the most efficient and cost-effective way continues to be the brass ring for many transportation service providers, and brokers and 3PLs will explore new solutions that further automate this function.
Freight visibility is another area of intense interest for brokers and 3PLs, although some industry participants might have unrealistic expectations based on their experiences with consumer-oriented visibility solutions. Whereas Uber and Lyft enable users to track an approaching vehicle on a real-time basis, that’s not likely to be the dominant model for freight transport, according to Voltmann. “What the shipper really wants to know are the exceptions,” he said. “And the shipper wants to know the real arrival time, not some estimate that keeps changing like on Uber or Lyft.”