The Scheduling Standards Consortium (SSC) today announced the achievement of a landmark milestone — the publication of its Technical Standard for developing scheduling application programming interface (API) for transportation management systems (TMS). Now accessible on the open source community, GitHub, the Technical Standard will bring more cohesion and resiliency to the movement of goods, making it easier to book and manage appointments, optimize processes for carriers, shippers and receivers, and drive operational efficiencies for the industry at large.

Scheduling system and interface fragmentation is a significant point of friction amongst carriers, brokers, and shippers. As the industry relies increasingly on an integrated network of providers and solutions to manage the end-to-end lifecycle of each shipment, it’s vital to define and share a consistent data architecture and API standard for the distribution of scheduling information. The SSC was formed in December 2022 to establish the industry’s first formal set of scheduling API standards.

Today, the Technical Standard is available for TMS developers on GitHub, encapsulating eight months of rigorous technical and strategic collaboration. The work ushers in an era where scheduling systems work seamlessly, transcending the barriers that have long hindered efficient data sharing among shippers, carriers, and brokers. The SSC’s API-based approach will allow companies to access the latest data and make smart decisions to increase efficiency, reduce empty miles and waste, lower costs, and improve service outcomes. As each company aligns with these standards, the industry can better orchestrate freight needs with data-informed systems.

“This moment is the culmination of everything the SSC has been working toward to date. Our objective was to develop a technical standard that would allow scheduling systems across the freight industry to consistently and efficiently communicate with one another, and that’s exactly what we’ve achieved,” according to the SSC’s integrated product leads from Uber Freight, J.B. Hunt and Convoy; Chris Chmielewski, Greg Granata and Brian Holley respectively. “The logistics industry is modernizing at an incredible rate, continually improving conditions for seamless digital communication between systems. Standardizing this communication now promises substantial future benefits. Our aspiration is for all stakeholders — brokers, carriers, shippers, and receivers —to recognize the value that these standards provide and embrace them so all parties can save time, money, and ultimately, deliver value for their customers.”

TMS Leaders Invest In Adoption and Integration Efforts

As industry leaders adopt these standards, a significant transformation is set in motion. Shippers stand to benefit from collaborating with these forward-thinking TMS providers, whose investments in integration translate to increased efficiency and cost savings in their operations. This harmonization signifies more than just technical progress; it underscores a dedication to innovative solutions that enhance the logistics ecosystem as a whole.

“At One Network, we’re not just embracing the publication of the SSC Technical Standard; we’re committing to implementing and utilizing these standards to enable greater efficiency across the logistics landscape in 2024,” said Greg Brady, Founder and Executive Chairman of One Network Enterprises. “Our dedication to these guidelines goes beyond rhetoric; it’s a strategic move that will empower shippers and carriers with streamlined operations and enhanced data sharing. As we weave these standards into our systems, we’re driving transformative efficiencies, and ultimately, fostering a more connected and agile logistics ecosystem.”

“At BlueYonder, the unveiling of the SSC Technical Standard marks a significant stride towards establishing more efficient supply chain systems,” said Chirag Modi, Corporate Vice President, Industry Strategy. “Embracing these standards is not just an affirmation; it’s a commitment to bring additional API capabilities to the industry’s landscape. We will weave these standards into the fabric of our operations to improve data sharing, foster operational fluidity, and unlock new dimensions of scheduling efficiency. As we march through the latter part of this year, our resolve to embrace and implement these standards echoes our dedication to delivering value to our customers and the entire logistics ecosystem.”

“We’re actively implementing these standards at Oracle and charting a course toward enhanced data sharing,” said Srini Rajagopal, Vice President of Logistics Product Strategy at Oracle. “We encourage shippers to engage with their software providers to urge progress on SSC Technical Standard integration. Together, we’re spearheading an era of innovation that will benefit the entire logistics community.” 

Further Industry Momentum Supports the SSC: New Collaborators Join the Ranks

Embracing the momentum, the SSC welcomes several additional distinguished collaborators, including:

• DHL Supply Chain, the Americas leader in contract logistics and part of DHL Group.
• Lineage Logistics, a global leader in the temperature-controlled logistics industry.
• Mastery Logistics Systems, a comprehensive cloud-based SaaS transportation management system designed to manage complex transportation needs for shippers, carriers and logistics service providers.
• Transportation Insight & Nolan Transportation Group, part of TI Holding Company, bring over two decades of multi-modal expertise and technology to the logistics industry and rank amongst North America’s top 10 largest logistics companies.
• Ryder System, Inc., the leader in supply chain, dedicated transportation, and fleet management solutions.
• Worldwide Express, a full-service, non-asset-based logistics provider offering more than 115,000 customers access to industry-leading small package, truckload and less-than-truckload shipping solutions.

These organizations join existing players Convoy, J.B. Hunt, Uber Freight, Arrive Logistics, Blue Yonder, Coyote Logistics, E2open, Echo, One Network Enterprises, and Oracle.

The SSC continues to invite industry collaborators and advocates to support the Technical Standard across the industry. For more information or to learn how to get involved and contribute to the SSC, please visit www.FreightAPIs.org.

Introducing the SSC Badging System

In addition to this milestone, the SSC is excited to introduce its new badging system designed to recognize and differentiate industry participants actively contributing to the development and adoption of scheduling API standards.

Innovator Badge: This badge is awarded to companies that actively support or contribute to the creation of the scheduling API standards or the SSC itself. Innovators play a crucial role in shaping the future of the industry by sharing their expertise, insights, and resources.

Early Adopter Badge: TMS companies that verbally commit to integrating the SSC Standards into their products by the end of 2024 are eligible for the Early Adopter badge. These forward-thinking organizations demonstrate their dedication to driving industry-wide improvements and efficiencies.

The SSC’s badging program will provide clarity and transparency within the industry, helping businesses choose partners that are actively advancing scheduling standards. It will also promote collaboration and innovation among industry players, driving further progress in the development and implementation of API standards.

 To learn more about the SSC, visit www.FreightAPIs.org.

About the Scheduling Standards Consortium (SSC)
Founded in 2022 by Convoy, J.B. Hunt and Uber Freight, the Scheduling Standards Consortium (SSC) was established to create freight appointment scheduling standards that provide consistent visibility into the supply chain. Together with shippers, carriers and intermediaries, the SSC aims to simplify the integration of systems across the fragmented ecosystem and generate efficiency across the freight industry. To learn more, visit www.FreightAPIs.org.

The post Scheduling Standards Consortium Achieves Landmark Milestone: API Standards Published appeared first on Convoy.

EDI revolutionized communication by providing a standardized format for data exchange and reducing errors associated with traditional methods like mail and faxes. By defining standardized message formats and communication protocols, EDI enabled consistent communication between participants, akin to a common language that everyone understands. This standardization was achieved through collaboration among industry players seeking more reliable and efficient ways to communicate.

Modern web APIs have more recently revolutionized the tech industry by also making it possible for different organizations to easily and efficiently communicate with one another. Unlike EDI, web APIs are often designed and implemented by a particular company to suit their needs and then made publicly available for anyone to use as they see fit.  Implementers have the freedom to choose from various API protocols and define message formats, affording them flexibility and customization options. This flexibility is advantageous for implementing solutions quickly and leveraging a vast ecosystem of tools and expertise.

Modern web APIs have more recently revolutionized the tech industry by also making it possible for different organizations to easily and efficiently communicate with one another. Unlike EDI, web APIs are often designed and implemented by a particular company to suit their needs and then made publicly available for anyone to use as they see fit.  Implementers have the freedom to choose from various API protocols and define message formats, affording them flexibility and customization options. This flexibility is advantageous for implementing solutions quickly and leveraging a vast ecosystem of tools and expertise.

Companies such as Project44 and Fourkites provide innovation in the form of location data aggregation and normalization across various sources, and this data is made accessible by API. Tech-forward companies like Convoy are able to easily integrate with these APIs to provide seamless experiences and valuable insights to our shippers about the locations of their shipments at any given time.

A common, valid criticism of APIs replacing EDI is that there is no established standard for how different companies should communicate via APIs. The lack of a common language would hinder seamless communication and lead to an explosion of bespoke interactions which would be a large step backwards towards the pre-EDI world.

However, it’s crucial to note that APIs can be defined using standardized communication protocols. One approach could be to define APIs that adhere to existing EDI message standards. Alternatively, they can be used to define a completely new set of standards that may offer improvements over current EDI practices. An example of this is the FreightAPIs effort, which aims to establish new standards using modern technologies, starting with scheduling APIs.

With this context in mind, it becomes essential to address the core questions:

1. What advantages do modern web-based APIs offer over EDI? APIs provide flexibility, customization, and the ability to leverage a vast ecosystem of tools and expertise. They enable rapid development and deployment of new features and products, supporting innovation and growth. By utilizing standardized communication protocols within the API framework, industry players can ensure compatibility, scalability, and seamless integration.
2. Do the EDI message standards need to be replaced with something new? The answer to this question is not straightforward. While EDI has served as the backbone of communication in the freight and logistics industry, it is not without its limitations. The fragmented landscape of EDI, with different versions and methods of communication, has resulted in significant challenges for integration and interoperability. APIs offer the potential to not only simplify adoption, but enable usage in domains previously inaccessible to EDI such as mobile applications and more. However, while APIs have a lot of benefits, the decision to replace EDI entirely requires careful consideration so that we can build on the foundation laid down by EDI.

In conclusion, the future of communication in freight and logistics lies in finding the right balance between leveraging the advantages of APIs and addressing the challenges presented by the current state of EDI. APIs offer flexibility, innovation, and compatibility with modern technologies. Simultaneously, the industry needs to explore opportunities for standardization within the API framework, leveraging the lessons learned from EDI to ensure seamless and efficient communication.

By engaging in a thoughtful conversation about the improvements needed within the existing EDI landscape, we can collectively work toward leveraging modern communication protocols, defining and adopting industry-wide standards, and shaping the future of communication in the freight and logistics industry for the better.

The post The future of communication in freight and logistics: examining APIs and the potential for improvement appeared first on Convoy.

Later, Dorothy and Emerj’s Head of Research, Daniel Faggella, discuss how Google, AWS, and Microsoft are lowering the barriers to entry for SMEs looking to start in AI and democratizing data science roles that were highly specialized just a few years ago.

Listen to the podcast:

The post Winning buy-in from leadership for AI projects, with CTO Dorothy Li appeared first on Convoy.

This model gets materially better with scale, using technology to address the industry’s existing limitations and the reasons that trucking remains so fragmented. Hybrid carriers have a digital truckload marketplace, a universal pool of trailers, online drivers and equipment, and broad industry integrations, all running on a technology platform that uses data and AI to orchestrate everything, manage carrier quality, and generate actionable insights for shippers. By removing silos around truck and trailer capacity, these truckload platforms will benefit from network effects and other economies of scale, making them better and cheaper at scale and giving shippers compelling reasons to consolidate their freight spend for the first time.

At the end of the day, there is a reason that trucking is so fragmented and hasn’t seen benefits of scale. Here we dive into why this is and why it is now changing.

The problem: bringing economies of scaling to the truckload industry

In most transportation and delivery businesses, economies of scale, including network effects(1), allow the leading providers to gain cost and service advantages for their customers, causing the market to consolidate around them. The parcel and less-than-truckload (LTL) delivery businesses are good examples of this. No single package takes up an entire truck or trailer, so each customer that ships something helps cover the cost of the delivery for everyone. The more participants, the more economical it becomes. Additionally, with more customers and packages, the shipping service can add more deliveries per day, making it even more convenient for everyone.

This has not yet happened in the truckload industry(2), where limited advantages of scale have allowed fragmentation to persist as a viable sourcing strategy. Shippers work with dozens or even hundreds of truckload carriers and brokers who compete for their business. This is currently the best strategy for shippers to get competitive coverage, pricing, and service, but it leads to a transitory or what-have-you-done-for-me-lately mentality that limits the opportunity for each individual provider to think long-term, and it prevents big bets that could lead to step-function improvements in service and cost. For this to happen, shippers need to be presented with a fundamentally new model.

This persistent fragmentation in truckload is unusual. Most of the time, when companies source services, they choose just one or a few providers, not dozens or hundreds. They want to reduce the overhead of managing vendors and gain the volume discounts and priority service of top customers. For example, companies pick one payroll processing system, hire one partner for warehouse logistics, and contract one food services vendor to manage their cafeterias. The leaders gain advantages as they get bigger and customer growth accelerates.

Metcalf’s law says that a network’s value is proportional to the square of the number of participants (n^2); said differently, its value increases exponentially as its users or participants grow. These models clearly benefit from this effect. Why not truckload?

Why do network effects exist in these areas but not truckload?

Unlike in the parcel or LTL examples, each truckload delivery is financially viable on a standalone basis. Its cargo fills the entire truck on its own, and it moves point-to-point along a single route, so its success does not rely on any other participants in the network. For this reason, the barriers to entry are also very low. Nearly anyone can buy a truck or fleet and start hauling freight on similar footing to the rest of the industry.

Therefore, the network effects in truckload come not from optimization at the individual truckload shipment level but rather primarily at the system level. In parcel, wasted “space” creates the primary inefficiency to solve. In truckload, it is wasted miles (driving empty) and wasted time (waiting to load/unload) that creates the primary inefficiencies to solve. For example, combining multiple shippers’ freight networks to identify the best combinations of loads (routes, backhauls), optimizing appointment times and drop-and-hook programs to reduce waiting time, and ensuring that the best-located truck is matched to each run to reduce empty miles.

Unfortunately, many of these truckload networks are walled off from each other today. For example, the business model of the market makers who are in the best position to orchestrate the industry today – large truckload brokers – often operate on a load-by-load basis and fragment their own network of trucks and shipments into many small marketplaces, each managed by a carrier sales rep with a portfolio of carrier relationships. Naturally, carrier reps are reluctant to share their trucking relationships with others, which blocks a true network from forming as the brokerage scales.

Asset carriers face challenges in scaling and optimizing stitched-together networks

On the other hand, asset-based carriers run businesses predicated on effective network planning, which shouldn’t come as a surprise. While a typical broker is “asset light” — their primary cost being wages to employees who earn a commission for sourcing loads from shippers and finding trucks to do them at a lower cost — an asset carrier’s primary costs are their assets (trucks and trailers) and fixed driver costs. Not only do they need to be smart about making enough money to cover their variable costs, but also to cover their cost of capital for the assets they own. Thus, their focus is on asset utilization. They consider how different shippers’ networks overlap, and they attempt to stitch together a balanced portfolio that maximizes the utilization of their assets. For example, in an ideal situation, a carrier would find a backhaul or other symmetrical route between two companies that ship in different directions, creating an efficient loop for their drivers. In another case, they might start with a pool of trailers at one facility that ships to several destinations and, over time, fill in backhaul contracts to recover the empty returns.

However, as things move from planning to execution, it becomes clear that forecasting is often more art than science. Trucking is messy; the allocated pool of trailers and dedicated drivers are more fixed than daily or weekly fluctuations in demand, the necessary appointment times for live-load scenarios aren’t always available, and facilities, trucks, and drivers get delayed. And if something goes wrong, changing the appointments and driver schedules is cumbersome. The asset model is rigid by design, making it hard to be resilient when the unpredictable inevitably happens. Holiday weeks are a typical example of this. For example, leading up to Labor Day weekend, load volume spikes and outstrips trailers, leaving shippers to fail over to find the live-loaded trucks on the spot market. During off weeks, when volume dips, they pay trailer underutilization fees.

Adding or removing trailers quickly is expensive and operationally difficult. Trailers are committed, and the drivers have a system. Thus carriers manage a constant tension between service levels to shippers on the one hand and asset utilization on the other hand. And even though most asset carriers also run a traditional truckload brokerage to gain flexibility – re-brokering up to 40% of their freight to other carriers (3) – it is not seamless with their own operations, and its costs and service levels often don’t hold up to the commitments they’ve made.

All of these dynamics reduce service flexibility and lead to local optimizations and sub-scale marketplaces that lack network effects.

A lack of scale effects is also evident in that trucking brokerages and carriers do not gain operating leverage or performance advantages from scale

For example, you can see below that for several top national brokers, every incremental $ of net revenue requires proportionally the same investment of additional operating expenses. In other words, these businesses operate linearly, without major network or scale effects.

This doesn’t change as brokerages or carriers get bigger. In 2018 I listened to a panel discussion on trucking at a conference. A new-to-truckload executive shared that after looking at the financials of over a dozen public and private brokers, he had a discovery to share — all of them, from sub $100M to several billion in revenue, had roughly the same unit economics. The large, national players could cover the largest shippers across more regions, but they didn’t do it better. Others in the room echoed this for asset carriers, and others shared that in some cases, they became slightly worse with scale because their overhead increased, and they struggle to maintain the same quality standards, pricing controls, and network balance.

It isn’t that brokers and carriers don’t get better as they learn a facility’s operations or build density on a lane. They do. However, the financial improvements are localized to that specific opportunity and quickly reach a plateau. Similarly, those that add offices and employees to gain national scale are able to service larger national accounts, but as they grow, each incremental shipment costs about the same to support.

Finally, in most cases, shippers need multiple providers to meet their needs. Some of their freight is predictable and runs drop & hook, best for asset carriers, and some is less predictable and benefits from a broker’s flexible capacity. For national shippers, there isn’t one carrier or broker that is “best” in all regions of the country. And at the end of the day, because they can’t precisely forecast their volumes unless they pay for fully-dedicated capacity, shippers can’t count on their carrier or broker partners to reserve capacity for all scenarios. They simply need redundancy, opening the door to many providers.

All of the above conditions across asset carriers, brokers, and shippers’ truckload networks have created antibodies to consolidation. The Vice President of a major national U.S. retailer summarized this to me by saying, “We have hard caps built into our system. I can tell you that whenever we relax this and give a huge award to one carrier, even a carrier-of-the-year winner, it backfires, and their service drops the next year, and we move them back out.”

To date, a model that gets more efficient and better for shippers as it scales has not existed. As such, the conditions for significant industry consolidation and simplification have not existed previously, but that is now changing.

Enter the hybrid carrier, creating the path for economies of scale

A hybrid carrier brings together the best of asset carriers and truckload brokerages, using technology and open capacity marketplaces and shared trailers to get better and cheaper with scale in a way that we have not seen in the truckload industry. Over the next decade, a handful of hybrid carrier-enabling platforms will emerge and scale as they power this transition, giving today’s brokers and carriers the opportunity to deliver a broader set of service offerings with higher performance, better cost structure, and more data-driven insights for their customers.

The key ingredients of a hybrid carrier include:

1. Universal pool of trailers, all sensor-enabled and available to the carrier network for both live and drop-and-hook loads. 

The shared trailer pool is not tied to a given facility or route, so it can quickly grow or shrink with weekly volume changes faster than traditional carriers. This allows backup and spot loads to run as drop & hook as well. Any carrier on the platform can move a pre-loaded trailer, rent an empty one, or keep it after a delivery to use for other off-network jobs before later returning it. The return locations and times are designed to get trailers to where they are most needed on the network (or predicted to be needed by AI). This flexible return and rental program reduces relocation costs and allows carriers to find more backhauls. The platform maintains the pool.

2. A single digital marketplace for truckload volume and capacity. 

Hybrid carriers have access to vast pools of carriers and owner-operators. To drive network effects, they need to know that their path to getting access to the best freight at the best rates is via the digital marketplace, not negotiating over the phone. If their ideal job is out there, they can get it. This brings energy to the marketplace, which includes single jobs, batches, dedicated runs, and more. The variety of options allows for a trade-off between performance and cost. This results in asset-like visibility, availability, and performance, even with minimal lead time.

3. All drivers are online and connected throughout the job workflow.

It isn’t enough to have some of your carriers/drivers do some of their tasks online. To give the hybrid carrier the greatest opportunity to harness efficiencies and find opportunities, all drivers and trucks need to be online, when on the clock, for all the steps. Drivers share data and documents, offer visibility, handle detention and accessorials, manage payments, self-service exception handling, and more. The tech helps drivers keep moving to make more money and get paid faster. The visibility helps the platform learn and become more efficient. Today, the trucking companies most likely to use the app have < 10 trucks.

4. Digital integrations with shippers for seamless communications and data sharing.

Hybrid carriers have digital connectivity into a broad range of shippers via TMS and other EDI or API integrations. These allow for automated tendering, routing guide updates, spot load bidding, appointment scheduling, and financial processing.

5. Technology platform to orchestrate supply & demand AND load execution.

A hybrid carrier is too complex to run only by hand. The platform orchestrates the pricing and matching, provides self-service tools for brokers and carriers, tracks and manages carrier compliance, monitors and repositions trailers, and supports workflows for tendering, load creation, appointments, visibility tracking, payments, insights, sustainability reporting and accounting (e.g., GLEC framework).

Over the last decade, billions of venture dollars have gone into the truckload freight industry on the promise of digital transformation. That investment spurred, amongst other important innovations, the first generation of universal trailer pools and digital platforms for truckload brokerage, including many of the capabilities listed above. These platforms have remained proprietary, but this is changing. In the coming years, we will see some or all of these platforms open up, and the next wave of innovation will be built on top of them, enabling today’s brokers and carriers to become tomorrow’s hybrid carriers too.

As this happens, the leading platforms will only get better, leading to increasingly better cost, service, and insights for shippers. For the first time, shippers will have a compelling reason to consolidate their freight onto fewer providers.

The proof, as they say, is in the pudding. While it will take years to know exactly how this plays out, Convoy is one of the companies that has invested in building a hybrid carrier platform already. The results that we have seen from our V1 are very promising, and here are a few examples.

Consolidation leads to lower operational costs per load and better performance

There are material operating cost advantages when shippers consolidate more of their freight onto one hybrid carrier. The example below shows this for Convoy’s current offering, which is powered by our hybrid carrier platform. In addition to cost reduction, we also see improvements in on-time service performance.

More density continuously delivers more efficiencies and lower trucking costs

As the volume of loads and trucks in a market grows, network density increases, and the odds that a carrier finds their ideal load(s) (ideal timing and route) increase, reducing waste and costs. This phenomenon isn’t new; however, in most cases, brokers see the gains tap out and plateau relatively quickly. Instead, Convoy sees the gains come in waves with each efficiency, including overall density, load batching, appointment time optimization, flexible trailers, etc. The system continues to improve as it scales.

Flexible drop & hook matches reality of shipper demand, allowing continued service 

Hybrid carriers enable flexible drop & hook, which we have observed to successfully handle rapid changes in freight demand without needing to failover to live spot or paying underutilization fees.

An efficient, digital marketplace absorbs spikes in demand without spikes in staffing or compromising service quality

Hybrid carriers can handle volume spikes with minimal impact on service quality because of the scale and automation of the marketplace.

This pattern was maintained through the volatility of COVID. The efficiency of a hybrid carrier-style network provided elastic capacity with high tender acceptance rates and helped maintain superior on-time performance relative to the industry across market cycles.

The truckload industry has long been held back from enjoying the efficiencies and service benefits that come from economies of scale…but that is changing and changing fast. After proving to ourselves, our shippers, and our carrier network that there is a new way to manage truckload that DOES, in fact, get better with scale, we have begun to open up our platform to the broader industry.

Our goal in doing this is to accelerate the trucking industry’s transformation towards a more efficient future. That is only possible by breaking down the walls that exist across the industry. These walls that exist within and across shippers, within and across brokers, and amongst carriers’ assets are impeding the tremendous benefits that can come from network effects and other economies of scale within any single broker and across the entire industry.

Fortunately, the walls are already starting to come down. Within Convoy, our marketplace for truckload carrier capacity is unfettered by individuals’ various books-of-business, and our trailers operate in a universal pool across facilities and carriers. We recently opened this platform up for other carriers and brokers to use as well, alongside our first party truckload business. The nearly 20 brokers and carriers that are using it today save an average of 15% when they find a more efficient truck on our platform than on their own. And as we release more features and capabilities into this externalized, standalone platform, it will only get better, and momentum will only build further.  

As the now famous quote, most often attributed to William Gibson, goes, “The future is already here.  It’s just not evenly distributed.”  Never before has that been more true than it is today in the US trucking industry.

To learn more, inquire at info@hybridcarriers.com.

1. The Network Effect in Supply Chain and Logistics
2. Economies of scale in truckload exist mostly for the individual truckload and the efficiency gained by hitting the maximum weight or filling all of the space inside the truck (“weighing out” or “cubing out”).
3. Latest SEC Filings Reveal Major Trucking Companies Still Outsourcing Vast Amounts of Freight

The post Driving change: how hybrid carriers will finally unlock economies of scale in trucking appeared first on Convoy.

Convoy’s CEO & Co-founder Dan Lewis recently joined Charles Trevail on the Outside In podcast to share how Convoy is addressing those industry challenges head-on, while also reducing waste, enhancing the quality of life for truck drivers, and lowering costs for shippers.

Listen to the podcast episode to learn:

• The challenges and opportunities as the industry goes digital and the lines between brokers and asset carriers blur
• How, with persistent effort and research, Dan was able to find the key value proposition for the early adoption of Convoy’s mobile app among truck drivers
• Why cutting “empty miles” is the most effective route to sustainability in the freight industry
• The potential of trucking’s semi-autonomous future, where humans and robots will join forces in “team driving” 
• Advice for aspiring entrepreneurs on surrounding yourself with supportive, long-term-minded people

The post Convoy’s CEO Dan Lewis on the digital transformation that’s happening in trucking appeared first on Convoy.

Together, they discuss the topic of predicting freight shipments with artificial intelligence. Dorothy explores a logistics use case for AI capabilities in predictive inventory and the impact it is having on manufacturing writ large. Still, there are many challenges, among them that truckers and freight carriers don’t have the equipment (mobile apps, GPS) that other last mile and delivery workers have. They also examine where AI can be applied to help schedule deliveries to avoid unplanned downtime.

Give the podcast episode a listen.

The post Convoy’s CTO Dorothy LI on predicting freight shipments with AI appeared first on Convoy.

At North America’s largest tech conference, Collision, I was asked the question “Is this the end of globalization”?

Globalization is not close to being dead, but the risk premium of being dependent on a global supply chain to run your business is higher than it has been in decades. 

Why is globalization sticking around despite all the challenges? At the most fundamental level, natural resources, education, and labor costs are not spread evenly around the world, and most of the products and foods that we enjoy flow through multiple regions or countries from source to consumption. We would have to greatly alter our habits and lower our quality of life if we did not source and produce goods around the world, and generally people do not make that choice. For example, a ballpoint pen’s steel tip, plastic tube, and ink are all sourced from different countries before being shipped for manufacturing in France or the U.S., and then shipped yet again to a retail store or distributor. People want ballpoint pens. A quick trip to the supermarket offers grapes from Chile, avocados from Mexico, peppers from Peru, spices from India, and tilapia from China. A single package of Lipton tea includes leaves from dozens of countries and production occurs in lower cost regions. Without major changes to what we buy, we simply can’t source, produce, and consume everything we rely on from just one region or country.

Improved quality of life isn’t just for developed countries like the United States. Global trade and production of goods have caused money to flow into a wider range of producer countries and enabled us to generally increase the average well-being of people around the globe (the economist), including higher average incomes and better local infrastructure.

The power of so many countries’ with trade dependencies led to relative stability in global trade, even in spite of ideological differences between countries. This stability led to predictability and confidence that global product investments would pay off. The general reliability of the system, e.g., producing goods in China for US consumption, allowed companies to plan around a global sourcing strategy with confidence that raw materials, manufacturing, and global shipping would deliver on time. This led to the “just in time” production and shipping mindset, and low inventory levels that are more capital efficient. 

Supply chains worked well enough to be boring. 

Then, things stopped working. With COVID, swings in consumer spending driven by stimulus and shutdowns, imbalances in the supply and demand of freight transportation, port and policy-led delays, spiking shipping costs, the Ukraine war disrupting food and fuel, and more, made the global supply chain slower and less reliable with more volatile costs. Sourcing from overseas went from feeling like a smart no-brainer, to a risky proposition. 

The effect of this is that companies are examining the stability of their own supply chains and considering changes to reduce risk. We see more companies looking to move their production plants to Mexico (near-shoring) while also implementing automation in the U.S. and launching new exploration for natural resources, or investing to find locally available substitutes. Leaders are switching from “just in time” to “just in case” to solve for predictability in the long term.

In the coming years we expect to see a new wave of investments (and startups) building alternative stable-chains that optimize for stability and predictability over cost alone. While at the same time the incumbent supply chains will recover and return to relative normalcy. Now that companies have seen how painful things can get when they go wrong, the door will be open for considering change.

Lastly, in any supply chain setup, using data and technology to run things more efficiently will be instrumental for improvement. This is table stakes for building a more compelling and productive system, and it will be critical no matter how the freight is flowing.

Watch the full panel.

The post Is 2022 the end of globalization? appeared first on Convoy.

Clinging to traditional patterns and practices of contract freight has become an increasingly large liability in the world of volatile supply chains. So what can we do about it? Our customers are leaning into new approaches starting with their most problematic freight. You can too.

The fundamental flaw of traditional freight contracts

The RFP is a cornerstone of the freight procurement process. For high-volume shippers, it provides a foundation for annual budgeting. Its resulting contracts are meant to provide transportation teams with reliable, quality capacity, budget predictability, and operational savings.

At the same time, the RFP process takes months to complete and costs millions in operational expenses each year. Even after contracts are signed, they quickly break down. In tight markets, tender rejection forces transportation teams into their routing guides, where they spend thousands of hours manually sourcing capacity at higher rates. In soft markets, shippers renege on volume commitments, spending operational hours to find cheaper rates on the spot market, at the risk of working with unfamiliar, lower-quality carriers.

Regardless of market conditions, the RFP creates a zero-sum game that pits shippers against brokers and carriers, establishing a relationship founded on mistrust. Within six months, much of the effort that went into the RFP is moot, with half of all negotiated contract rates or tender acceptance levels no longer being honored. 

The pandemic has further highlighted the fundamental flaw of traditional freight contracts — they attempt to assert control and predictability over an unpredictable freight RFP market. And because of this, they invariably fail to deliver on their promises.

The broken promise of reliable, quality capacity

Without RFPs and contracts, every shipment would be subject to the spot market. There’d be no guarantee of coverage, and transportation teams would work with many carriers who aren’t experienced in hauling their freight.

RFPs hold the promise of providing reliable capacity, binding carriers to a shipper throughout the contract term and improving service quality through greater carrier consistency. Yet in tight markets, this promise is quickly broken. When contract rates expose carriers to sufficient financial risk, they reject tenders and gravitate toward the more profitable spot market. As a result, shippers fall back into their routing guide or spot, where they’re more likely to work with unfamiliar carriers, receive lower-quality service, and face higher risk of service failure.

An analysis of data from FTR, DAT, and FreightWaves shows a strong correlation between tender rejections and the difference between contract and spot rates. As spot rates climb further and further away from contract rates, tender rejections increase in tandem.

A look at 2019 data from one Convoy shipper shows that even in soft markets, spot surges can immediately follow RFP agreements and drive up costs as carriers fail to meet volume or rate commitments.

A new approach to sourcing primary freight

In 2019, Convoy began to pilot a program called Guaranteed Primary. It set out to deliver on the key promises of the RFP without the overhead of running a months-long procurement event. The program officially launched in September 2020 and allowed our customers to participate in a dynamically priced contract agreement that guaranteed tender acceptance.

How Guaranteed Primary works

1. No RFP overhead

When a shipper uses Guaranteed Primary for any particular lane, they completely eliminate the need for an RFP. Instead, the shipper agrees to allocate all volume on the lane to Convoy.

2. A low fixed margin rate

In contrast to traditional contracts that set a fixed rate per mile, Guaranteed Primary establishes a fixed margin over the course of the contract — this margin can be up to 50% lower than the industry average of 15% to 18%. On each load, shippers pay a dynamic rate generated by Convoy’s predictive pricing algorithm. The rate is visible prior to tendering, which delivers pricing transparency upfront and removes the need for budget reconciliation.

3. 100% tender acceptance

As the shipper tenders loads to Convoy, we guarantee acceptance by tapping our nationwide network of more than 400,000 trucks. And through the use of an automated bidding system, carriers compete to haul loads, ensuring that our customers always get capacity at competitive rates.

4. Unparalleled transparency

Throughout the process, Convoy provides pricing transparency, sharing our truck costs for every shipment. Each month, customers receive an insights report detailing the estimated savings they’ve received comparing their actual costs to what they would have spent using an RFP or the spot market.

5. Shippers can cancel at any time

If a customer is unsatisfied with the program for any reason, they can cancel at any time.

Isn’t this just a cost-plus program?

At first glance, Guaranteed Primary looks a lot like a traditional cost-plus program. Although both programs make use of a fixed margin, there is an important difference. Cost-plus programs are backward looking, whereas Guaranteed Primary is a predictive (future-looking) program. 

With cost-plus, transportation teams don’t have access to accurate carrier costs at the time of tendering. Instead, shippers just receive an invoice after delivery. This leads to operational headaches and unexpected costs because shippers are expected to reconcile the actual carrier costs for every shipment.

By contrast, Guaranteed Primary is based on Convoy’s predictive pricing models. When transportation teams tender their freight (e.g., daily, weekly), Convoy generates a rate that predicts our costs to source the truck. Our pricing is based on machine learning models that get smarter with every shipment. And we take on the liability of our predictive rates being accurate. When our rate predictions are off, we shoulder the financial burden, eliminating the need for any billing reconciliation.

Start with your most volatile freight

Customers have tested Guaranteed Primary across a wide range of scenarios, including with their most problematic freight. I’m proud to share that at the time this article was written, every customer we’ve onboarded to the program is still using it today.

When the industry tender rejection rate was hovering around 25% in Q3 2021, Convoy accepted 99.997% of Guaranteed Primary loads.

This is strong evidence that our network is resilient and reliable even during periods of extreme volatility. 

While we’re still in the early days of this monumental shift away from the win/lose dynamic of traditional RFPs, the easiest place to start evolving your contract strategy is with your most volatile freight. Instead of lumping your “problem” freight into your RFP, consider carving it out as part of an intentional move into a program like Guaranteed Primary. Here are some of the top qualifiers you can look for within your freight portfolio based on what’s been working for our customers.

1. Stockout avoidance (or anywhere you really need to guarantee service)

One of our large retail customers was struggling to keep products in stock with a typical tender acceptance of just 15% on surge freight. When they began using Guaranteed Primary, tender acceptance shot up to 100%, allowing them to realize millions of dollars in revenue by keeping shelves stocked.

2. Just-in-time manufacturing or inventory management

Some of our customers don’t have the luxury of advanced planning. Despite having an average lead time of only 24 business hours, we eliminated the need for spot and serviced more than 350 problematic lanes for a multinational auto manufacturer. They were previously experiencing rejection rates of up to 30%. But with our elastic carrier network, we have covered 100% of loads while meeting the strict OTP and OTD requirements inherent with the coordinated relays of just-in-time manufacturing.

3. Low-volume lanes or low-lead-time freight

Low-volume and low-lead-time freight typically experiences high tender rejection rates and relies more heavily on the spot market. Our customers are putting this freight into Guaranteed Primary to reduce costs while improving service. One customer’s analysis demonstrated a 16% savings on truck costs for the lanes they moved to Guaranteed Primary, and an estimated $90,000 savings on administrative costs by avoiding the spot market.

Overall, we’re seeing positive shifts in the market, indicating a collective effort to modernize contract freight. Mini-bids are more common. Technology is making traditional RFP processes less cumbersome and manual. And other freight companies are evolving their existing cost-plus programs to more closely mirror Guaranteed Primary.

Now’s the ideal time to start running your volatile freight through a dynamic pricing program. Guaranteed Primary customers will benefit from even more cost savings by riding rates down in soft market conditions. Beyond these financial benefits, our customers tell us that the improvement to service quality alone is enough reason to make the switch. Regardless of market conditions, dynamic pricing programs like Guaranteed Primary are well positioned to take substantial volume from spot and traditional contract markets in the future by creating more balanced freight portfolios that benefit both shippers and carriers.

This story originally appeared in Convoy’s “The Future of Freight,” featuring 40 thoughtfully curated pages on supply chain disruption, freight procurement, market volatility, and more.

The post Stop Wasting Your Time Putting Volatile Freight in RFPs appeared first on Convoy.

Today, U.S. Fortune 500 shippers move the majority of their freight through preloaded drop trailers. Many of them would move even more of their freight as drop-and-hook loads if they could. Some would forgo live loads altogether.

Transportation teams prefer drop for its flexibility. Facility workers prefer it because they have a much wider time window for loading and unloading trailers. Carriers prefer it because it helps improve their productivity. In running our own nationwide drop-and-hook program since 2019, we’ve seen average carrier load and unload wait times drop from three hours to under 30 minutes, which in turn lowers detention fees for shippers. And the Environmental Protection Agency says drop helps reduce carbon emissions by eliminating hours of tractor idle time.

If drop benefits shippers, facility workers, carriers, and our planet, why aren’t we moving more freight this way? Unfortunately, the operational constraints of traditional drop programs have made this unfeasible. In recent years though, machine learning and automation have enabled an entirely new breed of drop program that operates with a level of flexibility and efficiency never before possible. This opens the question of whether all freight could one day be drop-and-hook. To answer that question, let’s start with what’s traditionally held us back. 

Constraints of traditional drop-and-hook

Drop-and-hook freight is substantially more complex than live loads. With drop, you need to match each shipment to an available trailer and a separate tractor. To do that, you need to know where all your trailers and tractors are, and you need to be able to route them to the next pickup as efficiently as possible.

Carriers have traditionally addressed this problem manually — with people on the ground and on the phone chasing assets. The process is time intensive, error prone, and operationally expensive, limiting drop service to large asset-based carriers, running on dense lanes with predictable shipment volume. This is also why drop has been used almost exclusively for contract freight.

But even with the relative predictability of contract freight, shippers incur unexpected costs with traditional drop programs. When tender volume exceeds forecast, transportation teams are forced to supplement with live loads, increasing operational costs and reducing the efficiency of their supply chain. Live loads not only introduce logistical hassles with appointment scheduling and additional labor requirements, but they also increase service quality risk through unfamiliar carriers sourced on the spot market.

Conversely, when tender volume dips below contract expectations, trucks stop moving. Carriers address lower fleet utilization with punitive fees, either charged directly to shippers or indirectly by passing along their higher fixed costs. 

When spot market spillover and punitive fees are accounted for, the inefficiency and inflexibility of traditional drop programs cost shippers 9% of annual freight spend on average:

$9.5 million for a shipper that moves 250,000 drop loads a year

$37.4 million for a shipper that moves 1 million drop loads per year

This ongoing cycle of spot market spillover and punitive fees has always been part of traditional drop, creating undue burden and risk for transportation teams and constraining the potential of this otherwise highly efficient form of shipping.

A new breed of drop-and-hook enabled by technology

Building toward a future in which all freight is drop-and-hook requires that we first overcome the limitations described above. In 2019, we took the initial steps by launching a new type of drop program called Convoy Go.

The program flipped traditional drop-and-hook on its head in several ways. First, it opened up high-quality drop shipments to every carrier in our digital freight network. With more than 400,000 trucks, we solved one part of the drop equation — always being able to match a shipment to an available tractor. And through our unique quality and compliance program, we could deliver service quality on par with the industry’s top asset-based carriers.

But what about trailers? Over the last three years, we’ve developed a new kind of drop trailer network, enabled by machine learning and automation technology. It eliminates the inefficiencies of traditional drop-and-hook programs by providing nationwide capacity for primary, backup, and spot loads, and it enables facilities to operate at peak efficiency regardless of fluctuations in demand. Here’s how it works.

Smart trailers

Every trailer in our network is equipped with internet-connected sensors that provide insights into the asset’s location, condition, and status. This eliminates the need for a large team of people to manage trailers on the ground. 

The trailers report their location using GPS and geofencing, so we can track 100% of our drop loads en route. We not only see where the trailer is but also how fast it’s moving and, with the help of machine learning models, when it’s expected to arrive. Additional sensors and proprietary software tell us whether the trailer’s loaded, what it was carrying previously, and what it’s slated to carry next. We can even determine whether a trailer has been stolen, an increasingly important capability as cargo theft has accelerated in recent years. With the increased visibility offered by smart trailers, you never have to wonder about the location and status of your shipments. 

These sensors also give us a detailed view into your facility yards. We can see how many trailers are parked in the primary and overflow lots, each trailer’s parking spot, whether the trailers are empty, and which are ready to be unloaded or dispatched. While asset carriers rely on dedicated equipment teams to manually check trailer status, Convoy Go provides this information automatically and without manual inaccuracies or the overhead costs of a dedicated team.

Trailer rebalancing

Supply and demand between facilities and cities is rarely equal. You might have a lot of freight going from Los Angeles to Phoenix, but few loads headed in the reverse direction. This leads to trailers piling up in cities with high demand. Traditional drop programs address this by deploying a surplus of trailers and constraining each trailer to a closed loop between two facilities. This is an inefficient use of trailer capacity and results in higher operating costs.

We’ve taken a different approach using machine learning technology. Each day, our machine learning models route trailers to where they’re needed in advance of the next pickup. As part of this, Convoy Go trailers are shared across our customers — a universal trailer pool that flexes with shippers’ fluctuating demand. Doing this at a nationwide scale involves analyzing billions of permutations to identify the most efficient route for every tractor and trailer. We account for loads that have already been booked, and we can reliably predict our customers’ future trailer demand weeks in advance.

The result is that we can find a trailer for our customers’ drop shipments 99.9% of the time. And in almost every instance, we deliver the trailer more than 24 hours in advance of preload.

Automated Reloads

Automated Reloads enable drivers in our digital freight network to automatically match their headhaul with a backhaul, earning more money on each run while achieving better truck utilization. For shippers, these reloads reduce carrier cancellations by roughly 10%, and they significantly reduce carbon emissions from empty miles. We’ve been offering this capability on live loads since 2019, and we recently introduced automated reloads for drop shipments as well. 

In the example here, the carrier drives approximately 55 miles empty — 45 miles between Portland, OR, and Salem, OR, to pick up the backhaul, and an additional 10 miles between Bellevue, WA, and Seattle after dropping the backhaul. This is compared to driving approximately 175 empty miles from Portland to Seattle had we not found a backhaul shipment.

By bundling multiple shipments together, Convoy helps carriers reduce their carbon emissions from empty miles by 45%. As of April 2022, Convoy has saved more than 8 million pounds of carbon emissions from entering the atmosphere.

So could all freight one day be drop-and-hook? 

I believe we’re on a path to enabling the vast majority of freight to move in drop trailers. We’ve laid the foundation with a more efficient, flexible, and sustainable drop program in Convoy Go.

The next step is to further unlock trailer capacity. This isn’t simply a function of accelerating new trailer production, although trailer manufacturing will need to recover to some degree, potentially aided by new, more accessible construction materials. The more immediate opportunity, though, is to unlock latent capacity in idle assets — estimates are that 20% of trailer fleets sit unused on any given day.

This will require industry collaboration across shippers, carriers, digital freight networks, trailer manufacturers, and drop yard providers to build a truly universal trailer pool across the 4.8 million trailers currently in service. We’re already pursuing this vision, and we’re looking for innovative, forward-leaning partners to join us.

This story originally appeared in Convoy’s “The Future of Freight,” featuring 40 thoughtfully curated pages on supply chain disruption, freight procurement, market volatility, and more.

The post Could All Freight One Day Be Drop-and-hook? appeared first on Convoy.

Autonomous trucking continues to be one of the hottest topics in freight. The most practical way for self-driving to work in trucking is for the driver to stay in the truck throughout the job, handing driving responsibilities to the autonomous truck on highways in order to rest and reset their hours-of-service, just like team-driver pairs do today. Here’s how.

In late 2019, the cost to ship a truckload of boxed macaroni and cheese from Los Angeles to Seattle was about $2,100. Today, that same delivery costs $4,500, up 115% in two years. This is because demand for physical goods has surged during the pandemic, but there aren’t enough available drivers or trucks and trailers to fulfill this demand. According to the American Trucking Association, the United States is short 80,000 drivers today. Adding to this challenge is that the production of new trucks and trailers is only meeting about 70% of orders due to materials and labor shortages, according to manufacturers. Whatever the numbers, trucking capacity is constrained today and will be again in the future.

The immediate way to create capacity is to orchestrate the system so that truck drivers are as productive as possible. Today, about one-third of the time trucks run empty, and drivers sit idle at facilities for hours because of congestion, suboptimal appointment times, or warehouse constraints on loading or unloading. Additionally, life as a truck driver can be stressful, from slow or delayed payments-for-work to the daily challenge of finding overnight parking. These issues hurt productivity, increase costs, and make trucking less attractive for drivers. These are the problems that Convoy is working on today.

Self-driving is the next major opportunity to address these issues. First, it will increase capacity. The U.S. Department of Transportation’s (DOT) hours-of-service (HOS) regulations keep the roads safer, but these laws limit truck drivers to 11 hours of driving per day. Autonomous trucks, without these HOS constraints, could make deliveries in half the time, doubling productivity, reducing costs and nights on the road, and adding capacity to the freight industry. 

Second, self-driving technology can improve driver retention. Driver-assist technology is already reducing stress on drivers, and with Level 4+ autonomy, drivers will be able to multitask in the cab and expand their roles into maintenance planning, customer service, etc., creating new career paths. Additionally, with more trucks able to run autonomously at night, overnight parking capacity will increase, making it easier for those who need parking to find it and removing a major source of anxiety for drivers.

Self-driving has been touted as the future for a decade now, so how is this different? Most of what happened before was related to ride-sharing and robo-taxis in and around cities, which are very difficult for autonomous systems to reliably navigate. Conversely, for trucking, most jobs have a major on-highway portion to them. There is enough upside in trucking that it is worth investing in solutions for the highway leg of the trip alone. In these trucking scenarios, humans will drive the first- and last-mile portions of the run, navigating urban areas and people at warehouses and other facilities, and the truck will drive itself on the highway. Therefore, the key is to build a system that supports hand-offs between autonomous trucks and human drivers. 

There are a few ways that this could happen, each with its own set of regulatory requirements and operational challenges. How this plays out will impact whether or not we realize the benefits of self-driving anytime soon or not. Let’s get onto it.

The transfer hub model

Conventional thinking is that in order for self-driving trucks to reduce the cost of trucking, there shouldn’t be a paid driver onboard for the autonomous portion of the trip. This leads to the plan for self-driving that we hear most often: the transfer hub model. In this model, a local driver drops a loaded trailer at a “hub,” typically located outside of a city by the highway. A self-driving truck transports that trailer autonomously along the highway portion of the run, dropping it off at a hub near the destination city. From there, another local driver picks it up and takes it to the final delivery location. 

The benefit of this model is that for very long highway runs, the cost savings of not paying anyone to be in the cab could offset the additional infrastructure cost of building and operating hubs and running local deliveries. Additionally, with high levels of consistent volume, the network could become very efficient and halo effects may emerge, such as local drivers becoming experts on local routes.

However, there are several practical reasons why this model isn’t the best place to begin.

1. It would increase the chances of delays and operational disruptions, especially before autonomous trucking is widely adopted.

• Every additional stop and every trailer handoff during a job increases the risk that the delivery will not be made on time. The transfer hub model has double the stops and hand-offs of a point-to-point job.
• The requirement to visit a hub on each end of the journey reduces route flexibility and the options for a driver to navigate in the most efficient way possible. 
• Even on highway portions, a driver may still be needed to navigate off-highway detours, inclement weather, construction zones, weigh stations, etc. Do the trucks just pull over and wait for an emergency operator to arrive? 

2. It will take a lot of upfront capital and coordination to set up an efficient, bottleneck-proof operation with route flexibility.

• To allow trucks to avoid traffic or delays at a facility, each region will need many shared transfer locations. 
• A single carrier running their own transfer hubs will need less capital and be less operationally efficient than 3PLs operating shared hubs. Shared hubs will require coordination between competing carriers.
• Without shared hubs, hundreds of thousands of small carriers and owner-operators won’t be able to engage.
• These hubs would be expensive to set up and operate. 
• Hubs would become a new potential chokepoint for the system.

3. It requires that logistics planning teams switch to a new model with new risks. 

• It is a new model with a cold-start problem. It is harder than using autonomy to enhance the existing point-to-point system.
• The industry is fragmented so it will be hard to coordinate a broad transition to this model. Proving it works sub-scale will also be a challenge.
• It will require a lot of paperwork and risk management. Today, a single carrier is responsible for moving each load end to end. In a transfer hub model, at least three different drivers would take possession of the freight, creating additional liability and requiring additional approvals.

There is a better way to launch autonomous trucking that fits the current framework, does not require scale, and allows America’s millions of small carriers, owner-operators, and truck drivers to participate at the same level as larger carriers. This way delivers nearly all of the benefits of the transfer hub model without the issues. It is also compatible with today’s system of point-to-point truckload deliveries and is based on the existing team-driver model.

We are calling it the autonomous tag-team model.

The autonomous tag-team model

The DOT’s HOS regulations limit truck drivers to 11 driving hours after 10 consecutive hours off duty. Today, when a load needs to be delivered more quickly, two-person driver teams work together, alternating who is driving and who is offduty, so they can refresh their hours en route and cover nearly twice as much ground per day as a single driver. This is more expensive, but it allows for much faster transit times (HOS rules summary).

We propose that this model, with one of the drivers in the team being the autonomous truck, is the safest, fastest, most driver-friendly way to quickly realize the benefits of self-driving trucks once the technology is approved. This is similar to an airplane’s autopilot system partnering with a human pilot. The truck would navigate the highway portions, during which the driver would be off duty, resting and resetting their HOS. For the first- and last-mile portions of the run, or whenever the truck is unable to operate autonomously on the highway, the driver would take over.

This is a practical, walk-before-you-run model. It can start without any changes to the existing point-to-point routes that drivers use today and will allow regional and long-haul runs to be completed in nearly half the time. This would quickly add a large amount of new trucking capacity to our economy while helping drivers make more money, stay productive, and maintain their livelihoods. 

Approval of this model should happen in parallel to when DOT and state regulators deem self-driving trucks safe enough to operate on public highways around other vehicles without a driver onboard. At that point, by definition, it will be safe for an off-duty driver to be inside the truck. This is exactly the same as today’s team-driving model, with the truck filling the role of the second driver. 

Cost comparison

The autonomous tag-team model has fewer operational hurdles, but is it more expensive? The short answer is no. It is less expensive for runs under about 1,500 miles and for very long distances, the costs are similar.

Consider this scenario: A 900-mile dry van run pays the trucking company $2,700. A single driver could complete the run in two days and would be paid about $500. Done with an autonomous truck, the run could instead be completed in just one day. How do the different approaches stack up to this?

Transfer hub: In the transfer hub approach, no driver is paid for the highway portion. However, paying the hub operator for local pickups and deliveries would likely add $200 each, or $400 total.

Autonomous tag team: For a one-day run, the tag-team driver could make about $300, a bit more than the per-day rate of a traditional, manual job. This model costs $100 less than the transfer hub approach for this job, not including additional miles driven.

If the job were longer, say 2,000 miles paying $5,000, the greater highway distance makes the no-driver transfer hub model lower cost, but only by about $170, or 3% of the total job. That said, this does not factor in other hard-to-predict costs such as roadside assistance for when the autonomous trucks need human support, extra miles driven to the transfer hub, or any additional delays that result from the trailer being transferred twice versus running straight through. These would potentially offset any cost advantage.

Net-net, the autonomous tag-team approach is the best approach. It offers the same speed-of-delivery advantages without the operational complexities and service risks of a transfer hub, for about the same cost. It also keeps drivers in the truck, supporting their livelihood and allowing drivers’ roles to expand as broader freight operators on the road.

And because of the existing team-driver model, as long as trucks are allowed to operate fully autonomously, human drivers should be able to team-drive with them as soon as the technology reaches Level 4, with minimal new regulatory work or operational changes to allow that to happen.

Closing

We hear questions from industry executives and regulators about how self-driving will take shape. In the long run, these two models will likely both exist and complement each other based on different delivery scenarios, e.g., trading off speed, distance, and cost, but the tag-team model is the right one to start with. 

This is a list of things that will need to be clarified for the tag-team model to work:

• Autonomous technology must be ready for general use by trucks on public highways (i.e., under what conditions will trucks be allowed to run without an engaged human behind the wheel, and who decides this at what level, etc.)?
• Is the human team member off duty when the self-driving technology is operating the vehicle, just as if another human were driving?
• Where can the driver be during this period, in the front seat, cab, etc., and what other limitations exist (e.g., like the split sleeper berth rule)?
• Can a driver refuel their truck (or plug it into a charger) during off-duty hours? 
• Under what circumstances can the autonomous truck request the off-duty driver’s assistance without interrupting their off-duty hours? 
• What, if any, transfer of risk and liability from carriers and drivers to the self-driving technology company will be needed when the truck is in autonomous mode?  

No matter which model is used, as self-driving trucks enter the market, we will see years of mixed fleets containing traditional and autonomous trucks of varying degrees, as well as mixed rules and regulations for fleet operators to follow. Whether a truck can drive autonomously will vary by its technology, location, current weather conditions, traffic situations, etc. Today, every truck has the same hours of service, but in the autonomous world, it will vary based on these and other factors, making it more difficult to match the right load to the right truck. Doing this effectively will require technology and machine-learning based systems to consider all of the new variables and optimize trucking. In short, things will get more complicated before they get simpler, and it will take digital, AI-driven freight platforms to make sense of all these new variables and optimize this more complex system. This will provide a big opportunity for technology platforms such as Convoy. 

This story originally appeared in Convoy’s “The Future of Freight,” featuring 40 thoughtfully curated pages on supply chain disruption, freight procurement, market volatility, and more.

The post The Fastest Path to Autonomous Trucking appeared first on Convoy.

Since Convoy started seven years ago, I have challenged our teams to use technology to improve trucking and shape the future of freight to benefit carriers, truck drivers, shippers, and the environment. I believe that technology, alongside capable operators, has the power to deliver this type of win-win-win. Over the last decade, connectivity has become ubiquitous, matched with cloud technology that effectively removes data capacity, processing power, and scale limitations. As we’ve applied these capabilities to instrumenting, coordinating, and automating freight across millions of truckers, we’re increasing productivity, facilitating industry collaboration among shippers, carriers, and brokers, and eliminating the empty miles so prevalent in historical freight methods. 

We are in the early days of technology improving trucking — our work is only just getting started. Here’s to seeing what problems we can work together to solve next.

1. True elastic capacity

The only supply chain constant is volatility. Whether it’s a backed-up facility, a swing in demand, moves outside normal patterns, or a full-on market swing, transportation teams are constantly fighting to maintain service levels.

We have invested in creating this elasticity — the real-time ability to dynamically activate trucks, trailers, and drivers to match needs — to provide a high level of service to customers and absorb the swings they experience in their business. For example, over the past several years, our Convoy Go program has become the most flexible trailer option on the market. To achieve this, we use technology to continually analyze the number of trailers customers need at a given facility to satisfy upcoming loads. Our systems automatically route and rebalance thousands of trailers and trucks across a geography to ensure customers always have what they need. This elasticity lets facilities operate at peak efficiency, despite unexpected levels of demand.

2. Guaranteed coverage

In a fragmented industry where capacity and service levels are inconsistent, shippers maintain relationships and solicit bids from dozens or even hundreds of carriers in order to have redundant options, even in a small region or on a particular lane. Despite this significant undertaking, coverage can still be unreliable, and reacting to routing guide failure is a regular challenge for every transportation team. 

Guaranteed coverage will become a reality for shippers, and they will receive game-changing benefits. Coverage failures will become rare, dramatically simplifying procurement and operations. Systems will become more tightly integrated, and processes at facilities like dock scheduling and loading will be optimized. All of this results in significant savings on the total cost of freight.  

At Convoy, we operate a network that reaches tens of thousands of owner-operators and small trucking companies every day — fully automated and larger than the traditional approach. Through this network, Convoy can match the needs of our customers in any market condition. Customers adopting Convoy’s Guaranteed Primary program are already receiving these benefits today, including keeping products on shelves, transparent pricing, and cost savings. 

3. Connecting all freight with all drivers

90% of America’s truck drivers are owner-operators or employed by small businesses with fewer than six trucks. These entrepreneurs are the backbone of the American supply chain, yet they face challenges not shared by larger counterparts: lack of access to quality loads from large shippers, uncertainty about consistent work, and unfair financial treatment. 

As the industry continues to adopt new technology, small carriers will have access to the same protections and opportunities as large trucking companies.

Convoy’s app empowers drivers to service loads from the largest shippers, proactively plan their routes to know when they’ll be home with their families, and create schedules that keep their truck full and earnings predictable. Even at seven years in, it’s still very early, with much more potential to better learn preferences to help drivers and small businesses make decisions on the most impactful options.

4. New frontiers to drive down total costs

Transportation is no longer just about getting trucks. Transportation teams increasingly rely on insights gathered from analyzing tender practices, facility operations, driver feedback, and more to increase efficiency and drive down costs. There’s still a lot to do to make this data easily accessible, and this is just the tip of the iceberg.

Traditionally, fragmentation in freight has made it one of the most challenging links to integrate in supply chain management. Digital freight networks like Convoy have systems orchestrating every step of the shipment lifecycle with real-time connectivity from tenders and spot boards all the way to the inside of trailers and the cab of each truck. There is incredible potential to optimize inventory, warehouses, orders, and more by providing signals into shipper systems delivered through real-time APIs, not humans. Today, some of Convoy’s customers run their daily list of orders through our systems, where we are using our signals to consolidate orders into fewer trucks and more efficient routes with lower total costs. This is one benefit of dozens we will discover in the years ahead.

5. Self-driving trucks team up with human drivers

The adoption of self-driving trucks will take many years to be fully realized. I believe one of the first places we’ll see this applied is expanding the 11 hours of service drivers get today. As autonomous driving technology matures, drivers will be able to hand off navigating the highway portions to the vehicle so that the human driver can go off duty, rest, and reset their hours of service.

As self-driving trucks enter the market, we will see years of mixed fleets containing traditional and autonomous trucks of varying degrees, as well as mixed rules and regulations for fleet operators to follow. Whether a truck can drive autonomously will vary by its load, technology, location, current weather conditions, traffic situations, etc. Doing this effectively will require technology and techniques like machine learning and AI to consider these variables and optimize. This will be a big opportunity for Convoy and an exciting area to partner in.

6. No empty miles

Waste benefits no one — it’s bad for carriers, shippers, and the environment. Today, 90% of S&P 500 companies invest in and report annual corporate sustainability goals, up from 20% a decade ago. In March, the SEC announced a climate disclosure proposal tying greenhouse gas emissions and indirect emissions to risk management. As sustainability continues to gain momentum in modern business practices, freight logistics represents a massive, largely untapped opportunity in sustainability. 

With 35% of all heavy-duty truck miles still being driven empty, technology-driven freight operations will become a meaningful and measurable contributor to companies’ sustainability goals. If the industry can achieve the same efficiency improvements that Convoy has seen on bundled shipments, it would reduce carbon emissions by 40 million metric tons annually. That’s the equivalent of taking more than 8.6 million passenger vehicles off the road for one year, or planting 661 million tree seedlings that grow for 10 years.

If you’re reading this, I hope you’ll push to make sustainable logistics procurement a first-order priority and put an emphasis on any freight companies eliminating empty miles. 

This story originally appeared in Convoy’s “The Future of Freight,” featuring 40 thoughtfully curated pages on supply chain disruption, freight procurement, market volatility, and more.

The post The Road Ahead: 6 Ways Technology Will Enable the Future of Freight appeared first on Convoy.

Driving down the highway surrounded by heavy duty trucks is an everyday occurrence for all of us. However, the staggering fact is that 35% of the time, those trucks are completely empty. That’s a really big deal for many reasons, but it’s especially significant for the environment. Think about this: each year heavy-duty trucks run 175 billion miles moving truckload freight in the US. Of these, 61 billion are empty miles – meaning trucks traveling without loads – contributing more than 87 million metric tons of carbon emissions annually.

It’s an even bigger problem when you take into account that scientists from around the world are telling us that we have a limited window to make unprecedented headway towards the biggest environmental and societal impact we can have: staying below 1.5 degrees Celsius of global temperature rise. According to the Intergovernmental Panel on Climate Change (IPCC), the world would have to curb its carbon emissions by at least half by 2030 and then achieve carbon neutrality by 2050 to meet this target. That’s ambitious for any industry, let alone freight and trucking. 

At Convoy, we share the belief that action needs to be taken immediately. According to the Bureau of Transportation Statistics, heavy-duty full truckload freight accounts for more than 252 million metric tons of CO2 emissions per year. The $800B trucking industry literally drives the health of our economy, yet new technology-based solutions to age-old problems have been slow to materialize. Convoy set out to compare two technologies for reducing carbon emissions in freight: the adoption of electric trucks and the use of automation to batch shipments together for drivers. We wanted to understand the short and long-term opportunities of both technologies, as a way to help supply chain and logistics leaders understand how to make the most sustainable choices when planning for the movement of their freight, both now and in the future.

Our Analysis: Electric Trucks vs. Automated Reloads

Research by Guidehouse Insights found that as of 2021, electric trucks represent only about 2% of U.S. new-vehicle sales, with 30% of market share expected between 2025 and 2030. Additionally, Guidehouse’s research predicts electric trucks to be the majority of heavy duty trucks on the road sometime between 2040 and 2045. 

Unfortunately, those adoption rates may not occur fast enough to meet the near-term environmental challenges the world is facing today. Convoy’s latest research, which took the assumptions from Guidehouse and forecasted those figures over the next 13 years, shows the inflection point of when electric trucks will save the equivalent carbon emission as automated shipment batching does today, is not until the year 2034. Additionally, these findings show that supply chain leaders need to be taking action today to reduce emissions as well as preparing for the eventual adoption of electric trucks to run zero emission freight.

At Convoy, our Automated Reloads program algorithmically groups multiple full-truckload shipments for carriers, which makes it easier to find more loads to keep trucks full and earning, while eliminating wasted time searching and minimizing empty miles driven in search of work. Convoy’s Automated Reloads program has already yielded a 45% decrease in CO2 emissions from trucks running empty less often. This accounts for more than 3.5 million pounds of carbon emissions saved since we introduced bundling of loads to our network in 2019. 

If the industry as a whole were to adopt these same practices and reduce empty miles at the same rate as Convoy, CO2 emissions would be reduced by 40 million metric tons – the equivalent of taking 8.6 million passenger vehicles off the road for a year. 

Next Steps for Building a Sustainable Future 

As we come to the end of 2021 and enter into 2022, the problem is going to be the same. Everybody is still going to be talking about the impact of climate change, the supply chain is going to continue to be a disruptor and supply chain leaders will continue to be tasked with achieving sustainability goals as part of their roles and responsibilities. But, what can change in 2022 is the progress that’s made. 

In 2022, supply chain leaders should take two steps to build a strong path for net zero emissions and get empty trucks off the road. First, initiate conversations with key stakeholders in your supply chain to address the topic of empty miles – it’s one of the simplest ways to make progress when it comes to sustainability efforts. Second, start having conversations about the adoption of electric trucks and work with your carriers and partners to figure out how to introduce electric trucks into the freight network over the next 20 years. Today, 20 years may sound like a lifetime away, but it is better to prepare now. 

At the heart of it, we’re all focused on solving the same problems of waste and inefficiency in the freight industry. At Convoy, we believe that by working together to reduce the 35% of the time trucks drive empty we can make the greatest immediate impact that can benefit the environment, and that’s exciting. Join us and other forward-looking shippers and carriers as we reduce carbon waste from empty miles – the time for action is now.

The post 35% of the time that truck next to you on the highway is empty – that’s a really big deal for the environment appeared first on Convoy.

The hiring woes of American employers have dominated business headlines in recent weeks but casual talk of labor shortages can sometimes feel like an ideologically-tinged Rorschach test: People see in it whatever they’re looking to find. Amid this cacophony, three data points are worth keeping in mind.

Average hours worked at trucking firms rose further in April after touching a previous all-time high in March.

The average weekly hours worked for non-supervisory employees at trucking firms touched 43.3 in April, coming off of an earlier all-time high of 43.0 hours in March — which was one hour per week longer than the 2015-2019 average of 41.9 hours. Hours worked have increased for most types of trucking firms, but the increases were particularly large for long-distance truckload and long-distance specialized (e.g., flatbed, tank) freight. (Hours worked are reported with a month lag, so today’s data included new statistics for April.)

March’s increase in average weekly hours aggregated over the full universe of long-distance truckload workers is roughly equivalent to a 24,000 employee increase in industry employment (nearly 5 percent) — which illustrates just how big a marginal effect movements in hours worked can have on trucking market supply. May data are likely to show an even larger increase in hours worked for specialized trucking firms given the temporary relaxation of Hours of Service regulations for fuel tank haulers during the mid-May Colonial Pipeline outage. 

Household survey data suggest that younger and Hispanic drivers have been most responsive to the trucking industry’s recent hiring push.

The number of actively employed truckers (excluding private fleets) is up by about 25,000 drivers — or about 2 percent — since the fall when the industry began to roll out hiring incentives such as higher wages and signing bonuses. This data is up to date through April 2021 from the U.S. Census Bureau’s Monthly Basic Current Population Survey, made available through the University of Minnesota/IPUMS-USA, and are smoothed and seasonally adjusted.

Younger adults under age 35 and Hispanics are the largest demographic components of that increase. By contrast, shadow slack — including drivers who are employed but not actively working or unemployed — is highest among drivers aged 35 to 54 (both relative to the 2016-2019 average and relative to 2020-Q4).

Online searchers for CDL training are up sharply, but the surge is not being driven by states ending emergency Unemployment Insurance benefits.

There has been an enormous amount of public debate over the degree to which pandemic-era policies — particularly the expansion of emergency Unemployment Insurance (UI) benefits — might be keeping workers on the sidelines of the labor market. In recent weeks, 24 states have announced that they will end these emergency benefits in response to rising private-sector alarm over widespread hiring challenges. (State count current as of June 1, 2021.)

Online search activity for keywords that signal early interest in becoming a commercial truck driver increased sharply in April and May (chart below). (As we’ve previously written, online search activity for Commercial Driver’s Licence [CDL] training is a very early indicator of driver supply. The data, which were accessed via Google Trends, begin in January 2004 and are seasonally adjusted and detrended to account for evolving job search behavior over the past two decades.)

However, it does not appear that the increase is being driven by internet traffic from states that have announced an end to emergency UI benefits. Some states that are ending UI benefits in June have indeed seen a surge in online interest in CDL training — for instance Texas, Georgia and Arizona; but so have several big states that have not announced policy changes (e.g., California, New York and Wisconsin). Similarly, a number of states that will be ending emergency UI — such as Tennessee, Indiana, Oklahoma and West Virginia have seen flat to declining online interest in CDL training. 

June will provide a true test of the tug-of-war between the industry’s efforts to onboard new drivers and policymakers’ support to the economy. As states unwind pandemic-era policies and the services sector heats up with broader reopening, many of the labor market ideas that the freight industry has been debating in recent months will either yield job gains or fail to materialize. The one thing that is guaranteed to be in plentiful supply this summer is a continued conversation about trucking labor shortages.

The post Three Data Points For Better Conversations About the Trucker Shortage appeared first on Convoy.

An understanding of the current market, the broader freight cycles, and the underlying forces that impact prices can help shippers better anticipate truckload rates and inform their freight procurement plans. 

This guide covers:

• Why freight markets tighten and soften
• Ways to get competitive freight rates in tight markets
• Strategies for freight procurement in soft markets
• How a digital freight network offers coverage for all market conditions

Why freight trucking markets tighten and soften

Prices on load boards and spot tender bids reflect the state of the freight market. In tight markets, when there are more shipments than trucks available, prices tend to be higher than average. In soft markets, when there are fewer shipments than trucks, prices tend to be lower. So what causes changes in carrier supply and shipper demand? 

Freight market supply: truck driver availability and costs

Truck driving remains one of the most popular careers in the United States, with more than 3 million truck drivers in North America. However, the American Trucking Association has documented an ongoing shortage in truck drivers. According to Convoy research, drivers in the past decade have exited the freight market in favor of employment in other industries.

Meanwhile there appears to be fewer young people pursuing careers in trucking. Even though trucking has attracted laid-off workers during past recessions, Convoy found that online interest in CDL training has declined. 

Low truck driver availability is among the factors contributing to the tight freight market the industry is currently experiencing. To combat some of the challenges around labor, carriers are increasing wages and offering bonuses to entice drivers to long-term employment, with driver wages rising throughout 2020. 

Freight trucking demand: the economy and consumer behavior

The broader economy plays a major role in freight rates. When employment is high and consumer purchasing power increases, shippers are likely to see an increase in demand and need to transport more goods. 

The broader economy plays a major role in freight rates. In Convoy’s 2020 Freight Insights Report, we tracked how larger macroeconomic trends and COVID-19 changed consumer buying behavior and impacted outbound truckload volumes across industries. As consumers stayed home and spent less of their income on services, they spent more retail and consumer packaged goods (especially online).  

Freight market seasonality: predictable market tightening and softening

Seasonality is a critical component in freight rates. There are four key “seasons” in the freight industry that affect rates:

1. Quiet season: January – March
   For shippers, the new year often brings lower freight rates. This is a slower season due to post-holiday recovery and inclement weather.
2. Produce season: April – July
   Produce season hits different regions across the US between the spring and summer. As produce season begins, demand for trucks increases. As competition for carrier capacity rises, so do truckload rates on the spot market. 
3. Peak season: August – October
   The late summer brings back to school season and a preparation for holiday buying. While Thanksgiving, Christmas, and New Year’s celebrations may be a few months away, shipping between manufacturers, distribution centers, warehouses, and retail locations occurs from August and October as businesses prepare for their busiest time of year.
4. Holiday season: November – December
   This is when consumers buy and send goods to their loved ones, causing spikes in demand for retail, food, beverage, paper, and packaging shippers. Shippers and carriers work tirelessly to close out any open shipments before the end of the year.

Added volatility and marketing tightening

Natural disasters and inclement weather factor in as another contributor to market volatility. 2019 saw one of the tightest freight markets in recent history, much of which can be attributed to an overactive hurricane season. Shippers face seasonal risk management across regions, with annual hurricanes in the Atlantic, California wildfires, and strong winds and tornadoes in the Plains and Midwest. Natural disasters and inclement weather can immobilize trucks, disrupting transportation logistics, leading to volatility and tightening.

Freight trucking rates in tight capacity markets

In tight markets, contract carriers are more likely to reject primary freight tenders to accept higher priced shipments on the spot market. Shippers can formulate a routing guide of backup carriers to avoid the spot market. 

When procuring freight on the spot market, it can pay to plan ahead. Similar to booking flights or a hotel room, the further in advance you’re able to book, the more likely you will be able to secure a great rate. Last minute price drops also happen occasionally, but more often than not, spot rates will increase in the final days. 

Convoy’s digital freight network is uniquely positioned to provide reliable and flexible capacity when demand surges past supply chain forecasts. It starts with detailed supply chain visibility, so companies are informed about recent and upcoming disruptions as early as possible. Next, Convoy provides access to a broad pool of carriers throughout the nation. Our customers can access this pool through services like our dynamic backup pricing from within their TMS or through tendering freight to Convoy on the spot market. 

Finally, we offer Guaranteed Primary, a new program to avoid tender rejection, bypass the volatile freight RFP process, and get primary freight coverage from high-quality carriers at a low, fixed margin. With 100% tender acceptance, Guaranteed Primary offers peace of mind, even in tight markets.

Truckload freight rates in soft markets

In soft markets, the supply of carriers exceeds truckload demand from shippers. Freight rates fall as carriers compete with each other to win shipments. This gives shippers more options to find competitively priced freight, especially for spot loads. 

A soft market can bring freight prices that are more affordable than a shipper’s contract rates. Occasionally, shippers will forgo their contract rates and opt for spot shipments to save on cost per load. However, this practice is less common for larger enterprise companies due to the operational burden involved in transitioning high volumes of contract tenders to spot. 

To reduce the manual operations involved in spot freight, Convoy provides instant quotes and booking with guaranteed coverage for every load we bid on. This lets shippers tender spot freight with greater convenience, speed, and visibility, without the hassle of phone calls and time spent waiting for confirmation. 

Freight partner solution for all market conditions

Market fluctuations are going to happen, forcing shippers to deal with shifting prices, rejected tenders, and other issues that lead to frustration and wasted time. Shippers are realizing there’s a better way to do business that reduces stress and uncertainty associated with changing freight markets.

Convoy is uniquely positioned to adapt to shifts in supply and demand to serve our customers. Our digital freight network uses machine learning, automation, and provides access to our massive network of carriers. This means your transportation team can have greater peace of mind whether the market is tight, soft, stable, or volatile.  

If you’re in need of a freight partner with a proven track record in contract, backup, and spot freight in every market condition, Convoy can help. Fill out our contact form and a member of our team will follow-up with you soon.

The post Trucking Freight Rates in Tight Markets vs. Soft Markets appeared first on Convoy.

Nothing throws a wrench in a drivers day like unexpected delays, confusing directions or slow loading and unloading. This is a big part of why carriers prefer to haul loads from facilities they have visited in the past. However, this can limit the number of loads you are able to take. It might also mean missing out on a high earning opportunity. To combat this issue Convoy offers carriers the ability to provide freight facility reviews for the pick up and drop off facilities they visit. Once you are signed up with Convoy you can view all these insights and more before placing a bid. 

How big is Convoy’s review network?

Carriers who work with Convoy have contributed over 1.5 million facility ratings and over 40,000 in depth reviews. This network of insights has created one of the most comprehensive databases of facility insights in the industry. Below are 5 ways that utilizing Convoy’s facility insights will benefit your business. 

5 Reasons To Read & Provide Facility Reviews

1. Eliminate risk on new routes: If your normal route moves to a new broker or construction is making a certain highway a nightmare, it might be time to try something new. Freight facility reviews can help you pick a new route without the need to retool your entire schedule to make room for unknowns. 
2. Provide feedback to shippers: Change can only happen if we speak up! Have you noticed certain challenges at a facility that could be easily remedied? Freight facility reviews give you a chance to share your feedback. Convoy communicates reviews back to our shippers to help them make improvements. 
3. Confidently expand your business: There can be risk when you choose to expand your business. This risk is especially prominent if you are expanding into a new geographical region. Convoy has reviews for facilities across our nationwide network of shippers and can your with insights on facilities that are thousands of miles away. These insights are yours without you ever having to leave your state.   
4. Show up prepared: There are certain pieces of information that can’t be found in load details, but could make your trip easier. Whether it’s your first time at a facility, or you haven’t been there for awhile, it is important to have the most up to date information. From construction alerts to knowing which side of the block to enter a facility on, skimming the latest insights from other carriers can help you leave home fully prepared for your day. 
5. Help your fellow carriers out: By providing reviews and insights, you are helping the other carriers who share the road with you. Everyone benefits from freight facility reviews and insights which are  available to all carriers in Convoy’s digital freight network. 

Learn more about Convoy

Download the Convoy app today to check out the insights we have on facilities in your area. You can start sharing your experiences with other drivers as soon as you book a load. 

Interested in learning more about the different ways Convoy can help you earn more with less hassle? Check out our TruckYeah Savings program designed to help you save big on business expenses. Don’t miss out on big savings with Convoy’s cash secured fuel card and factoring program!

The post 5 Reasons To Read & Provide Freight Facility Reviews appeared first on Convoy.

The 2020 Freight Insights Report marks the first time we’ve made data from our digital freight network publicly available with this level of detail and analysis.

With 1,000+ data points collected per shipment across millions of pickups and deliveries, Convoy’s digital freight network has amassed a lot of data. We’ve analyzed this data to take a look back at the year in freight for 2020. The report captures a unique picture of North American freight in 2020, quantifying the rippling effects of COVID-19 on the North American freight industry in hard numbers.

The 2020 Freight Insights Report includes:

• Month-over-month outbound shipment volume trends throughout 2020
• Average facility ratings broken out by industry
• Average dwell times for pickups and deliveries
• Performance for drop-and-hook shipments
• Incidental trends, including detention and TONU by industry
• Survey data on supply chain sustainability
• And more

Download the full report today.

The post Convoy Launches Inaugural Freight Insights Report appeared first on Convoy.

“Drop-and-hook” is the trucking industry’s term for when a driver drops a full container at a facility and hooks their tractor to a pre-loaded trailer at the same facility. This grab and go efficiency makes drop-and-hook a win-win: reducing transportation costs for shippers, increasing potential earnings for carriers, and saving time for everyone involved.

How does drop-and-hook compare to live loads?

In trucking, a “live load” is when a driver arrives at a facility, docks with the trailer, and waits for workers to load and/or unload the freight. As the driver waits, detention fees can accrue and increase overall costs for the load.

Compared to drop-and-hook, live loads can require more coordination from the shipper’s transportation team. Incoming and outgoing loads need to operate within scheduled appointment windows so that facility workers are available to move freight on and off trailers. If the schedule falls off track, there’s a heightened risk of facility backups which can increase driver wait times and detention payouts. 

While drop-and-hook loads still require coordination and scheduling, they bring more flexibility to shippers’ transportation teams. Facility workers have a much wider time window for loading and unloading trailers. Drop reduces average carrier unload wait times from three hours to under one hour, which in turn results in fewer detention fees paid by shippers.

Can owner-operators haul drop-and-hook loads? 

Up until recently, drop-and-hook freight was primarily limited to large asset-based carriers who have the resources to operate a large trailer fleet. However, drop trailer loads are now available carriers of all sizes with Convoy Go, Convoy’s modern drop-and-hook service.

Convoy Go opens access to drop-and-hook loads for owner-operators, carriers with small fleet sizes, and large carriers alike. This unlocks capacity for shippers and new earnings potential for carriers.

Can drop-and-hook services flex up capacity during demand surges?

Historically, one of the biggest drawbacks to drop-and-hook freight was its limited capacity. Traditional drop programs operate efficiently with a fixed fleet of trailers and tractors moving between a designated group of facilities. This limited scope helps drop operate smoothly in soft market conditions, but ill-equipped to adapt to surges in demand.

Convoy addresses this problem with our modern drop-and-hook service that scales to meet demand. We give shippers access to a massive supply of carriers through our digital freight network, providing reliable and flexible capacity that can meet shifting demand.

We also employ a unique shared trailer pool model. This enables us to reallocate drop trailers to a customer facility that needs them, helping shippers flex capacity to meet surging demand. 

For example, when one of Convoy’s customers has high demand but low trailer supply at a given facility, we are often able to reroute surplus trailers from nearby facilities that we service. We source power-only tractors in our network to pick up the unused trailers and drop them at the facility where they’re needed.

Our shared trailer pool helps shippers respond to demand without a hitch. Our drop-and-hook service provides customers with a 99.9% equipment availability rate and we deliver empty trailers 24 hours ahead of preload dates 99% of the time.

Are drop-and-hook programs only for large shippers? 

Due to the speed, flexibility, and cost savings associated with drop-and-hook, drop programs are especially popular with large shippers. In fact, the majority of US Fortune 500 shipments are sent through preloaded drop trailers. However, you don’t need to be a massive enterprise to reap the benefits of drop-and-hook. 

Small and medium-sized businesses can gain access to drop-and-hook with Convoy. We make our drop service available to companies who ship at least 250 truckloads per year on a given lane. You can contact us to learn more about how drop-and-hook can help your business.

Download our free white paper to learn how every shipper can benefit from modern drop-and-hook.

The post What is drop-and-hook freight? 5 common questions answered. appeared first on Convoy.

Supply chain analytics with a digital freight network

Convoy’s digital freight network collects more than 1,000 data points on every shipment. We have a stack of automated tools and a team of data scientists that analyze this supply chain data to provide network insights. We provide detailed visibility into our customers’ freight operations, helping them make informed decisions when it comes to transportation and logistics. 

In the case of our food and beverage shipper handling COVID-19 freight surges, we applied our data and insights to understand how customer behavior impacted their bottom line. The COVID-19 panic explained why the shipper’s customers placed so many short-notice orders, but when investigating more closely, we saw that this group of orders had an above-average percentage of cancellations–over 10% higher than average.

We evaluated the root cause of this surge in cancellations and the impact to the shipper’s bottom line. 

Uncovering cancellations and TONU charges

Our analysis revealed that, in times of volatility, grocers and supermarkets are likely to over-order to ensure they secure enough product to stock their shelves, then cancel excess shipments when they overestimate demand. While this may be a prudent strategy for their customers, cancelled shipments are a huge problem for shippers because they create the same operational burden but generate no revenue. Canceled orders can bring additional costs in the event that TONUs are required. 

Unfortunately, without data to back it up, shippers often struggle to recoup appropriate compensation for the costs associated with cancelled shipments. This is where Convoy’s network insights came in. 

Convoy found that over $35K in TONU charges were incurred as a result of these cancellations. We proactively prepared a report detailing the impact of the cancellations, which customers accounted for the most cancellations, and which of them led to TONU charges. Using these insights, we recommended that our shipper use this information to recoup TONU charges or to negotiate for terms that better reflect the true nature of their customer relationships in future contracts.

While our customer was already aware that they had canceled orders, we found that our data better equipped them to understand the scope of their TONU charges and improved their negotiating position to recoup costs. There are many hidden costs associated with transportation beyond the price per shipment on a given tender, and supply chain visibility can uncover new ways to save on freight.

Gaining a complete view of transportation costs with supply chain analytics

The best part is that we do this all free of charge. At Convoy, we envision a new kind of freight partnership, one that is focused on the long term with a deep appreciation for the fact that we succeed when our customers succeed. We work on behalf of the shippers we work with to analyze supply chain operations, quantify business impacts, and offer new perspectives on how to meet transportation goals. 

When you choose to work with Convoy for your freight needs, we will take every opportunity to help solve problems in your supply chain as proactively as you do. If this sounds like the type of freight partner you’re looking for, we’d like to start a conversation. Contact us and a member of our team will reach out to learn more about your specific needs.

Or if you’re interested in learning more about the types of insights that Convoy could provide, check out our latest white paper, Supply Chain Visibility and the Digital Freight Network.

The post Case study: Lowering TONU costs with supply chain analytics appeared first on Convoy.

Even in typical business cycles, consumer demand is notoriously difficult to predict. 2020 has shown us that forecasting supply chain needs is near impossible. We all saw forecasts that went haywire this year in business planning as well as broader economic projections. 

Despite the market volatility and uncertainty, customer expectations remain as high as ever. People expect quality service and on-time delivery, often on short notice. When forecasts are off, shippers’ ability to meet these expectations is jeopardized. In these situations, digital freight networks like Convoy can help.

Flexible capacity when demand forecasts are off

Convoy helps transportation teams meet the demands placed on their businesses by providing a source of flexible capacity. With instant access to hundreds of thousands of trucks connected to our platform, working with Convoy dramatically improves the chances there will be multiple trucks available to service your freight.

Carriers in our network respond to changing demand dynamics in real time, enabling us to offer flexible, on-demand capacity even when your volume surges unexpectedly. Whenever you tender to Convoy, we analyze our network to confirm that we have qualified carriers in the region that can make an on-time pickup at a competitive rate.

Case study: how Convoy covered demand surges beyond supply chain forecasts

Our digital freight network was put to the test in March 2020, one of the most volatile months in modern freight history. Supermarkets and grocers placed a high volume of orders with suppliers to keep their shelves stocked as consumer demand surged. 

This posed a substantial challenge for one of our top food and beverage shippers. Not only did their customers need much more product, they needed it fast. Their tender volume increased by over 50% overall. Even more critically, their short-notice shipment volume (<24 hour lead time) tripled.

A shipment’s lead time is the period between when a tender is offered and when the load must be picked up. Lead time is critical for transportation providers because it’s their window to execute operational processes (load building, appointment scheduling, etc.) and get the load booked with a truck. Most tenders have ample lead time, but short-notice shipments are a race against the clock. Risk to performance increases when there are many short-notice shipments all happening at the same time, as we saw in March 2020.

Traditional freight brokerages that employ manual operations (phone calls, emails, back-and-forth negotiations) lack the efficiency to accommodate a surge of rush shipments. However, Convoy’s highly automated freight network excels at handling challenges like this. 

Despite the magnitude and urgency of our shipper’s surge, we delivered on our promise of flexible, on-demand capacity. Our streamlined operational processes, automated freight matching and pricing, and our large and resilient carrier network, equipped us to help this customer and hit strong performance metrics. We accepted 20% more loads than our previous volume highs and maintained 98% tender acceptance, achieving 97% true OTD.

Supply chain forecasting with on-demand freight capacity

While 2020 showed us the limitations of predicting consumer demand, supply chain forecasting remains a critical component of business planning and operations. Working with a digital freight network like Convoy can provide peace of mind for logistics teams who need reliable and flexible carrier capacity at a moment’s notice. 

You can read part two of this case study to learn how Convoy used supply chain analytics to help recoup TONU costs for our customer, saving them tens of thousands of dollars.

The post Case study: When demand surges past supply chain forecasts appeared first on Convoy.

Macey: One of my favorite questions to ask carriers is how did you find Convoy?

Isaac: I actually found Convoy on another load board. We were looking for something local to do that day and we found this shipment with Convoy as the broker. So I gave Convoy a call, and right then and there, I got sent to the new carrier setup page and I was just amazed because it only took about three to five minutes.

Getting set up with other brokers requires so much back and forth and paperwork. It was just a hassle, but I was just super surprised by Convoy’s process. Three to five minutes, I was in and out of there, and I had the load tendered to me. It was amazing.

From that point on we started using the Convoy app to find loads because now we could see everything Convoy had to offer. And then we realized that there is a big Power Only market out of Green Bay with Convoy, and we wanted to explore more into that because typically we used our own trailers for shipments.

Macey: Tell me a little bit about running in that local market. You mentioned that you recently just got into your interstate authority? 

Isaac: Originally, I did want to dominate the local market, but that is a very hard thing to do as a new carrier. I was thankful that we found Convoy in the process of trying to accomplish that, but that is more of a long term goal now. 

Recently we decided to try the next step up by hauling regional freight typically a day out and a day back. And we found great success with Convoy’s Power Only because a lot of their Power Only freight is a 600-mile journey one way, and then 600 miles back to our starting location. The Power Only program has been life-changing for us. 

Macey: One of the things that really amazes me is the fact that you built a debt-free company at the age of twenty-two which, in the trucking and transportation industry, is not an easy thing to do. How did you get to that point where you weren’t accruing debt as you were building out your authority and hiring drivers to work under your authority?

Isaac: Cash flow is very important in business. If you work with Convoy, you can really take advantage of their free QuickPay and that perk really, really helps with our cash flow. When we started using Convoy, we set up our bank information and had the first shipment payment in our account just a couple of days later. 

Not to mention, submitting the documents on the app saves you so much time in the office. I don’t have to sit there printing and scanning because I’m able to have my drivers do it out on the road. Because I don’t have to physically run the company in the office, it opens up a great opportunity for me to be a dispatcher and a driver. 

Macey: How was the learning curve for your drivers uploading photos in the app? Do they feel like they save time invoicing now? 

Isaac: With everything new, there’s always going to be a learning curve. Looking at some of their first uploads you notice cropped photos or big blotch spots but eventually, they got the hang of it and we were able to submit a nice, clear document using the Convoy app.

Macey: I joke with carriers when they finally send that perfect image that they could be a professional photographer now. Talk to me a little bit more about the invoicing process. How do you guys feel about earning detention or getting reimbursed for lumper fees from Convoy?

Isaac: I had taken a Convoy load and needed a lumper code at three in the morning and was a little worried because this would be my first time requesting a lumper. When I went to pay the lumper for unloading my truck, I pulled up the Convoy app, tapped on “Support”, and tapped on “Lumper”. I selected the “Stop” and asked the facility worker for the lumper company’s name and the amount for the lumper. I hit “Next” and the EFS code just popped up right there. The gentleman just looked at me with amazement and he goes, “You have the EFS code already? It takes most drivers a couple hours, especially overnight, to call their dispatcher or broker for the approved code.” I said, “Yeah, I guess I do.” So, that’s pretty amazing first experience.

I’ve never had to fight Convoy on a layover, lumpers, invoicing, or detention because they have always been there to back us up. Being able to just request detention in the app and avoid the phone calls makes the driver’s life so much easier and enables me to sleep through the night. 

Macey: You’ve been an entrepreneur your entire life. What finally pushed you to start your own authority and business?   

Isaac: I’ve loved business my entire life – I love the accounting, the responsibility, and the decision making that comes with it. Since I was about eight years old, I’ve been running my own small businesses and actually had my own LLC lawn service in high school. For the longest time I didn’t realize that I wanted to drive a truck even though my aunt, uncle, and dad all drive. So one day I decided that I was going to pull the trigger and get my CDL. 

I worked for a couple of different companies over the years as a company driver to gain some knowledge about the industry. Eventually I bought a truck, and then in October of 2018 I leased it on with one of the carriers that I was working with. It was a slow transition for me because I preferred to take small steps instead of one big jump with no personal experience in the industry.

I will say drivers learn more in one week of actually driving then any 10 week CDL training course. I think that’s just so important. I didn’t go to a four year college, I didn’t major in accounting or operations. I went out there and I taught myself. I know a lot of people say that failing is a bad thing, but I really don’t think so. If you’re going to make mistakes and you have to learn from them somehow.

In April of 2019, I established my own in-state authority. Then October of 2019 we had gotten our out-of-state authority shortly after partnering with Convoy. Of course, then once we had that out-of-state authority and we saw those loads that were on the Convoy app and knew this was the right move to make.

Macey: Thank you, Isaac, your company continues to amaze our leadership team here at Convoy. We are very much so, looking forward to partnering with you in the future!

The post CONVOY HAUL STAR, ISAAC WILKE, SHARES HIS EXPERIENCE WITH CONVOY appeared first on Convoy.