Digital Freight Marketplace - What is that?
Digital Freight Marketplace (DFM). That term has become part of our vocabulary over the past several years. Though it is often confused with Digital Freight Brokerage, it is not the same thing. Digital brokers are utilizing changes in technology to operate as a traditional brokerage might, but with (allegedly) more efficiency or back-office capabilities. DFMs are actually quite different, and many might wonder why they would utilize one. But first, we should better understand just what a DFM is.
Digital Freight Marketplaces are where shippers and carriers come together to do business. Sometimes called load boards or freight boards, they can be slightly confusing; think of it like a digital place where carriers “shop” for freight that has been placed in the marketplace by shippers. Here, loads are posted, often with prices and a contact name and number. The load board might be run by a 3PL, a broker (with only their freight), or even by a shipper as a private marketplace. This allows carriers to find and secure loads to solve needs within their network. Loads can be investigated, booked, tracked, and tendered all via a digital platform for both carriers and shippers. Not all marketplaces have the same functionality, though.
As a shipper, having a private freight board that carriers can log into, see your freight, and then provide rates and availability can seem like a great way to cover your spot or overflow freight. You are getting direct market pricing without the large markup 3PL and brokers charge for that kind of access to capacity. If you are only open to existing carriers in your network, as a shipper, you are not expanding your carrier base to provide strategic capacity. New carriers in the network help keep the incumbents honest on rates, come RFP time. Freight marketplaces also help you identify and vet carriers that may be new to your freight network. If you are open to the entire market, however, you still need to vet carriers, manage access and then manage the auction process. Multiple carriers will then contact the resource handling the freight to offer various rates, ask for changes or just answer questions. This limits the reach you might have as a shipper to secure capacity, as well as your ability to manage all those relationships and onboard and tender freight to a large carrier base. And while you are doing all this work, the load still has not moved off the dock.
These reasons are why many shippers simply give their spot freight to brokers to facilitate, though this its own drawbacks. Brokers handle the carrier capacity requirements while taking a large mark-up on the freight. The shipper ends up paying for this convenience, but they lose control over choosing the carrier, communicating with the carrier and the costs associated with the move. The shipper also no longer gets market feedback directly from the carrier – only what is passed along from their broker, who could manipulate that feedback for their own benefit.
For carriers, digital freight boards are a way to augment their network needs. If they utilize a marketplace they see in a truck stop, there is a very good chance that board is owned or primarily run by a single broker. So they would only see the broker’s freight in the area, and the carrier’s factoring company may or may not work with them. If the carrier utilizes shipper-specific load boards, they are required to manage multiple load boards at one time, with the corresponding rates and communication chains across multiple mediums. Because the driver is sitting while all of this happens, it is a very inefficient way to handle things.
Essentially, there are a couple of experiences with marketplaces. You have the Craigslist experience, where you post your load to a large, unmoderated marketplace or load board and carriers call to negotiate, learn more and ultimately either work with you or walk away, all while you juggle competing questions and issues from multiple carriers. You still must vet and onboard your carriers. You are still negotiating with each carrier that contacts you. In that regard, as a shipper, do you really know who is moving your freight? Do you really have time to do that with all your spot loads?
The alternative is to use a Digital Freight Marketplace that acts like Amazon. A place where multiple shippers are brought together with carriers, providing access to a broad array of loads to choose the ones that best fit their networks. This increases efficiency and performance for carriers, and it ultimately creates a better experience for shippers, too. With “Book it now,” carriers can book the load instantly at the shipper-selected price. Shippers put their freight on the marketplace at a rate they want to pay. Carriers log onto that marketplace and take the loads that best work for them. Just like Amazon or other e-commerce sites, it’s a true digital freight marketplace.
Because Loadshop™ was built by shippers for shippers, it is a Digital Freight Marketplace that delivers on that Amazon experience: multiple shippers in one place, all offering fair rates that they set themselves. There is no broker or middleman looking to take double-digit percentages out of the transaction. With Loadshop™, carriers can claim a load simply by clicking the “Book it now” button. No more email chains, phone calls and faxes to lock down rate and capacity for both carriers and shippers. Loadshop™ goes one step further and even lets the shipper select which carriers can see their freight. Not every carrier is a match for every shipper, and this flexibility reduces issues before they even happen. Shippers have high confidence in the solution provided because they are in control.
Loadshop™ drives efficiency into your shipping departments and carrier networks. Carriers do not have to log into multiple portals to find freight. Loadshop™ is a safe, secure, direct link to multiple shippers, all in one location. And carriers have one-stop shopping for their network needs with confidence they are getting the best price possible, direct from the shipper.
Loadshop™ is the Digital Freight Marketplace that gets it right – the one location for carriers and shippers to come together and do business, all with complete transparency. That’s the Loadshop™ way.