Strategic Partnerships Expand Opportunities in Cloud-Based Transportation Communities

Cloud-based transportation communities are digital networks where companies connect to find opportunities for efficiency and cost savings. These networks are comprised of shippers, carriers, suppliers, brokers, freight forwarders and every other type of company involved in the shipping of freight. On these digital networks, members connect to leverage efficiencies such as finding additional truckload capacity and filling empty fleet miles.

A new eBook, Putting Community in TMS: Enabling the Network Effect in Transportation Management by industry analyst and President of Adelante, SCM, Adrian Gonzalez breaks down how the network effect can be enabled in transportation management. He discusses how network-based transportation management systems (TMS) act as a conduit for shippers to maintain thousands of relationships without needing to manually forge relationships one-by-one with other companies.

“Instead of establishing and maintaining hundreds or even thousands of one-to-one connections, companies make a single connection to the network to communicate and collaborate with their existing trading partners.”

In order to attract the most users and keep them engaged on a routine basis, network-based transportation management systems serve as the operating system for these communities. Shippers are already accessing the TMS for their daily logistics needs and can therefore easily pivot to community-specific features like truckload spot markets and load matching services.

To make these community-specific services enticing and valuable for shippers leveraging the TMS, there need to be a multitude of opportunities flowing into the network-based TMS from the other end. That’s to say, there needs to be extensive available capacity exposed to the community of shippers for opportunities to be found. That’s where partnerships come in.

Kuebix, as the first and only network-based transportation management system, is pioneering this concept. By partnering with external communities and thousands of individual brokers and carriers, Kuebix is able to expose available capacity from all over the supply chain industry to its TMS users.

Partnering with Emerge Private Freight Marketplace

A new partnership with Emerge has enabled Kuebix to rapidly expand the number of opportunities available to its customers in Kuebix Community Load Match, a truckload spot marketplace. Through this partnership, members of the community can tap into Emerge’s Private Freight Marketplace and seamlessly book with thousands of verified carriers without needing to maintain individual relationships.

Partnerships like that with Emerge quickly grow the shipping community and provide users with more opportunities for collaboration. The key is to connect every transportation player through a single system where it is easy to find opportunities for collaboration while simultaneously keeping users engaged with the community, even when they aren’t actively looking for additional capacity.Kuebix and Emerge

 

Kuebix TMS and the Network Effect in Transportation Management

Kuebix TMS was built around the concept of the network effect and is proving the theory in conjunction with transportation management as described by Gonzalez in Putting Community in TMS. As more users join Kuebix’s logistics community by becoming users of the TMS, more carriers, brokers, freight forwarders and other supply chain players can be partnered with to expose available capacity. This creates a snowball effect where when more shippers join to leverage the new opportunities, new partnerships with carriers and brokers can be established to take advantage of more shippers seeking capacity. It’s a win-win for all supply chain players and grows the cloud-based community exponentially.

Currently, there are over 16,000 members of Kuebix’s shipping community and that number continues to grow. The new collaboration with Emerge and other strategic partnerships will continue to drive shippers to the technology, encouraging more partners with available capacity to expose their assets through the technology, and so on and so forth, creating the industry’s largest cloud-based shipping community.

Network Effect Kuebix

Enabling the Network Effect in Transportation Management [eBook]

According to Adrian Gonzalez, President of Adelante, SCM, Supply Chain Operating Networks are the business equivalent of LinkedIn and Facebook. These cloud-based networks can enable companies to embrace collaboration and realize huge efficiencies. But Supply Chain Operating Networks are few and far between. One of the reasons for this absence is because the majority of technology traditionally used by supply chains have been housed within the “four walls” of individual companies. New SaaS, cloud-based technologies like Kuebix TMS are changing this.

As traditional, on-premises transportation management systems become replaced by SaaS, cloud-based ones, companies have the opportunity to digitally connect with one another via new Supply Chain Operating Networks. Kuebix is the first TMS to fully embrace this concept, with Kuebix’s technology acting as the backbone for a rapidly growing community.

The swift growth of Kuebix’s shipping community is proving the idea that the Network Effect can be used to great advantage in the supply chain industry. With over 16,000 companies in the Kuebix’s shipping network, thousands of suppliers, shippers, carriers, brokers, and other supply chain players are able to connect with one another for new collaboration opportunities.

These opportunities can lessen the impact of tightening capacity, help fill empty backhaul miles and ensure that shippers are always aware of the most cost-effective and customer-friendly options to ship.

Read an excerpt of Gonzalez’s eBook, Putting Community in TMS: Enabling the Network Effect in Transportation Management, to learn more about the Network Effect in transportation and supply chain operations.

Transportation management is inherently a network-based business process. It involves an ecosystem of different parties — a community, if you will, of shippers, carriers, consignees, brokers, and others that need to communicate and collaborate with each other in order to transport products and utilize assets and labor as efficiently as possible.

This transportation community is analogous to the connections and relationships enabled by social networks like Facebook and LinkedIn. A big difference, however, is that unlike Facebook and LinkedIn, which are powered by network native software, the transportation community has historically been powered by enterprise-centric software — that is, transportation management systems (TMS) that were designed for, and used primarily by, the transportation function within the four walls of a company.

This fragmented, “inside the four walls” approach makes it challenging to quickly and efficiently match transportation demand with available capacity, as companies of all sizes experienced in 2018. This growing need in the market for better matching of supply and demand, coupled with the rise of cloud computing, software-as-a-service (SaaS), application programming interfaces (APIs), and other emerging technologies, is driving the next evolution of transportation management systems.

Simply put, transportation management systems are transitioning from being “inside the four walls” applications to becoming operating systems that power transportation communities and enable network effects.

Click here to download the full eBook!

 

Uberization of Freight

The Uberization of Freight – Communities in the Logistics Space

The “sharing economy” is rapidly changing our behaviors as consumers. Uber, Airbnb and Lyft are just a few of the many platforms that are helping people sell, share, and rent their unused assets. The “Uberization” trend is disrupting traditional business models and touching nearly every corner of our lives, and even the logistics industry hasn’t escaped its touch.

With the Uberization of freight comes a variety of tools powered by cloud technology. Shippers are using smartphones and mobile apps to gain access to otherwise-empty trucks while also dealing more directly with drivers (versus just carriers and freight forwarders). These tools are letting individuals and companies communicate dynamically with each other to share assets and make deals. Since these tools are almost universally cloud-based, they aren’t limited to old-fashioned desktop PCs. Instead they go where their users go, from the warehouse floor to the office to the road.

Communities are springing up around these “sharing economies”, adding new levels of usefulness for their members.  For the transportation industry, the Uberization trend is helping shippers connect with thousands of independent drivers that have empty truck space. Despite popular belief, individuals who own and operate their own trucking businesses comprise a large chunk of the U.S. trucking industry. These 350,000 registered owner-operators either lease to carriers or operate under their own authority, which makes reaching and connecting with them extremely difficult. What better way to find independent drivers than through a community that connects directly with them and allows shippers to secure otherwise-unused capacity on their trailers?

This level of Uberization should be a lifeline for shippers that are feeling the impact of the capacity crunch and truck driver shortage. Exacerbated by regulations like the electronic logging device (ELD) mandate and a strong national economy, these challenges aren’t getting any easier for shippers. Much like its pioneering cousin did with personal transportation, the Uberization of freight trend is focused on matching capacity to specific shipper needs. In the not so distant future, it will become the norm for shippers to leverage communities based on the cloud to gain visibility and book freight with an ecosystem of carriers they would never otherwise have had access to. This will help to lessen the impact of the capacity crunch and driver shortage by reducing the number of empty miles driven.

Participating in a community that provides access to an ecosystem of carriers not only enables a high level of load matching, it also streamlines the entire transaction and enables solid shipper-carrier relationships (a must-have in a world where trucks are expensive and hard to come by). This strategy has been wildly successful for Uber, and is demonstrating enormous potential for the logistics industry.

Kuebix Global Logistics Community

Global Online Logistics Community: If You Build It They Will Come, Sometimes

Over the past decade, there has been a focus in the transportation industry on creating new avenues for finding capacity, getting better rates and improving customer service. To this end, a number of online communities have popped up with the promise of freight savings through matching carrier capacity to shipper demand.

However, over the years many of these communities have failed. Here are 5 reasons:

  1. A focus on spot rates only
  2. No support of negotiated carrier rates
  3. No direct connection to carriers
  4. No sticky factor to keep the shippers coming back
  5. High barrier of entry to get shippers on boarded

Many online logistics communities were originally established as a marketplace for volume spot transactions. A major reason these communities failed was because they focused on just a small piece of the way companies ship freight. On average, 90%+ of freight is booked via negotiated carrier rates, leaving just 10% or less for volume spot rates. Most communities built around volume spot rates alone failed because they didn’t offer access to the negotiated carrier rates that companies use to ship their freight the vast majority of the time.

Many communities also underestimated the importance of long-standing carrier relationships. However, direct connection to carriers was not possible until just a few years ago when carriers began exposing their APIs for rating, booking and tracking on their websites. Now technologies like Kuebix can build direct connections to carriers, allowing companies to view all their carrier rates, book shipments and track freight on one platform.

Communities also need a “sticky factor” to entice members to join and keep them “glued.”  An online logistics community must offer a tool that logistics professionals use every day, like a transportation management system.

Finally, a community must have a very low barrier to entry. Free versions of technology are very appealing for this reason. Think about what would have happened if, when Facebook was started, people were charged to connect to the network and use its features. Because Facebook is free, millions of people were able to join the community without any barriers.

The idea of building a community that offers dramatics savings by matching carrier capacity to shipping demand is appealing, but communities that are not built with shippers’ day to day needs in mind are destined to fail.

Learn more about Kuebix’s Free TMS and the Global Logistics Community. Try our new Freight Rate Calculator.