The road ahead for North American freight brokerage
Third Bridge Forum interviewed a former C-level executive at Expeditors to discuss how recent market volatility and supply-chain disruptions have impacted this dynamic market. “At the end of the day, what major shippers need is predictability in rate… for an extended period of time”, the expert said. He added that it would be interesting to see whether incumbent brokerages build out their client experience and user interfaces to enhance the self-service aspect of their operations in a bid to compete with digital disruptors.
“There’s this battle going on between the incumbents that need to move more towards this digital space, and then you have the digitally native companies that are in that space already but need to build the underlying pipes and electricity, so the operating system piece of it,” he said.
The Interview considered whether incumbents would opt to build their own digital platforms or make an acquisition. Data aggregation, transparency and visibility are among the must-have features required to compete on this new battleground, according to the expert. Who will lead the industry — the incumbents or freight matchers — in terms of access to shipping data was also discussed in the context of CH Robinson and Convoy respectively.
In other observations, the specialist noted that many international forwarders are building virtual networks of approximately six US hubs to pick up more domestic lighter-than-truckload (LTL) cargo. “I think you’ll see CH begin to do the same thing as they build out these virtual networks to try to dominate the LTL market through their use of full truckload carriers, which is an interesting twist,” he said.
Margin trends, autonomous trucking technology and spot market-contract ratios were also on the agenda.
Click here to view a recent Third Bridge Forum article looking at the impact of COVID-19 on the US trucking industry.
To access all the human insights in Third Bridge Forum’s NA freight brokerage industry – Q3 2020 update Interview, click here to access the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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