While freight exchange platforms have existed for over a decade in logistics, there is a surge in the number of cloud-driven marketplaces matching demand and supply in a digitally seamless manner. How do you see them evolving further?
Primarily acting as demand and supply boards, marketplaces have come a long way. Digitizing logistics processes of price discovery, tendering, e-bookings, and service settlements are some of the crucial changes.
The current systems focus essentially on matching demand with supply, but the future lies in enabling technologies such as AI, ML, Blockchain, predictive analysis, probabilistic algorithms engine to provide on the fly custom-tailored data insights to a user for informed decision-making, offering a comprehensive analysis of spot rates, thereby reduced costs, achieve better service levels, enhanced efficiency, better control over cargo movement, maximize and resource utilization.
For instance, in the US, empty miles are estimated to range between 14 -20% resulting in a loss of around $3.3 billion in 2016 for empty runs. An estimated 80 billion km are used by empty trucks. In India, with over 5.6 million trucks, of the average 80-90 trips that each vehicle undertakes in a year, capacity is under-utilized to the extent of 30-35% on the return leg with the same scenario playing across multiple geographies.
Marketplaces that are quick to adopt emerging technologies could have a first-mover advantage. The present process of matching demand with capacity is lop-sided, in the sense, the freight cost is driven by the shipper who has multiple options to select a vendor with the lowest price. Lower freight costs need not necessarily translate into lower cost of the final product. Efficiency levels, access to tracking cargo, vehicle movements, ease of documentation, competence in terms of cargo delivery timelines, risk mitigation measures related to cargo safety during movement. All contribute to a way to the pricing of the final product being moved.
Our solutions address this scourge by using technology to match demand with capacity (as against the traditional pricing), ensures capacity optimization for the service provider (including identifying profitable freight) and optimized costs for the shipper, building trust between all stakeholders.