We need to talk about road freight digitalisation (and introduce Truckbeat)
Why is it that a consumer can see exactly where the package containing the running shoes that they just bought online is, but a warehouse manager has little more than a guess where goods worth €10,000 are? Why is it that supply chain managers have to sift through heaps of data – which is not always available, not always accurate, not clearly structured or even up to date – in order to understand operational bottlenecks, when automated reporting, early deviation warning capabilities and out of the box real-time data connectivity is very much within reach? Why is it that transport planners need to constantly juggle different rates and terms, daily work on multiple different systems - or no systems at all - and operate complex sourcing routines, when it is possible to have one system to get access to a virtual fleet of next to unlimited capacity, for both contract and spot – in one place!
Road freight is everywhere around us, everything we eat, wear, sit on, everything we consume in one way or another has at some point been transported between points A and B. Road freight is the biggest segment within the logistics industry, amounting to nearly 75% of all freight transport modes; no surprise there, since road freight is in most cases the only mode of freight transport that can reach your clients’ facilities. The road freight industry has been growing quickly over the past years and double-digit annual growth is expected to continue.
Still, road freight, as central as it is to the global economy, is in many ways stuck in the dark ages; it is unreliable, non-transparent and wasteful. Shippers are nowadays feeling the strong demand for modernisation coming from their clients. Tools associated with effective and transparent transport operations, such as real-time visibility, well planned – and kept – time windows, smart shipment consolidation capabilities and more, are no longer nice-to-have’s.
The road freight industry suffers from a series of age-old inefficiencies. These are most evident in the lack of efficient operational planning capabilities, lack of real-time data visibility and missing opportunities to group shipments together. B2B road freight consignees demand and deserve a customer experience on par with e-commerce consumers, but logistics service providers are not capable of providing this. Additionally, there is no established rating system as a measure of service quality and the industry is to a great extent driven by strong relationships rather than transparency and trustworthy performance metrics. Planning and procurement are in many cases conducted by phone and email, seriously lagging behind other industries on the journey to digitalisation. The reality is unpleasant to look at, and that’s without even mentioning empty running or the complicated and hard-to-forecast cost structures that are the norm in the industry.
Empty running The distance a vehicle travels empty - currently in Europe nearly 40% of total number of journeys in some cases.
How did the industry get here?
In most European markets the road freight industry is very fragmented. Most of the largest actors actually carry a very small share of goods themselves and the vast majority of kilometres are driven by small and small-medium sized transport companies operating as the last link in a long chain of subcontracting. To put it plainly, large shippers typically cooperate with a limited portfolio of larger logistics service providers, each one of which has their own second-tier network of sub-contractors and they in turn have their own network of service providers. In many cases there are three or four layers of subcontracting between a shipper and the transport company which actually drives their goods from A to B.
In short, the industry is traditionally built on layers and layers of service providers and with each additional layer comes an added degree of operational complexity. As the separation between shipper and transport service providers grows bigger, so does the number of friction points that lead to the inefficiencies described above. Given the great distance between service buyer and service provider, access to data that could be used as an enabler for a number of use cases, mainly on the shipper side, is not to be taken for granted. Connecting the dots opens up several opportunities to solve industry problems like long incident resolution times, poor customer experience for the shippers’ clients and the inability of transport managers to build a strong understanding around facility performance.
Data-driven operations without data - sounds familiar?
An organisation being data-driven means that decisions, both strategic and tactical, are made based on data rather than opinion or emotions. You might prefer other terms, such as “data-informed” or ”driven by actionable insights”, but the bottom-line remains the same - to optimise decision making by embracing data. One of the central pieces of the puzzle, for an organisation to really benefit from being data-driven, is to first successfully tackle data availability and quality issues. People using this data and its products have to have a high degree of confidence that it accurately reflects what is actually happening on the field.
So what are the challenges of being data-driven in the road freight industry? Taking a closer look into our space, it quickly becomes evident that there is a strong relationship between the large separation between service buyer and service provider on the one hand and data issues that hold up the transition to a data-driven world on the other. Moreover, the industry has traditionally struggled digitally integrating the smaller-scale carriers, a large vertical within the space where technology infrastructure and processes still have a long way to go.
As a result, with the existing mode of working there is a vast number of friction points in getting those data issues addressed. In many cases data is not trustworthy, because it moves very slowly, is not accurate or manually input after the fact. This low maturity in digital integration results in the industry currently operating in silos, without a working way to get visibility across these silos and, therefore, stuck in a non-data-driven reality for the majority of the cases.
What is Truckbeat and what we do – and why it is important!
In our past lives, we have faced some of the big challenges in the digitalisation of road freight. We have seen first-hand how marketplaces can introduce a tremendous upside to all involved parties when spun right; yes, doing good by all parties is very much at the core of success. We have a solid understanding of the value of data in improving operations and the value of actually being data-driven. We’re currently two founders (Thanos and Manfred) and a small team, recently backed by a top Nordic VC and we are growing – we are hiring (shameless plug!).
Truckbeat is a digital freight network, automating key aspects of efficient transport management. A road freight marketplace connecting shippers with a virtual fleet of large capacity, with technology, automation and data at its core. Our core technology analyses the demand and supply landscape, real-time data flows and interactions between the two sides in order to connect shippers and loads with the right carrier, in an efficient way.
With shippers coming on board, more options are made available to carriers, addressing empty running and automating operational planning, enabling them to focus on providing quality service and growing their business. With an increased number of carriers on the Truckbeat network, our flexible capacity increases and shippers benefit from high quality and cost efficient service. All with the added benefits of data access fueling the wheel of efficiency and providing the consignee with the visibility and customer experience they deserve, this is how we see the future of road freight.
We have spent the last year or so fully immersed in the space, we have had dozens of dialogs with actors in the road freight industry, from supply chain managers, to logistics developers and warehouse managers, to traditional freight forwarders and brokers, small and larger carriers and beyond. We have been building our product and conducting pilots with forward thinking players in the industry. We have listened carefully, tried things, got feedback and made learnings in the direction of bringing the industry forward in the digitalisation era.
Connect with us if you want to find out more and join our journey. The first coffee is on us - let’s talk!
● If you want to find out more about Truckbeat, you can take a look here.
● Software engineer wanting to contribute? We are hiring!