Artificial Intelligence, also known as AI, is a buzzword in most industries these days. Whether you’re wondering how AI can make your job easier or worrying it will eventually replace you, the impact AI is having and will continue to have on nearly every industry is hard to overstate.
The trucking industry is no different. While we seem to be a long way from self-driving vehicles taking over the roads, AI and digital solutions are gradually rolling out.
At Anderson Trucking Service (ATS), we value innovation and embracing technology. Our company is more than 65 years old, so we’ve seen a lot of changes in the industry over the years. We have a few ideas about what new technology is doing and can do for shipping.
If you’re curious about how technology is changing the transportation industry, this article will define AI in trucking, give an overview of digital brokers and list the pros and cons of each.
How Is AI Used in the Trucking Industry?
While each company uses technology differently, there are some basic trucking-specific tasks that are currently being completed by AI.
Some AI programs are used to predict traffic and weather patterns to help drivers find better routes. While the trucks themselves are still being handled by human drivers, AI can help them maximize fuel efficiency and their mandated hours of service, ultimately saving on transportation costs.
AI safety tools like automated braking and speed control can help drivers prevent accidents on the road. While this technology hasn’t advanced far enough to eliminate the need for human drivers, accident prevention technology augments the driver’s experience and judgment to keep the roads safe.
Customer service is another common use for AI. Online chat is augmented with chatbots and marketing campaigns are automated after initial setup by a human.
This isn’t unique to trucking — many industries have automated these processes to save time and money while providing high-touch service to the end user.
At ATS, we take pride in offering in-house services. While we do use some automations to simplify our customer service offerings and keep them cost effective, we are constantly evaluating to make sure the customer is getting the service they need and deserve.
What Is a Digital Freight Brokerage?
Digital freight brokerages are websites or apps that use AI to match shippers and carriers. Like a dating site, a digital brokerage introduces the shipper and carrier, who then decide if it’s a match.
The process of using a digital broker starts like using a traditional broker — the shipper specifies the origin, destination and size of the freight. The automated system calculates the cost for the carrier and shows the shipper the estimate.
From there, the shipper can compare estimates and choose their preferred option. The shipper does not interact with a human until they reach out to their chosen carrier.
These transactions work best for non-complex freight. Like with a dating site, it’s important to be honest and thorough with your information.
If your date shows up with significant differences from their profile, you might decide to end the date. If your freight shows up with more complexities or details than specified, the carrier may decline the load (leading to delays) or leverage additional charges.
What Are the Advantages of Digital Freight Brokers?
Digital brokers are a user-controlled interface with no middleman. Using a digital broker, the shipper immediately sees a price estimate.
Rates for digital brokers tend to be competitive or slightly lower than a traditional broker. For a routine commodity traveling via dry van, digital brokers can operate on a compressed gross margin — meaning a slightly lower price for the customer.
Related Content: What Are the Different Types of Freight Brokers?
What Are the Disadvantages of Digital Freight Brokers?
Digital brokers are able to provide these cost savings and instant quotes because they are powered by AI and human customer service is almost non-existent. If hiccups arise or changes come up while the freight is being moved, it may be impossible to make the change on the fly.
It is also impossible to build relationships between shippers and carriers via a digital broker. The broker matches the load based on lowest price, with less consideration toward the other qualities that factor into a successful shipment, such as a carrier’s experience or safety record. No matter what type of freight brokerage you choose, make sure they are trustworthy.
Are Digital Freight Brokers Cheaper than Traditional Freight Brokers?
The majority of shipping costs are from the driver (wages, benefits and rest), the vehicle and fuel. Using a digital broker has no impact on these costs.
Digital brokers operate on compressed margins. While the dollar amount saved may be insignificant, over hundreds or thousands of trips it adds up.
At ATS, we operate a traditional freight brokerage, ATS Logistics. This means we canaccommodate all loads, from simple to complex. Our team of experts is experienced with basic loads in a dry van or flatbed, as well as over dimensional freight and heavy haul.
As a future-driven company, we do have a load board app called ATS FreightMatch. ATS FreightMatch is an app that helps carriers find loads, and it’s available now for all trucking companies.
How Do Digital Freight Brokers Compare to Traditional Freight Brokers?
Traditional brokers are a relationship-based business in which the broker matches the shipper’s load with the best carrier. Brokers consider price when matching the shipper with a carrier, however they also consider the carrier’s reputation and abilities.
More than just matching carriers and shippers, many traditional brokers offer additional services. For one, they are well prepared to source carriers for unique or over-dimensional loads. They may also offer services like third-party logistics planning, heavy haul and intermodal shipping.
By using a wide network of carriers, traditional brokers may even be able to match the price offered by a digital broker for some simple shipments.
There’s no right answer when it comes to comparing digital and traditional brokers. Your relative needs of cost savings, customization and customer service will help you determine the best way to move your specific freight.
When it comes to finding a carrier, it’s useful to have a stable of both traditional and digital brokers to take advantage of the benefits of each type. While automated trucks aren’t taking over the road, AI is making a difference in the trucking industry.
Learning about the different types of freight brokers is one way you can prepare for the future. Testing tools like ATS FreightMatch is another.
ATS has created an ultimate guide to freight brokerage. This guide refers to all types of brokers and can also be useful when comparing digital and traditional brokers.