Misperception #2: The DrayNow Freight Marketplace Can’t Work for Consistent Freight
The majority of intermodal dray moves are handled under long-term contracts with specific carriers. It’s been that way for decades and brokers are reluctant to change.
Enter DrayNow: the first and only intermodal freight marketplace.
DrayNow allows brokers to post a load to thousands of independent draymen simultaneously. Brokers love the capacity and transparency the marketplace offers, but in general view freight marketplaces such as DrayNow as a solution for fall-offs and other transactional freight.
That’s a mistake.
Let’s look at some of the false assumptions that keep IMCs from leveraging the power of DrayNow’s intermodal freight marketplace for consistent, contractual freight.
False Assumptions About DrayNow
False assumption #1: It’s a spot market for carriers seeking same-day and next-day freight.
Actually, no, freight brokers can use the incredible capacity of marketplace carriers to identify ideal partners for steady contracted lanes. Using in-house experts, data and sophisticated freight-matching technology, DrayNow can find the best carriers and solutions for higher-volume, contracted lanes. And it’s done within the marketplace model, with carriers who have expressed an interest in handling regular freight in their preferred lanes.
False assumption #2: Dynamic pricing is a bad thing.
Freight rates certainly fluctuate, and marketplaces will reflect the ebb and flow of supply and demand. That may create dynamic pricing compared to the rate you’ve negotiated. However, in the long run these fluctuations benefit brokers and shippers.
Freight marketplaces are a huge data repository on how, where and when freight ships and for how much. Every day more data is added – data you can leverage to make better decisions, such as when to ship to get the most economical rate.
Sure, you can choose to offer loads on a marketplace for the set rate you’ve already negotiated, but that ignores the essential efficiency of the marketplace model.
At its simplest, let’s say you have a pick-up every day in Dallas and your price is $1,500. Because DrayNow has visibility to dray moves across hundreds of brokers, they are able to identify another broker that has a delivery every day to that same receiver. By matching the pick-up with an existing street turn, you may be able to lock in this move at $1,000, saving $500 per move. That’s the efficiency of marketplaces at work.
False assumption #3: It’s smart to concentrate most freight demand with a small number of strategic drayage carriers
When capacity is tight, this is a risky strategy. By using freight shipping marketplace like DrayNow, you put your proverbial eggs in many different baskets, instead of just a few. Through one source, you access thousands of qualified drayage carriers who know the intermodal space and go in and out of rail yards regularly.
Large drayage carriers are becoming scarce. Especially in big intermodal markets like Chicago, you don’t want to be reliant on a limited capacity base. If one of your strategic carriers turns down a load or has a truck break down, the load very likely will push to the next day because the carrier doesn’t have the available power or drivers to cover it. A marketplace, on the other hand, can deal seamlessly with fall-offs by automatically re-posting the load and waiting for a carrier to accept it – typically within 15 minutes.
Think about it, the spot market is just an offshoot of a contracted arrangement that screwed up. So why not shift more of your steady freight to marketplace carriers and have a built-in back up of hundreds of dray carriers in your market?
Learn more about this in our blog: Intermodal Freight Misperception #1: When Carriers Say “Yes” the Load is Covered.
False assumption #4: It’s difficult and time-consuming to post loads on DrayNow
What’s true here is that marketplace carriers can’t see loads that aren’t posted. So, yes, offering steady loads on a freight shipping marketplace requires an extra step – the posting of the loads/s.
What’s not true is that the process is time-consuming and repetitive. Even for thousands of orders, marketplaces like DrayNow can work with you, individually, to automate posting and eliminate much of the data entry burden.
Shippers will drive IMCs to a marketplace model
The biggest frustration for shippers of intermodal freight is the antiquated process for monitoring load status and accessing documents. Each status request to a broker triggers a flurry of phone calls to eventually get an answer that will already be outdated by the time the response gets back to the shipper.
That simply won’t cut it in an age where most data is on demand. Shippers want and need more transparent data to keep their docks running smoothly. Brokers who fail to respond to this pressing need will become irrelevant.
DrayNow solves for this problem.
By putting technology in the hands of the drivers, marketplaces enable real-time status updates and document uploads. No more phone calls to carriers asking them to track down the driver’s position. Brokers can simply call up the portal and answer shipper questions in real time, and accurately. It’s a completely transparent process, and one that greatly increases IMC productivity.
In the very near future, it’s going to be very difficult for brokers to stay with draymen who don’t offer transparency to shipment status and results reporting. That goes for contracted lanes, as well as last-minute transactional drayage moves.