LaneAxis is in the business of connecting Shippers directly to Carriers by creating the first of its kind “brokerless” freight network.
It’s a fairly simple and powerful concept – so why hasn’t it been done before?
Shippers and Carriers have always had the freedom to sidestep third parties – such as freight brokers – and do business directly together. But there are plenty of potholes to navigate when taking this detour.
Historically, Carriers have avoided sidestepping brokers because they don’t want to damage fragile relationships that could cost them ongoing freight opportunities. Shippers have stuck with brokers because they don’t want to deal with the hassle of finding qualified Carriers, then having to manage the contractual relationships and real-time load management that is incredibly time and labor intensive. For Shippers that move hundreds, or thousands, of loads per week – it simply doesn’t make operational sense.
LaneAxis: No Detours Required
LaneAxis is now changing the paradigm and perception of how a direct model can work, but occasionally we’re still asked a blunt but fair question: what’s to stop Shippers and Carriers from joining the LaneAxis Network and striking “side deals” after making that initial direct connection? After all, we are building a database of 1 million+ Carriers and 1 million+ Shippers. Seems like a simple workaround, doesn’t it? Not really.
Simply put, it would not make operational, financial, or frankly, logical sense. The plethora of benefits offered by FreightLINK and FreightVISION is simply too great to ignore. First off, there’s the cost factor. Consider that on a $1,000 load, a broker would generally take about a 20% commission, which means $200 gone from the Carrier. In the LaneAxis model, the Carrier not only gets the full $1,000 (minus a small transaction fee), but the payment is also guaranteed, and will usually be issued within 24-hours of delivery. Currently, it can often take weeks, or months, for Carriers to get paid – and that payment is not guaranteed. Many turn to “freight factoring,” a process in which Carriers pay a third party 5% or more of their contracted rate to get paid immediately. So on a $1,000 load, that’s another $50 gone.
Carriers would also still need to utilize the LaneAxis network to avoid empty backhauls – known as “Deadhead” miles – which costs Carriers millions of dollars per year. And detention time disputes – which cost Carriers BILLIONS per year – will be virtually eliminated thanks to LaneAxis’ time-stamped, verifiable data. LaneAxis REQUIRES Shippers to pay detention fees to Carriers after two-hours spent waiting at a dock.
Further, LaneAxis is focused on the 97% of U.S. Carrier companies that own just a handful of trucks, and in many cases, only one truck. Most of these Carriers lack the technology to satisfy the needs of most Shippers. That’s why the current system is still bogged down by brokers, phone calls, emails, and even faxes. This is a big reason small Carriers have so much trouble obtaining Shipper-direct freight. With LaneAxis, all of that is history. Small “mom-and-pop” Carriers now have the ability to compete with mega-Carriers and avoid brokers by providing real-time tracking, instantly uploaded e-docs including proof-of-pickup and delivery, geofence alerts, and much more. Given that the only per-load cost for Carriers is a 1% payment transaction fee ($10 on a $1,000 load), why in the world would a Carrier want to lose all those benefits – just to save $10?
On the Shipper side, it’s frankly also a no-brainer to use the LaneAxis platform for every single load. It all comes down to risk/reward. Most Shippers have to maintain numerous contractual relationships with many trucking companies, so doing “one-off” deals with multiple Carriers is both risky and time-consuming. Shippers are free to join the FreightLINK network and make unlimited connections with Carriers. The only per-load fees are a $5 FreightVISION fee, and the 1% payment transaction fee. So again, on a $1,000 load, the Shipper’s grand total spend is $15. Why would they sacrifice the security, automation, convenience, and transparency LaneAxis provides – just to save $15?
Remember, LaneAxis requires Carriers to upload valid insurance certificates, Workers Comp verification, CDLs, and other necessary documentation, as well as requiring them to accept the Shipper’s contract. The LaneAxis system monitors renewal dates, instantly archives shipment documents (leading to simplified accounting), and automates numerous processes such as load-tracking that a Shipper would have to pay a dispatcher or other office employee to handle. That adds up to massive overhead. Shippers also gain the benefit of actionable data, such as a Carrier’s on-time performance, average wait times at docks, and more.
So again – why would a Shipper want to lose all those benefits just to save $15?
Remember, LaneAxis is not just about direct freight opportunities, it’s about risk mitigation, process automation, load-level transparency, and expansive network connectivity. FreightLINK and FreightVISION represent a fundamental shift in trucking logistics that benefits Shippers and Carriers equally.
So yes – in theory – Carriers and Shippers could simply “exchange numbers” and deal direct – but they would do so at their own peril. Any objective – or subjective – risk/reward assessment would almost certainly conclude such a strategy simply doesn’t make sense.
To learn more about the LaneAxis Direct Freight Network, visit www.laneaxis.com.