Tag: truckers

Another Curious Question: “Can On-Demand Freight Really Work for Trucking?”

Posted on by Andrew Rivera

Sure it can. With the right network in place.

In our most recent blog, we stood up to the somewhat perplexing question “Are Small Truckload Carriers Worth Saving” – a query posed in an editorial by a broker-based technology company.

Our answer was and will always be: Are you serious? Of course small truckload Carriers are worth saving. Of course! The primary goal of the LaneAxis Direct Network is not only to  “save” small Carriers, but to help them thrive.

In fairness, the editorial did present legitimate challenges facing small Carriers, some potentially existential. But there was hardly enough justification for asking such an over-the-top question as “Are Small Carriers Worth Saving.”

Questioning On-Demand Freight

This week, we’re pushing back against another eyebrow-raising question: “Can On-Demand Freight Really Work for Trucking?”

This provocative query comes courtesy of a different editorial posted in Transport Topics by a different broker-based technology company.

The author argues that “In theory, an on-demand freight marketplace sounds great.” The reality, he suggests, is that neither the Shipper or Driver communities have expressed much interest.

From the editorial:

“What we are seeing is that the automated solutions are basically mobile apps, and drivers don’t necessarily want to be using an app to book loads. Even with the on-demand market model, the shipper is not going to know who the carrier is because like the broker, the marketplace does not want the shipper to go around them and solicit the carrier directly.”

Both of these points are simply not true. At least certainly not true enough to apply such blanket assumptions.

Here are the facts:

  • Tens of millions of loads are posted on spot market, “on-demand” load boards every year.
  • The spot market represents a massive percentage of the truckload freight moved today: roughly 20%. That accounts for approximately $160 billion of the overall $800 billion dollars in revenue produced annually by the U.S. freight transportation sector.
  • Research firm Frost & Sullivan estimates trucking-focused apps could become a $35.4 Billion Market by 2025.
  • A Direct Network that caters to “On-Demand” Freight is EXACTLY what the industry needs.

A Brokerless, Direct Network with Top Tech Solves “On-Demand” Challenges

The LaneAxis Brokerless Direct Network – powered by the FreightVISION Driver App – is reinventing the way an On-Demand Freight Marketplace should work. The biggest key is removing Shippers’ reliance on freight brokers. A lack of true visibility into the available pool of 1.7 million U.S. Carriers has long been the major roadblock preventing Shippers from ditching brokers and engaging in a direct network. Those days are over.

LaneAxis now gives Shippers real-time visibility and access to this sea of Carriers when and where they need them. Drivers simply broadcast their current and future locations to provide that visibility.The irony is that many of these Carriers are ALREADY hauling these Shippers’ freight – but with brokers meddling in the middle and taking a hefty cut in the process.

Within weeks of launching the Direct Network, hundreds of Carriers had already signed up – ready and rarin’ to start making direct connections with Shippers and leave brokers in the dust. And you better believe all those Drivers and Carriers are more than happy to book loads through the LaneAxis Network and FreightVISION mobile app – primarily because they’re coming DIRECTLY from Shippers. That means direct negotiations, full transparency, and guaranteed, direct pay, with no broker margins, usually delivered 24 hours after proof of delivery.

On the Shipper side, the suggestion that Shippers don’t want to know who the Carriers are and don’t want to connect directly with them is also laughable. For decades, Shippers have lacked true visibility over their freight because of clumsy and costly middlemen like freight brokers. As we reported in a widely shared investigation, even Shippers working directly with large Carriers aren’t aware that many of their shipments are being outsourced to other companies at alarming rates, further murking freight visibility.

LaneAxis provides Shippers all the tools needed to overcome the challenges of managing multiple Carrier relationships at once, including automated contract management, monitoring insurance documents, Commercial Driver’s Licences (CDLs),  and providing real-time tracking and documentation throughout the shipment lifecycle. LaneAxis empowers small Carriers and Shippers of all sizes to do business together efficiently and profitably.

Shippers and Carriers are ready, willing – and thanks to the LaneAxis Direct Network – FULLY able to work directly together thanks to the long overdue marriage of patented technology with a Brokerless Direct Network.

To learn more, visit LaneAxis.com.

Truckers Shred Freight Brokers in Public Comments to Feds

Posted on by Andrew Rivera
Truckers Shred Freight Brokers in Public Comments to Feds
“If everything in the U.S. has transparency, then why [is] only trucking left behind?”

The ongoing Broker Battle fueled by furious Drivers and Carriers is reaching a fever pitch in the nation’s capital. The Federal Motor Carrier Safety Administration (FMCSA) is in the midst of receiving and reviewing comments related to separate petitions demanding broker transparency and reform.

Truckers are not holding back in their comments – and piercing criticisms – of the brokerage industry. CDL Life compiled some of the most damning comments plucked from the roughly 1,000 submitted so far:

Sandra Grover:

“Broker transparency is becoming a SEVERE issue with disruptions in the food supply caused by this pandemic. The price gouging is ongoing. Postings yesterday was for 84 cents [per mile]. this is resulting in so much carryover of spoilage to lines down waiting on ingredients. Really hot… someone can explore contractual lack of transparency that is totally destroying our financial backbone. There is no culpability and accountability.”

Sunny Grewal:

“If everything in US has transparency then why only trucking left behind. We get cheated everyday by brokers. Every service [has fees], you pay the fees or commission and [you] get your stuff done. Brokers charge rates to customer to move their load. But they don’t give us that money.”

Ernest Brown:

“The example I have actually happened to me. The shipper was paying $.85 per bushel on a load of salvage corn . I called a broker who had listed the same load, but was offering $.50 per bushel. The broker was going to take 40%… off the top. If I had not seen the shippers rate I would have not known how much the broker was taking . In my world if the broker is taking more than 10% of the gross it is too much in most circumstances.”

Carl Mueller:

“They charge through the roof for freight and want us to haul it off for cheap and “break even”. As an owner operator, how when you have to pay for trucks, insurance, permits, fuel, repairs, and even hotels & and all sorts of other crap/equipment. You can’t make it hauling with these rates they give us, and they take a big ass cut out of the rate too. They should be a fixed low rate at most or no brokers at all. They aren’t the ones risking their lives on the road everyday to provide for their families miles from home. they sit behind a computer screen and a phone. As a driver I think truckers deserve more compensation for what they and cut out the middle man. That’s all I got to say.”

Hear, hear Carl.

These comments speak for themselves – and so does the LaneAxis solution. The Direct Network we are building will cut brokers out of the freight equation, resulting in total transparency, better pay, and better processes for Shippers and Carriers alike. The time for change is NOW – and LaneAxis is leading the way. Visit LaneAxis.com to learn more.

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Brokers Shift Gears – Again – in Fight Against Transparency

Posted on by Andrew Rivera
Brokers Shift Gears – Again – in Fight Against Transparency
Latest argument employs “fear factor” of higher costs if truckers get their way

Freight brokers, by nature, are exceptional salespeople. It’s their job.

But when the sales pitch frequently changes, or is based on shaky assertions (or both), their credibility rightfully takes a big hit.

So it goes in the ongoing battle royale between brokers and owner-operators/small carriers. As LaneAxis reported during the height of the Covid crisis this past Spring, Carriers finally erupted in anger over their belief that brokers have been fleecing them for years. Low rates and a lack of pricing transparency sparked nationwide trucker protests stretching from SoCal to the White House.

Original Argument: Too Much Capacity

At the time, the broker coalition angrily refuted accusations of “price gouging” and a lack of transparency, claiming low demand was to blame for low rates.

“Brokers and 3PLs are not price-gouging – there is simply not enough freight to support all of the carriers,” said Robert Voltmann, CEO of the Transportation Intermediaries Association (TIA), a lobbying group representing brokers and third party logistics. “There are too many trucks chasing too little freight,” added Voltman, who made the comments in May, 2020.

Fast forward a few months, and the freight market is bouncing back strong, particularly in the spot market. Now that capacity has tightened up, especially with the upcoming holidays, brokers are taking a new tack in their fight against broker reform: stoking fear of higher costs for truckers and consumers if trucking advocates get their way.

New Argument: Too Much Cost

ArcBest, a self-described “multi billion dollar” 3PL, recently warned government regulators that if proposed broker reforms are enacted, every broker will incur at least $500,000 in additional costs every year – costs that will inevitably be passed down to Carriers and consumers.

“Essentially, any benefits received from carriers in modifying [regulations] will result in a substantial detriment to shippers, consignees and consumers and most likely to carriers as well,” wrote Barney Long in a mid-September letter to the Federal Motor Carrier Safety Administration (FMCSA).

Long claims revisions being sought to the brokerage industry will increase equipment, software programming and personnel costs to the tune of at least half a million dollars per year.

Long was responding directly to a petition filed by the Owner-Operator Independent Drivers Association (OOIDA), which seeks to improve broker transparency by:

  • Requiring brokers to automatically provide an electronic copy of each transaction record within 48 hours after the contractual service has been completed.
  • Explicitly prohibiting brokers from including any provision in their contracts that requires a carrier to waive their rights to access the transaction records as required by existing law.

A separate proposal seeks to require broker contracts exclude any stipulations or clauses that exempt brokers from having to comply with transparency requirements.

“If it wasn’t already clear before, it’s clear now: The freight brokerage industry is doing everything it can to maintain its iron grip over freight transportation,” says Rick Burnett, LaneAxis CEO and Founder. “No matter the season or circumstances, they need to maintain control and will always manufacture excuses for preventing broker reform and transparency. They have no incentive to drive cost savings into the transportation network. By nature, their model is margin driven with price masking baked in. LaneAxis has been fighting this uphill battle for years, knowing full well that independent truckers have had enough of the deception and excuse-making. We have been building a Shipper-direct network specifically for those truckers – so they no longer have to put up with this abusive and deceptive behavior.”

The LaneAxis Direct Freight Network is the first BROKERLESS network in trucking history. LaneAxis is empowering Shippers and Carriers to connect and do business directly with each other on the basis of total transparency and trust, backed by the patented technology LaneAxis provides.

To learn more, visit LaneAxis.com.

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LaneAxis vs. the “Competition” – an Assessment

Posted on by Andrew Rivera
LaneAxis vs. the “Competition” – an Assessment

The LaneAxis team is often asked how we compare to this product or that platform or how we match up against giants like Uber Freight.

The answer is generally the same: we don’t compare. That’s because we don’t have any true, direct competition out there.

Here’s why we’re comfortable making that bold statement: LaneAxis is building the first-ever completely brokerless Shipper-to-Carrier direct freight network. No such network exists today, which is precisely why the freight transportation industry is so badly broken. Independent truckers remain in a state of near-revolt against freight brokers who continue to tighten their stranglehold on trucking, all at the expense of efficiency and fairness.

LaneAxis is breaking new ground.

But What About all the Apps & Trucking Tech Out There?

After spending decades stranded miles behind the technology curve, the trucking industry is finally catching up. A glut of trucking-focused apps and software “solutions” have flooded the market – each aiming to solve disparate pain points.

Make no mistake, companies like Fourkites, Convoy, Macropoint, and yes – Uber Freight – provide valuable tools and services for the freight industry. But it’s more than reasonable to consider all those companies similar enough to each other to warrant being lumped together under the same categorical umbrella. Whether offering freight matching, load boards, “track and trace” visibility, or supply chain analytics, these ambitious companies are duking it out on the same playing field using similar tech and tactics.

Most notaby, they all work closely with – and actively seek – the business of freight brokers. There’s simply too much money to be made. Freight brokering is a roughly $85 billion industry in the U.S., and is expected to grow another $41 billion by 2024. Convoy and Uber Freight in particular are, in principle and practice, digital brokerages that take a healthy slice off every shipment. Considering that many of the loads posted on those platforms are actually submitted by traditional freight brokers, you’re now looking at double-brokered loads, which means even more money snatched away from Carriers and drivers.

Ultimately, broker-reliant tech may streamline some processes and add varying degrees of load visibility, but in the big picture freight brokers are more of a hazard than a help for the trucking industry. Carriers are the ones feeling the most pain from this largely inequitable process. Despite this, trucking tech is loath to untether itself from the behemoth brokerage industry.

Shifting the Focus

The LaneAxis focus is strictly on Shippers and Carriers – and leveraging technology and smart ideas to empower both sides to deal directly with each other and kick brokers to the curb.

LaneAxis is creating the first freight-direct network backed by patented Intellectual Property (IP), which many companies are likely in violation of. FreightLINK represents the network-connectivity component of the LaneAxis platform. Our database, containing one million+ Shipper contacts and one million+ Carrier contacts, creates limitless opportunities for compatible Carriers and Shippers to create their own personalized freight networks, sans brokers. Shippers can search for optimal Carriers – and vice versa – based on any number of queryable attributes such as preferred freight lanes, freight types, real-time driver location and availability, performance history, and more.

FreightVISION handles the contractual side of managing loads, an often frustrating and time-consuming process that historically has been a top reason Shippers sought out brokers in the first place. Now LaneAxis is on the scene to manage and automate most of those cumbersome tasks. Shippers and Carriers can now negotiate rates directly, transparently and equitably. FreightVISION then provides automated shipment management including real-time GPS tracking, geofence entry and exit notifications, and instantly uploaded and archived shipment documents including proof-of-pickup and delivery.

How Will You Compete with Self-Driving Trucks?

First, it’s important to remember that while autonomous trucks are creating lots of buzz, there will always be a need for independent drivers to haul freight – and by extension the need for a freight direct network. Even once autonomous trucks hit the road with regularity, which is likely a decade away, this will almost certainly account for just a fraction of overall freight transportation movements. This technology, after all, is not cheap. Having said that, LaneAxis is developing the ability to connect to any Electronic Logging Device (ELD), which is now government mandated equipment in all cabs. This will make the LaneAxis solution compatible with future technology like autonomous vehicles, drones, and more. With or without a driver, the core LaneAxis software will confirm the pickup, delivery and all KPI data sets, as well as continuing to track all movements in real-time. When the network moves to autonomous trucks, it will not affect our future growth as we are a software company, not a hardware company.

A Holistic and Unrivaled Solution

LaneAxis is quite literally reinventing the way freight transportation operates in the U.S. Creating a network environment for direct connectivity is the starting point. Optimizing and automating all aspects of the actual freight movement – while providing critical internal and industry-wide data – injects cost-savings into the operations of both Shippers and Carriers.

Partnering with the American Association of Owner Operators (AAOO) also gives us a unique advantage over others in the space. All Carriers who join the FreightLINK Network will automatically receive free membership into AAOO. That means free access to their exhaustive list of benefits, including discounted truck and health insurance, tire discounts, business assistance, and a fuel card that saves the average member $2,500 per year!

Niche tech solutions abound in trucking – and many do a fine job.

But simply stated: no one is tackling industry challenges in the holistic and groundbreaking way LaneAxis is.

To learn more, visit LaneAxis.com.

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4 Years After LaneAxis Study, Freight “Outsourcing” Still Weighing Down Industry

Posted on by Andrew Rivera
4 Years After LaneAxis Study, Freight “Outsourcing” Still Weighing Down Industry
Controversial Purchased Transportation practice hinders true visibility and direct connectivity

It’s long been trucking’s “dirty little secret” – although for industry insiders it’s hardly a secret at all.

Four years ago, a widely shared and discussed LaneAxis report revealed that the country’s biggest publicly-owned trucking companies outsource, on average, over 42% of their freight to small Carriers and owner-operators – a practice known as “purchased transportation.” When this happens, most shipping companies contracting with the “big boys” have no idea that small mom-and-pop Carriers are the ones actually hauling their freight. This is commonly referred to as a “double-brokered” load.

Fast forward to 2020, and most of the companies on that list are still at it.

Take JB Hunt for example – the third biggest trucking company in the U.S. In 2016, after evaluating publicly available filings, we reported that JB Hunt spent roughly 48% of its annual revenue on purchased transportation.

Four years later that number hasn’t changed a single digit. Per its most recent public filings outlining its 2020 Q1 and Q2 financials, JB Hunt is still spending exactly 48% of its $2 billion+ operating revenue on purchased transportation.

Meanwhile, Landstar Systems – the fourth biggest trucking company in the U.S. – just announced it spent 92% of its revenue in Q1 2020 on purchased transportation (or as the company calls it: “BCO” – Independent Business Capacity Owners).

These two trucking titans are hardly alone in committing so much capital to a process that can thwart true Shipper visibility while cutting profits for independent Carriers.

FedEx, for example, now commits a full 25% of its cash to purchased transportation.

“A quarter of FedEx’s total expenditures goes toward purchased transportation, which includes the costs of services purchased from contractors,” reports Forbes. “This figure has been going up for the company over the last few years, as it partnered with third party vendors to meet the volume growth. In fact, it is even higher than that for its peer, UPS.”

Forbes says UPS spends about 20% of its total expenditures on purchased transportation.

Lost Visibility for Shippers AND Consumers

In the cases of FedEX and UPS, when freight is outsourced it’s not just shipping companies losing visibility, it’s all of us – the consumers – losing visibility. Consider that Amazon itself outsources much of its freight to UPS and FedEx (in addition to independent carriers). So if UPS outsources a shipment that Amazon outsourced to them, real-time package visibility is often gone. How many times have you clicked a tracking link from UPS, FedEx or Amazon, only to realize your package is currently residing somewhere in freight purgatory? No one seems to know where your package is, and two-day delivery promises are often shattered.

LaneAxis CEO Rick Burnett expounded on the problem in the company’s original report: “Our findings are clear – many Shippers likely aren’t getting the visibility they think they are,” he explained. “Large Shippers and Carriers may be able to manage their own fleets effectively, but with so much freight being outsourced to small Carriers with six trucks or less – which is 97% of the trucking industry – that’s a problem. There’s very little visibility into that network.”

In essence, these massive Carriers and delivery companies are serving as de-facto freight brokers, which is exactly what LaneAxis seeks to eliminate. FreightLINK by LaneAxis now gives Shippers the ability to deal directly with the very same small Carriers that are already hauling their freight – often surreptitiously – via purchased transportation.

Squashing the Status Quo

In trucking, the more things stay the same, the more they tend to stay the same. That’s because the status quo benefits too many big players.

LaneAxis is focused on squashing the status quo. Purchased transportation adds an extra layer of inefficiency, cost, and diminished visibility that must be eliminated.

LaneAxis has long had an accurate pulse on the heartbeat and inner-workings of the trucking industry. It’s a major reason our Shipper-to-Carrier direct solution is resonating with so many across the freight transportation landscape.

To learn more, visit Laneaxis.com.

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Shippers Brace for a Covid Christmas

Posted on by Andrew Rivera
Shippers Brace for a Covid Christmas
How Joining a Direct Freight Network NOW Can Prevent Supply Chain Nightmares Later

Well, 2020 has certainly been an interesting year.

On the business front, the swirling storm of a deadly pandemic, geopolitical tensions, and general unease has many companies struggling to maintain steady footing amid all the chaos.

So what happens now that the holidays are here?

Wait. The holidays are here? In August?

For manufacturers and other companies that move freight, they most certainly are. August is when retailers and other Shippers start ramping up production and putting holiday logistics plans into place. It’s also the beginning of the traditional peak season for the trucking industry.

Of course very little has been “traditional” this year – which has Shippers and Carriers alike struggling to read the tea leaves as they plot out their holiday logistics strategies. Will the usual freight surge take place this year? Or will Covid cripple holiday spending, which for retailers can represent as much as 30% of annual sales?

Apart from a guaranteed economic spike, the best gift Shippers and Carriers might receive this year is the birth of a direct freight network such as the one LaneAxis is building. FreightLINK AND FreightVISION are designed to help companies effectively and efficiently maneuver through times of supply chain uncertainty. And in “trying times like these” – uncertainty is about the only constant.

Just looking back to last Christmas, it wasn’t Covid, but another big “C” – Celadon Trucking – that threw a wrench into the holiday freight season. Just two weeks before Christmas, 2019, the Celadon Group – at one time a $1 billion company – unexpectedly filed for bankruptcy, marking the largest truckload bankruptcy in history. In addition to 3,000 drivers instantly losing their jobs, Celadon’s collapse left many of its high-profile customers scrambling to find capacity just before Christmas. That list included corporate titans such as Target, Walmart, Proctor & Gamble, Alcoa, General Electric, John Deere, and Philip Morris.

Those massive companies undoubtedly had the clout and cash to power through the disruption using a variety of “Plan B” tactics – most likely reaching out to freight brokers and 3PLs. Fortunately, LaneAxis is now on the scene to serve as a Plan A, B, and C.

Capacity at Your Fingertips

The ability to tap into a vast network of on-demand Carriers at a moment’s notice is indispensable. By directly connecting with hundreds or thousands of Carriers that run their preferred lanes, Shippers of all sizes are not only mitigating risk, they are now empowered to completely reinvent their logistics strategies with efficiency, cost-savings, and total visibility at the forefront.

It’s important to remember that 97% of the U.S. trucking industry is comprised of small and independent Carriers owning just a handful of trucks – in many cases just a single truck. So when Shippers scramble to find capacity through a broker or 3PL, those loads are almost certainly being hauled by the very same Carriers LaneAxis is now offering direct access to. During times of calm or chaos, LaneAxis is eliminating the need to utilize intermediaries such as freight brokers.

With FreightLINK, a Shipper can now have hundreds, or thousands, of independent Carriers all under contract – with insurance, Worker’s Comp, and all other contractual requirements managed and monitored by the LaneAxis system. Once a shipment starts, FreightVISION then automates management of the actual movement by providing real-time tracking, geofence entry and exit notifications, in-app messaging, and instantly uploaded e-docs including proof-of-pickup and delivery. Once all parties sign off on the delivery, payment is automatically released to the Carrier.In this year of unprecedented uncertainty – LaneAxis can bring some holiday peace of mind to Shippers. Remember – in the world of freight logistics the holidays are already here. If Shippers/Manufacturers truly want to weather any supply chain storms come Christmastime, they should start building their independent Carrier network NOW.To find out more, visit laneaxis.com.
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Shipper to Carrier Direct: Avoiding Unnecessary Detours

Posted on by Andrew Rivera
Shipper to Carrier Direct: Avoiding Unnecessary Detours

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.

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A Contract Hit – How Shippers Can Avoid Costly Long-Term Carrier Deals

Posted on by Andrew Rivera
A Contract Hit – How Shippers Can Avoid Costly Long-Term Carrier Deals

When Shippers need to move freight on a truck, determining the most cost-effective way to do so is often a guessing game – if not a pure gamble. This is particularly true for mega companies – think Walmart – that move millions of loads per year.

Shippers generally have two ways to pay trucking companies to haul their freight: either commit to long-term contractual rates, or rely on the economic whims of short-term spot market rates, which can be impacted by any number of factors – including global pandemics.

Walmart owns roughly 6,000 trucks and 60,000 trailers, making it one of the largest private fleets in the country. But even the biggest company in the world outsources much of its excess freight to brokers and large Carriers on a long-term contractual basis, and they’re not the only ones. What many of those companies don’t realize is it’s actually the “little guys” moving much of that freight.

A 2016 LaneAxis study created major waves by revealing that the biggest trucking and logistics firms in the country secretly outsource an average of 42% of their freight to small “mom-and-pop” independent trucking companies – a practice known as “Purchased Transportation.”

Translated: many Shippers are simply more comfortable securing long-term capacity at fixed prices to ensure peace of mind and cost predictability. But what the LaneAxis study exposed is that many of the transportation companies they’re contracting with are themselves relying on the fickle spot market to move those loads, often for far less than the original contracted rate.

So who loses at the end? Both the Shippers AND the small independent Truckers who are actually hauling the freight. Who wins? The mega-carriers and logistics companies collecting hefty sums to play ‘middleman.’

Shippers lose by generally overpaying to secure that long-term capacity, while unknowingly losing real-time visibility over their freight. The small, independent Carriers who actually move the loads lose by having those behemoth intermediaries shave anywhere from 20-50% off the total amount they should rightfully be earning.

This is just one of numerous supply chain inefficiencies and questionable practices exposed over the last few months by the COVID-19 crisis.

But as with many aspects of life post-pandemic, a “new normal” is taking shape in the supply chain – and LaneAxis is leading the way. The company’s FreightLINK Shipper-to-Carrier Direct Network is eliminating the need for Shippers of all sizes to utilize costly intermediaries or commit to risky long-term contracts.

By connecting Shippers directly to Carriers via a vast and dynamic on-demand transportation network, the two sides can negotiate rates fairly and directly via the LaneAxis platform. Both sides will make and save money by cutting out mega-intermediaries and the mega fees they consume. Shippers are now empowered to build a vast independent carrier network that will virtually eliminate capacity concerns regardless of market conditions. That’s because they now have the ability to connect with hundreds of thousands of small trucking companies they never knew existed, and who are all now vetted and visible inside the LaneAxis portal.

Further, LaneAxis’ FreightVISION platform ensures complete transparency and trust over all freight movements by providing Shippers real-time tracking, e-docs, proof of pickup and delivery, and much more. Small Carriers, in turn, will receive the full and fair payment they’re entitled to – and generally receive it in 24 hours via the FreightVISION payment gateway. Currently independent Truckers often have to wait weeks or even months to get paid after a shipment is complete.

Bottom line: going direct via FreightLINK virtually eliminates the need for Shippers to enter into long-term contracts with giant transportation companies. It also frees both Shippers and Carriers from relying on costly and clumsy broker-based load boards to connect.

It’s a true win-win for both Shippers and Carriers.

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