5 Trends Every Freight Brokerage CTO Should Watch in 2023
Freight brokerages are constantly seeking ways to optimize their operations and improve efficiencies. Transportation and logistics is a hypercompetitive market creating an intensified search for better systems, integrated solutions, and services.
As a Chief Technology Officer (CTO) for a leading third-party logistics (3PL) company, my focus is on strategizing and delivering solutions that evolve with the needs of our business. It's an exciting time to be in this role. In addition to hiring and managing teams of software engineering, including product management and overseeing Armstrong's IT network and security infrastructure, there's always an element of learning about emerging technologies.
In this blog post, I'll cover the current trends that every freight brokerage CTO should watch to keep their company on the cutting edge of logistics technology.
Artificial Intelligence and Machine Learning
One of the most exciting trends is the continued expansion of artificial intelligence (AI) and machine learning (ML) systems. These technologies can help freight brokerages optimize their operations in various ways, from predicting shipping volumes to automating pricing decisions. For example, an AI system could analyze historical shipping data to identify patterns and predict future demand, allowing the brokerage to optimize its pricing and scheduling accordingly.
Another way AI and ML can benefit freight brokerages is by automating routine tasks, such as data entry or invoice processing. This can free up employees to focus on higher-level tasks and help reduce errors and delays.
I'm frequently asked whether technology will eventually replace the role of freight brokers. We've explored that topic in a previous post. Despite all the advancements in automation, I think it's unlikely that a freight broker's role would disappear any time soon. Currently, only humans are fully capable of managing exceptions on loads and finding solutions for uncontrollable circumstances, serving as a priceless advantage over technology.
Blockchain technology is another trend that freight brokerages should be watching closely. Blockchain is essentially a decentralized ledger that can record transactions securely and transparently. You can think of it as a social network for a large distributed spreadsheet or database. If everyone in the network focuses on making sure their individual data is correct, then the collective strength of the network is stronger. This technology can potentially revolutionize the logistics industry by providing a more efficient and secure way to track goods and payments throughout the supply chain.
Using blockchain technology, freight brokerages can reduce the risk of fraud, streamline the payment process, and improve transparency and visibility for all parties involved in a shipment. For example, a blockchain-based system could provide real-time tracking and verification of shipments, ensuring that goods are delivered on time and in the proper condition.
Internet of Things (IoT)
The Internet of Things (IoT) is a network of connected devices that can communicate with each other and exchange data. In logistics, IoT devices can be used to track shipments in real-time, monitor environmental conditions (such as temperature or humidity), and even control and optimize shipping routes.
IoT devices can also help freight brokerages improve their asset tracking and inventory management capabilities. For example, RFID tags can be used to track the location of individual items within a shipment, providing greater visibility and control over the supply chain.
The rise of autonomous vehicles, including trucks and drones, is another trend freight brokerages should consider. While fully autonomous transportation is still in the early stages of development, it has the potential to revolutionize the logistics industry by reducing costs, increasing efficiency, and improving safety.
Driverless trucks can operate around the clock without the need for breaks or rest periods, reducing delivery times. Autonomous drones could be used to deliver small packages or medical supplies to remote locations, improving access to critical goods and services.
Why would a non-asset-based 3PL like Armstrong Transport Group be concerned with autonomous trucks? As a broker for 6 of the nation's 10 leading food-based companies, more than 57% of Armstrong's 2022 shipments consisted of food-related goods. Autonomous trucks promise greater efficiencies, which could make a drastic difference in the cold chain. With shorter travel times and better monitoring, food and temperature-sensitive items may not be subjected to the same spoilage risks, significantly decreasing delivery times and the cost of claims.
Cloud Computing and Information Security
Cloud computing is already a well-established trend in the technology industry, but it is also becoming increasingly important for freight brokerages. Using cloud-based platforms and applications, freight brokerages can streamline their operations, reduce costs, and improve scalability.
Cloud-based solutions can also provide greater flexibility and mobility for employees, allowing them to access critical data and applications from anywhere with an internet connection enabled by security protocols and persona-based authentication. This can be particularly useful for brokers who need to work remotely or on the go using a variety of devices.
Deploying a comprehensive security strategy is critical in today's ever-evolving cybersecurity landscape. 3PLs have to armor the entire landscape for hidden vulnerabilities and security risks while allowing for cloud deployments to become easier and streamlined for end-user satisfaction and customer experience.
Does My Business Need All of These Things?
Not all trends may be relevant to every brokerage. CTOs should carefully consider their company's and industry's unique needs and challenges when evaluating new technologies.
Additionally, it's important to remember that technology is not a silver bullet. While the latest platforms can help improve efficiency and reduce costs, they should be viewed as tools to support and enhance human decision-making, not replace it entirely.
Freight brokerage CTOs should prioritize a culture of innovation and continuous improvement, leveraging technology as a key enabler. Doing so can help their companies stay at the forefront of the logistics industry and better serve their customers in an ever-evolving marketplace.
Stay Ahead of the Evolving Logistics Landscape
The logistics industry is changing rapidly, and freight brokerages must be prepared to adapt to these changes to remain competitive. As a leading transportation and logistics provider, Armstrong Transport Group is committed to staying ahead of the curve and providing our customers with the best possible service.
We believe technology is crucial to this commitment, and we are constantly evaluating new ways to improve our operations and provide value to our customers. From AI and machine learning to blockchain, IoT, and cloud computing, we are watching these trends closely and implementing them where it makes sense for our business and customers.
About Vamsi Tirnati
Tirnati serves as Armstrong’s Chief Technology Officer, bringing over 20 years of experience in transportation, logistics, and technology. With a bachelor’s degree in Electrical Engineering, a master’s in Computer Science, and an MBA, Tirnati is an expert in integration, systems development life cycle, and enterprise software.