Freight Brokers vs. Shippers’ Agents

Freight Brokers vs. Shippers’ Agents

Freight Brokers

Within the transportation marketplace, brokers provide a myriad of services. Brokers fill the gaps between shippers, owner-operators, and draymen. Brokers also assist shippers and trucking companies with resource and technology-constraints. In addition, brokers help cover capacity shortfalls and often provide ancillary services like transportation management outsourcing.

Like everyone else, brokers want to make money. They earn their income by making connections and knowing the market. Brokers live and die by information. They use arbitrage and leverage between available truckload capacity and shipper demand. When there are plenty of trucks competing, brokers keep their fees to a minimum and work to pair available capacity with shipper needs. When capacity is scarce, rates go up; it’s more difficult to secure capacity and to increase margins over time. Sometimes scarcity results in significant markups over the actual cost of the truck. It doesn’t take long for brokers to cover enough shipments to make a profit that offsets any losses. Interestingly, capacity tightening is often regular, seasonal, even predictable — barring catastrophic events like major storms and geopolitical disruptions. Yet, shippers always seem willing to pay the premium when capacity tightens. Thanks to regularly occurring demand surges, brokers can usually be assured opportunities to turn a profit.

In every shipper’s roster of available carriers and capacity, brokers have their place. This is especially true when shippers don’t have the time or means to find asset-based carriers. They also frequently help with unusual, one-off service requests. To ensure the alignment of costs and value, shippers must think strategically about the utilization of brokers. At a minimum, a shipper should have a relationship with at least one broker, contracts in place, and established rates. Shippers also need to clarify liability, payment terms, accessorials, and required minimum service standards. These terms are required in advance to protect shippers from unforeseen circumstances potentially impacting shipments.

Shippers' Agents

Shippers’ agents act as extensions of your staff. Like your employees, these agents are measured by a combination of service, cost, and quality of work. However, the shippers’ agent model minimizes your fixed costs and helps you avoid making difficult staffing decisions in tough economic times. Inherent to the model is transparency regarding levels of service. Clients also have the flexibility to change service levels without making changes to technological infrastructure.

IntelliTrans is a Shippers’ Agent

IntelliTrans augments the shipper-broker-carrier relationship and provides complete transparency of rates, pricing, capacity, and the entire supply chain. We provide accurate, easy-to-access metrics, and give our customers a clear picture of their freight in the marketplace. Our pricing is on a per-shipment basis, making it purely transactional. In other words, when business is good you pay more, and when business is bad you pay less. Our team of career professionals leverage our technology and honed business processes to drive successful outcomes. We manage your freight regardless of the season or state of capacity in the market.

At IntelliTrans we work on your behalf to keep costs low – consistently. Our team contains cost by effectively managing your commitments with carriers and by avoiding higher fees during periods of high demand and low supply. IntelliTrans partners with customers for the long-term. We earn our fees based on the quality of services that we provide and our ability to innovate. You can depend on us to meet your freight needs with creative, technology-backed solutions.

Supply Chain Machine Learning

Supply Chain Machine Learning

The IntelliTrans analytical toolkit has evolved over the years from Access databases, Excel spreadsheets, Crystal Reports, and OLAP Cubes to dynamic dashboards and scorecards. All these technologies, however, have focused on understanding past performance.

One of the most exciting developments in data analysis is the rise of predictive analytics and machine learning. Now that we understand what happened and why, we have moved towards predicting what will happen and how to optimize outcomes based on those predictions. The shift in analytical focus from past performance to future prediction is a disruptive force shaping many industries right now.

Using machine learning models, we’re able to provide our customers with better foresight to drive supply chain efficiencies and cost savings.

Early Shipment Out of Route Detection

Our machine learning models are based upon our 25 years of experience, and these models ensure the railroad handling error is caught and resolved as soon as the car displays anomalous behavior – usually before railroads themselves detect an issue. This early detection results in substantial savings, increased car utilization, and improved on-time delivery.

Shipment Exception Management & Prioritization

IntelliTrans also uses our machine learning models to predict trip plans for each trip. Any significant deviation from this predicted plan is flagged for resolution by our operations team with the carrier, which ensures these shipments receive timely attention and resolution.

Dynamic ETAs

We provide dynamic ETAs using machine learning models based on numerous factors, including but not limited to weather, network congestion, and switch schedules. This functionality provides a high degree of confidence around empty car supply, on-time delivery and complete transparency of the predicted whereabouts of every rail car, allowing shippers to remove ‘padding’ from fleet sizes and delivery times.

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Fleet Sizing

We help customers optimize fleet size by simulating thousands of what-if scenarios based on probabilistic models. Proper fleet sizing minimizes cost and gives peace of mind that railcar supply is adequate to best serve the market.

Predictive Freight Cost Modeling

We provide accurate freight cost estimates for future shipments by utilizing machine learning models built upon our voluminous shipment and rate data. This enables our customer’s commercial teams to provide reliable quotes to their customers and our customers the ability to create accurate spend reports based on forecasted demand.

Bad Order Repair Duration

We help customers predict the duration of a bad order repair and incorporate that into our dynamic ETA so there is full ETA visibility of every railcar.

Algorithmic TMS Tendering

Algorithmic TMS Tendering

Let’s face it, many TMS products share the same features nowadays. And, with all the noise in the market, it can be difficult to understand what differentiates providers. So, what makes IntelliTrans different? Our dock scheduling feature is unique and so are our predictive exception management capabilities, but the item that really sets us apart is our ever-expanding tendering algorithm.

Our unique TMS tendering algorithm gives load visibility to an ever-expanding set of carriers in a structured, defined order to optimize coverage and cost. Continuous expansion of visibility to carriers means lower-cost carriers can still accept load even when a higher-cost carrier has visibility to it. It also allows more carriers to see your freight when loads are difficult to cover. This method offers substantial savings compared to other transportation management systems that remove the load from each carrier after their time to review has expired. In fact, we found the average cost of carriers that took a load was $110 lower than the highest-cost carrier that could currently see that load. Average savings of $110 per load is impressive in any market.

How Ever-Expansive TMS Tendering Works

Using algorithm templates, shippers and brokers set up automated tendering processes that control carrier visibility of loads and define the order in which they view them. Tendering can be as simple as auto-awarding loads to a private fleet or as complex as multiple tendering algorithms per customer and location, providing load visibility all the way from private fleets to spot bids and load boards.

Tendering Strategies

There are numerous tendering methods and strategies and all our methods can be combined to meet the requirements of your transportation department. Methods can be used across an enterprise, parts of the business, or a specific lane. Example methods include:

  • Least-cost: offer each load to the carrier(s) with the lowest rate on the lane first and expand the offer to additional carriers on a configurable timeline.
  • Auto-award: assign shipments to certain carriers or your fleet.
  • Allocations: award volume on a contractually-committed percentage (i.e., 60% to Carrier A and 40% to Carrier B) or by the number of loads (i.e. 10 loads per day to Carrier A, 5 loads to Carrier B).
  • Service-based: award loads based on carrier service KPIs, which are calculated through our TMS carrier scorecards.
  • Customer-based: award loads based on customer preference for carriers (i.e., all loads to Customer X must use Carrier C).
  • Spot bids: allow carriers who do not have a rate on the lane to provide a bid to take the load.
  • Spot networks: post loads to freight-matching load boards like DAT.

Mock Process

In the offer timeline below, assume that the load is covered at 11:30 am. This means all carriers up to Carrier D can see and accept/decline the load at this time. In other systems, only Carrier D would be able to see the load. If Carrier B takes the load at 11:30 am then IntelliTrans has provided cost avoidance of $200 ($1,200-$1,000). TMS Automated Tendering

VMI: Improving Supplier & Customer Relationships

VMI: Improving Supplier & Customer Relationships

IntelliTrans Vendor Managed Inventory

Vendor Managed Inventory (VMI) has been heralded by many industries, including automotive, consumer products, retail, and more recently healthcare and pharmaceuticals. However, that’s just the tip of the iceberg. VMI has a multitude of applications in a variety of industries, each with unique needs. For example, the IntelliTrans Global Vendor Managed Inventory℠ (GVMI) solution is used by many large manufacturers and consumers of bulk chemicals, plastics, grains, and oil & gas to gain visibility and control of their supply chain.

GVMI is a web-based solution that utilizes sensor technology and six sigma data analysis to optimize supply chain and operations management. Our customers save money by reducing inventory and shipment costs. Sensors in storage silos retrieve information via telemetry and project that information back to the suppliers of the product in those silos. With that knowledge, the supplier knows how much product their customer has, how fast they are using it, and when to send more. This reduces the total cost to serve their customers AND associated working capital.

Keys to successfully implementing VMI

Look for automation that goes beyond measurement.

Game-changing VMI will have the capacity to integrate electronic order creation and send replenishment orders directly from the VMI application to your ERP. Such solutions will exchange the necessary purchase order information to create the transaction, and then monitor quantities delivered against that purchase order.

A VMI solution should be tailored to meet your needs.

If you have a short lead time supply chain with relatively simple replenishment logistics, then your solution should allow you to set high, re-order, and safety stock inventory levels. It should obtain readings multiple times per day and send alerts to your customer service team to drive order fulfillment. Have a longer lead time in your supply chain?  Integrated Collaborative Planning, Forecasting, and Replenishment (CPFR) solutions integrate a demand forecast, silo inventory, and in-transit inventory tracking to provide a forward-looking replenishment plan. These features will ensure the customer always has enough product, while the supplier always has enough lead time to fill the order using the preferred mode and transportation provider.

Ensure “buy-in” throughout the organization.

Regardless of the industry, successfully implementing VMI will require senior management support, collaboration, trust, great technology, and a willingness to rethink the traditional ordering process. Without these essentials, VMI initiatives often fail. However, if those basic building blocks are in place, you are set to reap the rewards: improved inventory turns, service, and sales.

What all this means is that the supplier has a lower cost-to-serve, inventory on-site is maintained at a lower level than before, and the relationship between supplier & customer evolves from transactional to strategic.

Meet the New IntelliTrans!

Meet the New IntelliTrans!

IntelliTrans has spent the past six months developing a new look that complements our expanded services and big plans for the future! 

In 1992, we started as a simple solution to track railcars. But since then we’ve expanded into inventory and other modes of transportation to provide a Global Control Tower to run your supply chain more efficiently. Our new look is more than updated logos and PowerPoint presentations – it reflects all the hard work that’s gone into becoming who we are today. We hope you like it!

We have a lot of exciting things planned in 2019 and we’d love for you to follow us on LinkedIn and Twitter to make sure you’re the first to receive the latest and greatest news. We’re also keen on sharing information and content so please tag us in any of your posts or company updates and we can help spread the word about your successes, too!

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