Ongoing changes in shipping patterns caused by the COVID-19 pandemic are spurring the expansion of digital freight platforms that can provide shippers with access to carriers and rate quotes in close to real-time. C.H. Robinson Worldwide took a major step in that direction this week by integrating 19 transportation management systems (TMS) and enterprise resource planning (ERP) systems into Navisphere, its global, multimodal transportation platform.
“During the pandemic we had a lot of customers who saw their normal freight just turn on its ear due to different consumer buying patterns,” Mike Neill, chief technology officer at C.H. Robinson, said in an interview. “They needed help with lanes where they may not have a carrier set-up. Customers and TMS providers began reaching out to us, and we jumped on the opportunity.” The third-party logistics provider has seen a 55 percent increase in digital transactions with customers year to date compared with the same 2019 period, he said.
That is a sign of how large an impact the COVID-19 has had on how goods are shipped within the United States. “The way freight is moving and where it’s moving to have changed,” Neill said.
In the food and beverage sector, for example, “a lot of freight was moving directly to restaurants, and now that’s shifting more to grocery stores,” he said. “Consumers are still eating and still drinking, but they’re purchasing food in different ways.” That means it’s being shipped in different ways, too.
“Imagine you’re a big beverage shipper,” Neill said. “You’ve always known the lanes you use, when your peak will be. Now COVID-19 comes along and all those lanes aren’t the lanes anymore. The normal pattern has been disrupted in real terms, in the number of loads, pallets, shipments, and the destinations themselves. Maybe you’re going to Saint Pete Beach rather than Tampa. You can spend hours on the phone trying to sort through these changes.”
Saving shippers hours
That is where C.H. Robinson’s integration with TMS providers that include Banyan Technology, Blue Yonder, FreightView, Kuebix, and Oracle Transportation Management, among others, can help, he said. The connections and automation made possible by the integration can save shippers an hour of time per transaction, with nearly instant market rate quotes, said Neill. For large shippers, that can mean thousands of hours of saved time and access to a larger pool of competitive rates.
“Imagine you’re responsible for moving freight and it usually goes through the route guide,” meaning freight potentially is tendered to several carriers before it finds a tractor-trailer, Neill said. “Taking an hour off the time spent doing that is a significant improvement.” Being able to get a quick rate quote would also be an improvement, and digital freight platforms and brokers have been rolling out “book it now” type features for both truck drivers seeking loads and shippers offering them.
The way shippers book truckload freight is changing, too, Neill said. “We’re seeing a change in routing guide behavior. We’re seeing people drop out of routing guides more quickly and go to the spot market after the primary carrier refuses a load,” he said. “We’re getting a lot of that freight.”
Shippers do not want to wait to hear back from a secondary or tertiary carrier. “If you’re not the number one carrier, you’re not getting that freight,” Neill said. “Customers want something quicker.”
Digital freight platforms are not disrupting brokerage as much as expanding its potential reach, he said. “C.H. Robinson is over 100 years old, and our business model has always been a platform; we started out doing all our business on a chalkboard. Now we’re digital, and the more customers we have, the more carriers we have, the more data we harvest and turn into value. They give us more freight, we offer more to carriers, and the platform flywheel spins.”