We interviewed Jeff Thomas, senior vice president of capacity services for third-party logistics company Transplace, while researching our July cover story on the changing relationships between carriers, shippers, and brokers. This interview has been lightly edited for length and clarity.
HDT: As a third-party logistics company, how does Transplace work with fleets?
Thomas: We’re obviously an intermediary and a transportation management provider. We work with fleets on behalf of our customers. Our goal is to drive value on both sides of the equation, to generate the proper balance where both shippers and carriers can thrive.
HDT: What’s the latest news from Transplace?
Thomas: Some of the things that are most intriguing are our Global Control Tower, which allows visibility across all modes for our shippers, allowing them to consolidate everything that’s going on with transportation in their world into a dashboard view; along with our investments in AI and machine learning to better harness the power of our network. We have a large network of shipments and spend flowing through our TMS, looking at each client supply chain individually and in aggregate, and exposing the trends and offering solutions that span across multiple clients.
For instance, from a carrier side, Transplace has over 200 active transportation management companies we do business with. The ability to contract with Transplace and work across multiple clients … lowers administrative costs for the carrier while providing greater opportunities.
HDT: What kind of fleets do you work with? What do they need to work with Transplace?
Thomas: We work with fleets all the way from the largest in the industry down to owner-operators with say three to five trucks. Safety and meeting customer [shipper] standards is obviously our biggest concern. We vet carefully the carriers that we use. But we have a specific carrier management practice within our business that addresses each niche – the largest carrier or the 200-500 trucks all the way down to the niche carrier that has five or so trucks that is running in a particular market. Our door’s really open to all carriers that meet the requirements of our shippers and internal policies around safety and eligibility.
I would add to that, we manage shippers of all sizes, and so that offers the ability for large carriers to access smaller networks they may not be calling on, and for smaller carriers to be part of a larger network they may not be invited to. We allow more of the marketplace to do business with more of the marketplace.
HDT: From your perspective, how is the relationship changing between shippers, brokers, and carriers in terms of how they connect?
Thomas: It’s really interesting. Technology is definitely making the world smaller and more accessible for everyone, but we believe relationships are behind connectivity and ease of access. The core principals of treating the shipper, the carrier and the third party as equal partners in a transaction is still key, and driving mutual benefit for all is still key, so we play an important role in matching shipper [freight] to carrier capacity. Technology definitely makes that easier, but it still requires relationship management and trust.
HDT: Can you offer some examples?
Thomas: I think we’re all aware of the vulnerability that exists with the driver shortage in the U.S., and it comes down to how you treat the truck driver on the phone, what kind of advantages you can offer to the driver or the dispatcher or the company while doing business, whether that’s making sure their bills get paid on time or working with them in a claim situation or everyone remaining calm when issues happen. Most of the time we all are there to do a job for the shipper and it’s in our best interest to work together. You tend to work together better when you’ve taken time to establish a relationship up front. The key focus is for us to continue to build those relationships with carriers. It’ not the easiest or most cost-effective way to do it, but it’s the best way to make sure the carrier can trust us and we can extend that trust to the shipper.
HDT: There have been numbers of startups, sometimes called the “ubers of trucking,” that aim to totally or partially remove the middleman. What are your thoughts on this trend?
Thomas: We welcome the innovations and disruptive change that’s happening in the industry. There’s been a lot of investment in the logistics sector; quite frankly, I think the competition forces us all to be better in how we do our job. I do think any technology that completely removes the relationship from the 3PL and shipper and carrier and completely automates that, it’s probably missing the finer points. Ultimately there are still choices; it’s a free market and there’s not technology that’s ubiquitous. People do business with the people they want to do business with. It certainly helps to have critical mass and the amount of freight you can provide the carriers; there are multiple companies that have critical mass and technology. I believe the companies that will flourish will keep relationships with carriers as part of their arsenal.
HDT: How is Transplace using technology?
Thomas: We have been on that path for the last couple of years, and some of the seemingly easiest things to do aren’t so easy in logistics. Finding the next load for a truck before it’s been dispatched on the first leg or while it’s on the first leg is harder than in seems. Through AI we’ve been able to identify opportunities that have a strong possibility of success, and that is translating to fewer empty miles, more multi leg dispatches… quite frankly it’s good for us, for the carrier and for the shipper, and it’s keeping trucks in our network. When we find the right freight for the right carrier hauling for the right shipper, that creates value all around. The shipper gets a cost-competitive price; our cost of doing business goes down; and we’re still able to create more value in our relationship with the carrier and pay them a fair market price.
HDT: And keep the truck moving…
HDT: Looking forward, what place does blockchain have in how carriers and shippers and brokers connect?
Thomas: We’ve been involved with the Blockchain in Transportation Alliance pretty much since the inception, and we are there at the table as the standards are being created. I’ve talked about how fragmented the industry is, how many different types of carriers there are, and just like one app will not be ubiquitous, it’s challenging to work through how you get thousands of carriers across the U.S. to be a part of blockchain and provide information to the ledger in a consistent manner. There’s still work to do.
I do think blockchain provides tremendous value to the consumer around food safety, but also can provide value to trucking companies and carriers and 3PLs, such as better forecasting. Again, there’s a fair amount of work to do, and the impact to carriers is not in the near future, probably still a couple years away. I think the complexity of getting carriers of all sizes is going to be a challenge, getting them on a blockchain platform. True ELD implementation, integrated ELDs, may help with that, but I still think there’s probably privacy issues and standards that need to be worked out before everyone know where every truck is all the time.
HDT: What are some tips you can share for fleets?
Thomas: The variety of opportunities and the scale of opportunities to do business with Transplace is extensive. We are in the process of growing a team that’s actively reaching out to the carrier community to identify places where we can do business together the best. But there’s a few of us and a lot of carriers. So we would ask, call us. We’ve been in business for 20 years, we have a good reputation in the industry, and we are committed to driving value for the carrier and our customer in ways that I think have not been able to be realized to date.
I think the advent of machine learning and AI, given a network of our size, provides a unique opportunity for carriers to reduce their empty miles, do business with a company that has a strong reputation, and we are working tirelessly to make that carrier experience better, at a transaction-by-transaction and a day-by-day level.