I interviewed Brett Parker who discussed Increasing Efficiency in Local Trucking through Technology.
It’s great to speak with you today, Brett, and I’m looking forward to hearing your views today on the topic of increasing efficiency in local trucking through technology. Before we start, can you provide a brief background of yourself?
Sure, yes, and thank you for having me. I come out the supply chain logistics industry. I grew up on the docks in a family business, loading and unloading trucks, working in the shops. I really have been involved in trucking and transportation my whole life.
That company is called The Triangle Group. They focused on consolidation in the local markets, picking up local shipments, consolidating them onto full truckloads going cross country for the retail community—the Levi Strausses, the Dillards, the Perry Ellises of the world—and also doing a lot of port work—picking up containers from the ports, unstuffing them, and doing a lot of value-added services for that retailer. I grew up in transportation, and that’s really been my background. That obviously has been an easy transition for me into Cargomatic.
Great. Can you talk about how you increase efficiency in local trucking?
It all starts with a problem. When we started this company, we really sat for a month, my partner and I, whiteboarding what the problems were that we were looking to solve. This business is $77 billion and growing. When you go and look at that business, the local trucking community, the guys with six trucks or less who are really our customers, our niche, are doing 85 percent of that business. These are first-generation, second-generation immigrants, entrepreneurs, hard works who are in the local marketplace, making all of this commerce happen, and there’s no technology layer; there’s been no focus on the local supply chain. All of this is happening very, very inefficiently, really old-school.
A typical scenario is with the Rolodex. A guy has a Rolodex of a couple of truckers, they call them, and after that it’s a big, black hole. If that trucker is 100 or 50 miles away at the time they need to book a shipment, well, that shipment will just have to wait.
What we’ve done is taken all of this capacity, we’ve given them our app, and now everybody has visibility and transparency into where the capacity is. These truckers now can market themselves, market their capacity, and now actually market their access capacity. If they’re driving by a warehouse and that warehouse has a shipment of three to four pallets, and that truck that’s going right by, going that way to the destination, has room to take that shipment.
Now you can make that shipment happen because of the technology layer that we put in. That’s a really efficient way to operate: taking advantage of excess space on trucks.
Can you talk about who’s involved with this process?
Sure. There are multiple stakeholders. We have a double-sided marketplace, if you will. On the one hand we have the shipper. Who are those shippers? They’re the freight forwarders, they’re manufacturers, distributors, and they’re the carriers themselves. Those are the shippers taking advantage of the capacity that’s in the network.
On the other side of the fence are the carriers, and those are the guys we’re giving excess revenue to, we’re giving technology to, we’re collapsing their admin expense by just paying them out automatically. You have the shippers on the one hand, the carriers on the other hand, and then you obviously have Cargomatic in the middle as the technology layer.
Can you talk about the obstacles you face?
As you know, in start-ups there are many, but I would say one obstacle we’ve been focusing on recently is quality, giving that consistent product to the shipper every time. For us, that’s making sure the driver has his app on, he’s going through the workflow, uploading proof of delivery, getting a signature from the consignee, the place they’re delivering the shipment to.
When a carrier doesn’t do that, we have an immediate feedback loop from the shipper, so we go and counsel them. If they can’t deliver a high quality of service, we have to deauthorize them. I think that quality is paramount importance in keeping our product the best in class, so we really focus on that. That is a challenge.
Another challenge is finding capacity in all the right places all the time. One day we’ll have more shipments, the next day we have to add more carriers; it’s really a nice growing process to find the right truck at the right time at the right price. We’ve been very successful to date. We’ve done tens of thousands of shipments with millions of pounds and continue to add both shippers and carriers to the network, kind of creating this network effect in the local marketplace.
There are certainly challenges every day that our operations teams are focused on fixing, but it’s really about picking up and delivering on time. Right now we’re at a 97.25 booked-to-completion ratio, which means a shipment comes in, and there’s a 97 percent chance that we’re going to make that shipment happen for our shipper and that’s important. We want people to believe in the marketplace and come back and use this service.
My last question is: Do you have any final recommendations?
I think that the supply chain is really looked at as a mature industry, so it’s really important to try things. Try things a new way, push your organization forward, push efficiency to the next level. A good example of that is the work we’re doing at the ports.
For example, in Los Angeles port they’ve been dealing with a labor issue and the ships got backed up and you have ships still sitting out in port, waiting to be offloaded. They came to us, kind of looking outside the box, and said, “We hear what you’re doing with technology in the local market. Can you apply this to help us be more efficient at the port?”
It’s been exciting to see that we’ve been able to move containers out the port 100 percent quicker than the old way. We have what’s called a free-flow program. Basically, a container comes in and we pull it off the top and give it to the trucker and they can go to their destination versus having to find an individual container.
It’s thinking outside the box, my recommendation, really trying new things, and push the envelope to be best in class.
Thank you, Brett, for sharing today.
My pleasure. Thanks for having me.
About Brett Parker
"Cargomatic: Increasing Efficiency in Local Trucking through Technology"
Here are some links to recent Cargomatic press stories
COO at Cargomatic, Inc.