Shipping & Freight News

Are Digital Brokerages the Future of Transport?

August 12, 2022

Shippers and carriers have more choices than ever when it comes to brokerage services. Modern brokerages fall into 2 main categories: traditional “people first” brokerages, and online digital brokerages.

Digital brokerage platforms seem to be the hot new thing in transport, garnering untold venture capital investments and major attention from some of the industry’s biggest players. These platforms are growing in popularity thanks to the promises of convenience and higher efficiency. At the end of the day, digital brokerages are still dependent on a human workforce for many important tasks, including customer service.

One potential advantage offered by digital brokerages are the lower transaction fees offered by these platforms. With so much of the human element removed from the equation, digital platforms must offer very competitive fees in order to attract customer attention. The prospect of lower fees can be a selling point, but it also comes with a hidden cost.

Can digital brokerages handle every shipping situation? Discover the answer to this question and more on the Stay In Your Lane Podcast.

In the current climate of high volume and rampant uncertainty in the transportation industry, the value of maintaining a strong network cannot be underestimated. Having a broker in your corner that you know on a personal basis can be a lifesaver in an emergency.

The digital versus traditional brokerage choice is further complicated by the tight shipping capacity found in today’s market, which is only made worse by the high cost of diesel fuel. Many shippers may choose to work with a digital brokerage out of convenience when capacity is loose. When capacity is tighter, shippers turn to conventional brokers for the added assurances they offer.

Digital brokers might also struggle to meet a shipper’s needs for certain specialized forms of transport. Tight foodservice shipments that must fall within a 2–4-hour window can be difficult for digital platforms to accommodate. Muti-stop shipments also fall outside of the target demographic for digital. Some of these special cases are probably better off dealing with live brokers who can help to meet their unique needs.

Do digital brokerages attract quality carriers? Learn more by watching the latest episode of Stay In Your Lane Podcast.

Like other emerging technologies such as self-driving trucks, digital brokerages are sure to have a place in the future of transport. These platforms are ideally suited to single stop, over the road hauls. The spot market could also be a natural fit for digital brokers. Simple needs such as these may be ideal for the digital space, but the limits of the platform may be tested if any complications arise. Drivers may quickly miss the traditional brokerage style if all they have to fall back on is an app on their phone.

This lack of support presents another possible flaw in the digital brokerage model. The best carriers will want to work with brokerages that offer the highest level of support. Carriers willing to forgo this relationship in favor of lower costs and convenience on the digital platform could also be willing to cut corners in other ways. By working with a traditional brokerage, shippers can be sure that their product will be handled by reputable and established carriers in good standing.

Digital brokerages are here to stay and will likely continue to provide valuable service to the transport market in certain situations. Still, nothing can match the personalized care and attention that you will receive by working with a traditional, people-based broker. Contact Triple T Transport today and discover the difference a personal touch can make for your business.

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