The New Broker Tech Stack: Why Your TMS Isn’t Enough in 2024

The New Broker Tech Stack: Why Your TMS Isn’t Enough in 2024

As supply chains and logistics evolve, so do tech tools and systems that power these processes. Freight brokers are intimately familiar with the transformative power that tools like transportation management systems (TMS), load boards, and carrier directories have added to the load booking process. These platforms have long been the go-to systems of record for transportation teams across the industry, and they aren’t going anywhere. However, they are no longer sufficient on their own to keep a freight broker competitive.

While operational costs have risen, the market in 2024 presents its own set of challenges. For one, it’s crowded, leading to a glut in capacity. Fraud has also become rampant, making it difficult to grow your network and business with confidence.

Such uncertainties and market volatility underscore the importance of enhancing the tech stack that you’re touting as your big differentiator to the industry. The next game-changing investment for brokers won’t be a better TMS or different load board. It will be a series of complementary solutions that amplify the potential of the systems of record they already have in place.

The Limitations of Your Core Tech Investments

The limitations of your core investments, namely TMS and load boards, have become glaringly apparent in today’s freight recession. Here’s why:

  • They aren’t built for easy insights into the big picture: Traditional systems lack the sophistication to provide brokers with a clear, intuitive understanding of their operations. They leave brokers grappling with an overwhelming data deluge and poor data visualization tools that require a team of analysts to make sense of.
  • They only focus on rates: Today, digital brokerages can make a solely rate-based sales strategy a quick race to the bottom. This narrow focus can blind brokers to the longer term risks in their operating models and the opportunities they have to sell based on their value to customers..
  • They reinforce manual, siloed processes: TMS’ and load boards do little to automate the manual processes inherent in brokering, perpetuating an over-reliance on tribal knowledge and human intervention. Brokers need more granular, reliable data points in order to comfortably automate more of the manual work in carrier selection.

The New Broker Tech Stack You Need To Invest In

To thrive in this competitive environment, brokers must embrace an emerging tech stack that unlocks new dimensions of performance, trust, margin improvement, and automation. The good news: these tools are available today, and they sit on top of your TMS. Here are a few new tech investments you need to add to your stack to stay ahead of the curve.

1. Tools To Unlock Performance

One of the key elements of this new tech stack is the ability to differentiate your network through standardized performance data, dynamic scorecards, and industry-wide benchmarks. In a sea of sameness and a down market, it’s increasingly hard to drum up business based on price or access to unique capacity. But what about uniquely good service?

Many indexes exist for benchmarking freight rates, but until recently there was nothing in the way of measuring your service-level performance and benchmarking it against the rest of the industry.

ISO is supplying the industry with a first-of-a-kind service index. Every broker, carrier, lane, and customer has an ISO Score, the FICO score for the freight industry. The platform also provides dynamic scorecards that help brokers pinpoint their strengths and weaknesses relative to their competitors. This valuable information enables brokers to sell more effectively and optimize their operations.

2. Tools To Build Trust

Fraud is rampant in freight today. Load boards and siloed TMS data help you find a carrier, but how do you know that carrier is who they say they are? How do you know they won’t double broker your load?

The cost of bringing a bad actor into your network goes well beyond the lost margin on a load. Trust is a bedrock that, once broken, will cost you customers and reputation quickly. The new, emerging collaborative tech stack eliminates this risk by focusing on carrier identity, compliance, and service levels.

  • Highway, another technology provider, provides freight brokers with verified carrier identity profiles to reduce fraud, thereby establishing a more trustworthy and risk-free ecosystem.
  • Freight brokers can now leverage tools like Carrier Assure to further understand a given carrier’s compliance and safety history.
  • ISO provides access to lane-based capacity, ranking carriers by service-level performance, helping you understand how they’ll service your load before you reach out.

3. Tools to Improve Margins

Margins are the lifeblood of brokerage operations, and optimizing them is critical to long-term success. The new tech stack provides brokers with the tools and insights to strike the perfect balance between cost and service.

Solutions like Greenscreens, for example, offer freight brokers predictive rate tools so that they have the ability to make informed decisions on when and how to adjust their operations to maximize margins. By embracing these more dynamic rate tools that leverage machine learning to help you anticipate swings, brokers can position themselves for greater profitability and competitiveness in the market.

4. Tools to Enhance Automation

Automation is the holy grail at the top of the new tech stack that promises to revolutionize brokerage operations. Brokers can streamline processes and reduce manual work by harnessing the vast amount of data they have on hand.

The key here: your automation and digital freight matching algorithms are only as reliable as your data. Automating without first addressing the limitations of your TMS will only result in speeding up bad processes. The trust layer is a critical filter that enables truly effective automation.

AVRL, for example, leverages Web 4.0’s collaborative prowess and provides the automation necessary for tasks like tendering waterfalls, carrier selection, onboarding, reporting, and more. This not only enhances efficiency but also frees up valuable human resources to focus on strategic, high-value tasks.

Embracing the Future of Brokerage

The new broker tech stack is called that for a reason. These emerging logistics tech companies are reinventing the way we leverage data from our existing tools. They sit on top of your systems of record, and effectively superpower them. It’s about getting the full value from your biggest investments, not ripping and replacing them in favor of the new model.

If you’re eager to explore the possibilities ISO offers or looking for resources to initiate your tech stack transformation, contact us for more information. The future of logistics is now, and it’s driven by technology. Don’t miss out on the opportunity to optimize your business and shape a prosperous future in the logistics industry.