How an Asset-less 3PL is Changing The Freight Industry
One of the most common challenges we faced, especially dealing with larger shippers, is how can we compete with asset-based carriers and 3PLs having zero trucks of our own?
When shippers evaluated a partnership with a new 3PL, they look at four main areas:
Price, Lowering freight expenses is a common goal amongst every shipper regardless of size.
Scalability, being able to cope with sudden shipping demands, and downscaling when needed.
On time deliveries, with the ever growing demand of on-time deliveries caused by businesses offering same day deliveries on e-commerce orders.
Dedicated account management, having a single point of contact who is available for immediate contact at all times!
And these ares are in reverse order! according to a survey we submitted to over 150 customers, asking them to sort these from the most to the least important.
Pricing, although a deciding factor, was the least important deciding factor.
To be able to provide customers with competitive industry pricing we took the following steps:
Free Non-forced Dispatch, FreightOn now offers FREE* dispatch services to owner operators and even carriers with smaller fleets. Earlier, these carriers outsourced dispatching and invoicing to third party companies. By offering carriers free* dispatch we are able to save them an average 10%. This allows us to know where and when a driver will be empty, gives us time to book a load for them ahead of time and minimize dead head miles between jobs.
Flat commission, Instead of charging a variable commission on shipments, FreightOn is the first 3PL to charge a flat rate on top of the carriers pay. This guarantees that the carrier who is actually performing the job gets paid fairly and shippers are not overpaying high commissions to brokers.
No Factoring, by offering 7 day FREE quick pay to our carriers, we eliminate the need to use factoring companies which usually charge carriers 3% of the invoiced amount.
Not only are we able to save shippers on their freight costs after implementing the steps above, but also make sure that carriers, who are the hardworking people performing the task, get compensated fairly for their time and hard work.
With an ever growing number of carriers signing up to our dispatch service, FreightOn is able to scale up operations with short notice for our customers once demand arises. It also worth mentioning that small owner operators represent 84% of the 530,000 carriers on the road (according to the FMCSA and the MCMIS data snapshot published in May 2018).
AI and machine learning play a vital role in predicting pricing spikes, driver patterns and being able to recommend loads to carriers in much more time and cost effective manner.
On Time Deliveries
Tracking and status updates are in the core design on the FreightOn platform which is designed to notify our certified freight agents in the event that a driver will not make it to a prescheduled pickup or delivery window. Having access to our carriers driving history allows us to better plan loads in accordance with the regulations enforced by the DOT relating to the number of hours a driver is allowed to drive every day.
Furthermore, many variables can effect a load's lifecycle. It is not a matter of if an issue arises, but when an issue arises that the shipper will need an experienced agent to handle it and present a solution.
Dedicated Account Management
We are proud to have the best freight agents in the industry. All our agents must undergo multiple steps including studying, taking an exam and passing an in-person interview before being hired as a certified freight agent.
Every customer is assigned a single account manager, all communication with that shipper is done through the account manager who handles all freight needs related to that shipper.
Customers who switch to FreightOn have reported savings of 5-10% on freight shipping costs. Carriers who switched to use FreightOn's Free* dispatch service have reported an increased income average of 7%.