How Can Brokers and 3PLs Weather the Continued Storm?

Recent headlines in the freight brokerage sector have been curious at best and quite concerning at worst. With the overall freight market still in an extended downturn, the total number of freight brokers registered may have hit its peak for the foreseeable future. 

According to Brush Pass Research, which gathers information and sales intelligence for the freight broker space, there are 11.6% fewer brokerages in July 2024 compared to July 2023. Since November 2022, nearly 5,000 brokerages in the U.S. have ceased operating. 

Such news isn’t confined to fly-by-night shops. Coyote Logistics, once a company considered to be on the front lines of innovation in the industry, will be acquired by XPO spinoff RXO after owner UPS had been looking to sell Coyote. Per Transport Topics’ list of top brokerages by revenue, that means Coyote is being acquired by a company that was $2 billion smaller by revenue in 2023. 

Additionally, C.H. Robinson, the top freight brokerage in the U.S. by a significant margin per the Transport Topics list, reportedly laid off a significant number of sales representatives at the end of June. 

There’s no clear consensus on when the post-COVID freight recession will be over, either. According to some observers, a rebound is unlikely until at least 2025, while other reputable industry sources say there are “definitive signs of the market turning.”

If you own a brokerage or play a significant role in its day-to-day operations, you are likely looking for ways to make business run more smoothly and successfully during an uncertain era. While there’s no magic solution that will fix all of what currently ails the industry, automation powered by artificial intelligence can help brokers and 3PLs immensely in the current freight market. 

Why should brokers and 3PLs invest in automation and AI? 

An extended downturn that’s affecting every brokerage in North America and causing many to cut costs may seem like a curious time to spend on new technologies like automation and AI. However, there are several benefits to taking the leap now. 

To begin, a vast majority of companies across the supply chain ecosystem have not yet deployed AI tools, with recent surveys indicating that 77% of supply chain professionals have not yet fully integrated AI into their processes. This is despite 82% of the same respondents saying that AI will have a significant effect on the industry in the next five years. If your company can take advantage of the adoption gap now, it could give you a competitive advantage and pay huge dividends. 

By going live with an automation and AI solution that gathers data from multiple ingestion points, classifies and transcribes documents, handles duplicates, and processes exceptions hands-free, your brokerage can become much more efficient without having to increase headcount. This means that your existing team can focus on the most pressing tasks that add value and require human brainpower. 

Using AI can also help a broker or 3PL simplify its operations with actionable insights and create a more agile culture that emphasizes improving the numbers that matter. 

Last but certainly not least, automation and AI can help brokerages become more attractive to shippers and carriers because of prompt and streamlined invoicing and payments, respectively. With fraud in logistics a crucial topic that has required recent Congressional attention, a broker or 3PL’s partners need assurance that the rug won’t be pulled out from under them when running their businesses. In turn, the automation that helps brokers convey dependability can also improve cash flow to help fund the original investment in AI and related tools. 

Learn more about how to automate and adapt during our webinar with TIA 

If you’re interested in discovering how automation can help your brokerage or 3PL during a changing and uncertain freight market, look no further than our July 24 webinar with TIA as part of their Lunch & Learn education series.  

During this 45-minute session, Emily Stratton, Transflo’s Vice President of Customer Solutions, and Justin King, Transflo’s Chief Product Officer, as they tackle the ways freight brokers use automation to boost operational efficiency, the bottom line, and more. Click here to register. 

If you’d like to hear more about how Transflo solutions like Workflow AI can be utilized and customized for your brokerage’s needs, reach out to a member of our sales team today.