Trust Issues: Building the Modern Carrier Selection Funnel to Eliminate Risk

Think of the future carrier selection tech stack as a funnel.

At the top of the funnel, sits your Transportation Management System (TMS), serving as the system of record for all carriers already in your network. The next layer down are your load boards. Then, to vet totally unknown carriers, brokers have long turned to traditional resources, like Carrier 411. In theory, these tools provide you with the essential data you need to do the job. Many brokers rely solely on these data points, combined with trusted “tribal knowledge” when bringing new carriers into their networks.

But today’s freight environment increasingly relies on digital and even automated matching processes. This relationship-centric business now demands fewer personal touchpoints to carry out. The result: loads are going to more unknown entities, and fraud has become rampant. The carrier selection funnel is still too wide.

Enter the layer of “trust tech”; the new tools on the scene that fill the gap that is preventing good, responsible, and scalable carrier selection in freight brokerage. This new funnel is the blueprint for the next-gen freight broker tech stack. 

Filling the Gap: Trust

“Trust” isn’t a buzzword; it's the linchpin of successful broker operations. You exist to be a layer of trust and efficiency between your shippers and carriers. But how can you ensure that the carriers you bring into your network are the right fit at the right cost? In an industry flooded with options, making the correct decision without having first-hand knowledge of a carrier’s track record is daunting. 

Traditional vetting processes fail to sufficiently narrow the funnel. With reports of strategic theft that seek to evade typical compliance efforts up 430% YoY in 2023, much more is needed. 

The challenge lies in enabling your team to vet hundreds of carriers, each presenting varying levels of reliability and performance.  Freight brokerage is one massive risk assessment exercise. Is that low rate from an unknown entity going to deliver with acceptable service results for your customer? Or will they pick up late, bounce from the load, or even double broker it to another carrier? Your TMS, a load board, and rudimentary carrier listings don’t provide enough data points to answer these questions.

Adding new technologies to the funnel can give an added edge, and practically remove the risk from the assessment altogether. These new “trust” tools provide deeper profiles on unknown carriers, highlighting their strengths, weaknesses, and associated risks like never before. 

So, what tools help build that trust? By focusing on two key areas you can build out a data-driven funnel that only lets the most trustworthy carriers through.

1. Carrier Identity & Compliance - Who I should work with

Carrier Identity & Compliance provides brokers with an innovative approach to ensure that every carrier is who they say they are and is safe to work with. One example of technology disrupting the traditional methods of vetting carriers is Highway.  

It’s important to hone in on a tech product like Highway’s that benefits trust-building through

• Direct connection with carriers to reduce friction and potential miscommunication. 
• Automatic owner validation ensures brokers always know who they’re working with. 
• Analyzes Certificates of Insurance to make sure carriers meet necessary prerequisites
• Offers real-time location data to monitor and verify carriers’ movements. 
• Proactively identifies alerts to detect potential threats, reducing risks of fraud. 
• Provide advanced geospatial algorithms to offer accurate carrier route matching. 

Other tools like Carrier Assure, RMIS, My Carrier Packets, and more round out the profiling on risk and safety compliance, with varying degrees of sophistication. 

2. Carrier Performance - Why I should work with them now

The freight industry demands a meticulous understanding of carrier performance, ensuring that any new carrier will deliver optimal service levels before they’re brought into the network. 

In the world of freight, tools that gauge the potential performance of carriers on specific lanes have become invaluable. Such tools help in ensuring service levels remain at their peak. David Correll, a research scientist and freight expert at MIT CTL, encapsulates the significance of ISO in this domain: "ISO is doing what much of our research suggests needs to be done: integrating data across firm boundaries — across supply chain partners — in order to solve operational problems." Correll’s insights align perfectly with the broker’s need for a more data-driven approach in evaluating carrier performance, leading to smarter and more strategic partnerships. 

Another issue is the lack of standardization, making it tough for brokers to compare carriers and their performance. 

However, with advancements in technology, brokers now have access to comprehensive databases that offer industry-wide benchmarks that offer deeper insights into the performance patterns of both in-network and out-of-network carriers. 

A tool like ISO’s Power Lane is illustrative of this evolution. It aids procurement efforts by providing insights into carriers that perform best on your specific lanes. You’re not just working with a carrier but with the right carrier for the job. 

Standardized metrics simplify performance evaluation: 

• Understand relative performance: ISO offers insights into carrier performance against industry-wide benchmarks. 
• Automate Performance Insights: Performance API integrates data into broker processes, aiding data-driven decision-making for your teams. 
• Share Performance Metrics: Dynamic scorecards ensure a shared understanding of performance between shippers, carriers, and brokers. 
• “FICO for Freight”: The ISO Score provides a single performance metric – a single source of truth – allowing brokers to match carriers with loads confidently. 

With data-driven tools like ISO, brokers can enhance their services, standing out in a competitive landscape. The company's platform provides a neutral ground for shippers and carriers to measure performance, bringing transparency and alignment to both parties. 

Topping it Off: Automation and Optimization

As the freight industry strides towards optimization and automation, the success of this transformation hinges on the integrity of the data we depend upon. Without trustworthy and accurate data, even the most sophisticated automated processes risk accelerating inefficiencies, triggering a cascade of adverse outcomes. 

Issues like rampant fraud, unsustainable pricing models, and subpar customer experiences are often symptoms of a system operating on flawed or incomplete information. Therefore, the emphasis should extend beyond merely the speed and efficiency of operations to fundamentally concentrate on the quality and dependability of the data powering these processes.

The modern carrier selection tech funnel is a comprehensive evolution towards fueling your carrier sales operation with the data necessary to always be smarter, more data-driven, and better informed in freight matching. Frivolously upgrading existing tech systems of record like a TMS or load board isn’t the solution. Brokers need to move beyond just adapting to today’s challenges and hone in on future-proofing businesses in an ever-evolving industry.