Current market a hindrance for carriers and brokers alike

How Ditat helped US Cargo Brokers optimize amid economic throes

To say the least, the last few years for the transportation industry have been turbulent.

Motor carriers enjoyed elevated demand from mid-2020 through spring ’22, an environment that provided plenty of freight for them to move and stronger rates as consumers spent their stimulus dollars.

But a drop-off in demand came on quite suddenly during the second half of last year. As a result, rates dropped and tender volume rejections sank to near 2019 “bloodbath” lows, where they continue to hover, as observed in FreightWaves SONAR’s Outbound Tender Reject Index (OTRI) chart below.

FreightWaves SONAR OTRI shows excess capacity and softer demand compared to previous years. Right now, carriers are accepting as many loads as they can.

The OTRI is a gauge of carriers’ willingness to accept tendered loads — essentially supply and demand for freight-hauling services. Based on the available capacity in the market, higher tender rejections indicate higher demand for their services while lower rejections demonstrate lower demand.

In other words, right now there are a lot of players in the mix — and less freight to go around. This has pushed down rates and spurred carriers to accept as many loads as they can, as FreightWaves founder and CEO Craig Fuller noted in the March “State of Freight” white paper.

For freight brokers, the beginning of a downturn when spot rates begin to drop isn’t always a bad thing as they can leverage the gradual rate decline to maintain wider revenue margins. However, profitability may eventually decrease as low rates persist.

For carriers, these market headwinds are evident in the trucking company closures that have become more common in recent headlines.

Brokers haven’t been exempt from the turmoil, as FreightWaves has covered  significant brokerage layoffs already this year as the industry adjusts to the current supply-and-demand levels.

Overall, it’s fair to say that many businesses, carriers and brokers alike, are experiencing economic barriers to growth.

That begs the question: What can these freight businesses do about it?

Tech investments like Ditat can help facilitate growth

While no single company can control the external economic factors that challenge its business, it does have control over its internal processes.

Just like many transportation businesses, US Cargo Brokers, an Illinois-based cold chain logistics service provider, faced significant challenges in managing and growing its operations before finding Ditat, a carrier and broker-focused TMS headquartered in Missouri.

Many of its challenges could be traced to all-too-common internal back-end inefficiencies slowing things down.

“Our growth and potential were being hindered by manual processes and limited visibility into workflows,” said Adam Konopko, US Cargo Brokers founder.

Without a way to streamline billing processes, for example, the company was burdened with repetitive and time-consuming tasks. Often, such inefficiencies result in wasted time, cash-flow bottlenecks or worse, slow turnaround to customers.

Because US Cargo is driven by its purpose to deliver exceptional customer services, it knew it needed to change things up. This is why it chose Ditat for its TMS.

“After adopting Ditat’s TMS, US Cargo experienced a complete transformation,” Konopko said. “The advanced automation capabilities allowed us to simplify our processes, while the centralized management system enabled excellent integration with our existing software solutions.”

The result? A significant increase in productivity, which has led to faster decision-making and improved customer service, according to Konopko. Ditat allowed US Cargo to optimize its invoicing procedures for timely and precise billing, enhancing cash flow and overall financial health.

For many brokers and carriers, data visibility carries a heavy weight when it comes to their TMS provider decision. After all, a TMS that allows a company to have a 360-degree view of all its critical metrics can help it react to shifts in the market and make better business choices.

Konopko echoed this sentiment: “Finding a solution that featured seamless integrations, in-depth reporting and robust analytics capabilities was crucial.”

With Ditat, the business found all this and more, including essential key performance indicators such as lane performance analysis that allow it to identify more profitable routes and those that might not be sustainable over time.

“This valuable insight empowered us to make well-informed decisions and strategically allocate capacity, maximizing profitability and maintain a competitive edge in the market,” Konopko said.

US Cargo also realized other benefits as well, such as Ditat’s ability to provide clients with access to their own portal, giving them full visibility into their shipment tracking and an option to view all relevant documents.

Ditat’s usability has been another major benefit. Its user-friendly interface, like its customizable planning and dispatch board, strikes a happy balance between simplicity and intricacy that allows for high-level functions.

“The entire UI [user interface] and process design allows our employees to easily navigate, shift focus to other tedious matters and operate the platform while taking advantage of its advanced features, ultimately contributing to adapting to industry changes and staying ahead of the competition,” Konopko said.

US Cargo was able to grow and improve its business over the last year using Ditat, making life easier for both its employees and customers.

“Ditat’s team is a great group and a pleasure to work with,” Konopko said. “The support staff is always available to assist with any questions and issues. They provide weekly system updates that continually enhance the platform, ensuring it remains up to date and ahead of the curve. As we maneuver the ever-evolving freight industry. We are delighted to continue scaling and growing by using Ditat.”

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