The Freight Broker of the Future
[Stay on top of transportation news: .]
As these advances in technology continue to take hold, the brokers of the future will depend on algorithmic tools, predictive analytics and machine learning to be competitive in an increasingly margin-sensitive environment.
“Technology in brokerage is and will remain an accelerator,” said Ryan Schreiber, chief growth officer at , a logistics consulting and software development firm. “Done right, technology will allow brokers to have greater price elasticity to solve problems in their business, hire more people or better people, solve more complex problems, pay more to carriers, charge shippers less or all of the above.”
Innovation cycles today are 10 times as fast as they were five years ago, said Dan Cicerchi, general manager of transportation management solutions at logistics technology supplier .
“In the next couple of years, we’ll see the continued and accelerated momentum of technology,” he said.
While the fundamentals won’t change, the way that brokers operate will.
“Brokers will still match freight with capacity, but everything around that will become faster, smarter and more connected,” said Brian Work, president of , a provider of AI-powered communications support.
In particular, the adoption of generative and agentic AI capabilities promises to redefine freight operations.
“I think we have a tremendous opportunity — probably a once-in-a-lifetime revolution in technological capability — that’s going to be inherently transformative,” Work said.
The Science of Pricing
Historically, freight pricing has been one of the most fragmented, subjective and manual parts of brokerage operations, but that is changing.
Brokers are turning to advanced systems to calculate the cost to hire capacity and determine their buy and sell rates and model costs, said Chadd Olesen, CEO of logistics automation firm .
“We’re seeing brokers step up and become more advanced so that they can attract as much yield as possible off the market,” he explained.
AVRL draws on vast amounts of data to automate transactional freight and decision-making processes.
“There’s a lot of calculation that has to happen, and it has to process fast. Some of our systems are processing in 25 to 30 milliseconds,” Olesen said, adding that many pricing professionals still rely on tribal knowledge, basing prices on their experiences and historical patterns. “They don’t use tools like SQL, Python or complex mathematical equations.”
RELATED:A New Wave of AI Is Coming to Trucking
Intelligent tools will help brokers get pricing right the first time and streamline bids.
“We’re taking the end-to-end process of a quote, whether spot or contract, and automating as many of the labor-intensive parts as possible,” said Jonathan Salama, CEO of , which last year pivoted to providing software and data to the industry after selling its freight brokerage business to NFI.
In five to 10 years, maybe even sooner, brokers that don’t have clear, intentional strategies for pricing, carrier networks and operations simply won’t last, Salama said.
“The industry will consolidate,” he said. “We’ll see fewer brokers overall.”
Smarter, Faster Decisions
Business intelligence and reporting tools are available today, but AI, advanced analytics and automation are going beyond traditional analytics and unlocking more predictive insights by identifying patterns and uncovering signals in the data.
“If you have a really good handle on your data and you understand what’s happening in all the different functions, you can create a robust set of metrics by which you can operate the business,” said Lu Saenz, chief technology officer at , a shared truckload freight brokerage. “It becomes almost like quant trading in an advanced hedge fund.”
It will also allow better customization. In shared truckload, Saenz said there is a combinatorial optimization problem that AI helps solve.
“As you increase the number of shipments, the number of permutations explodes to astronomically large numbers, and so you need to process all of that to create your actual fulfillment plan,” Saenz said.
Mastery Logistics Systems CEO Jeff Silver (speaking) says AI can help trucking companies better determine which loads to haul with their own assets and which to handle through their brokerage divisions. (Mastery Logistics Systems )
The ability to mine data quickly helps with route and load planning, which can be especially useful for asset-based trucking companies that also broker freight, said Jeff Silver, CEO of , a provider of transportation management software.
“Today, the good, big asset companies are not selling trucking. They’re selling capacity solutions,” Silver said. “When they get a load that isn’t in their patterns, they should give that to brokerage. That is something you can do with AI.”
For AI to be effective, it needs a clean data pipeline that allows information to move between multiple systems, including load boards, transportation management systems, email and the marketplace, making connectivity between systems critical.
“If you can plug and play and unplug and plug in new technologies as they evolve, it’s a ripe, innovative foundation for AI and what’s coming next,” said Eric Rempel, chief innovation officer at .
Chicago-based Redwood ranks No. 50 on the Transport Topics Top 100 list of the largest logistics companies in North America.
Walter Mitchell, CEO of , expects transportation management systems to be used as the system of record for freight brokerage.
“We want to make sure that we’re leading that effort to help bring all these tools together,” Mitchell said.
Application programming interfaces and an open system will allow technology providers to take advantage of all available information, even as sources change.
(MF3d/Getty Images)
“We want the operator to know about what’s happening in context. In order to do that, you have to bring these external tools,” Mitchell explained. “AI is really good at researching. If you give it access to enough data, it can aggregate it and do research for you in seconds, whereas it would take us weeks or months to do the same research.”
Tom McLeod, CEO of , said the key is to serve up the right information to the user at the right time. McLeod has been integrating decision-making solutions into its product for years and is also leveraging generative AI, business intelligence and data science to streamline communications and boost efficiency.
“This other functionality will mean continued productivity improvements, better service to customers, better margins internally, less people required as freight volumes grow,” he said.
Data can improve real-time visibility into carrier availability, asset readiness and load requirements, which helps brokers optimize execution, improve service levels and reduce time-to-cover at scale.
“Data will no longer be something brokers collect. It will be the core operating fabric of their business,” said Matt Cartwright, CEO of Magnus Technologies, another TMS vendor.
For brokers, the days of scrambling to find a truck on a one-off basis may be numbered.
“Matching carriers to freight has long been driven by phone calls and handshakes, but that transactional piece can and should be automated,” Transfix’s Salama said.
Utilizing Unstructured Data
Brokers already collect mountains of data, much of which goes unused or is unstructured within emails or incoming phone calls.
“It is just quite remarkable how much is happening in an unstructured format,” McLeod said. “Being able to automate that will be a huge productivity gain.”
McLeod Software is rolling out its own AI functionalities and partnering with other providers to bring unstructured information into its operations systems, he added.
Flock Freight’s Saenz said today’s logistics operations involve a lot of emails.
“If it’s a simple use case, you might be able to have an AI agent automatically send something back, or maybe even take a call,” he said.
CloneOps.ai has developed AI-powered virtual agents that can streamline communications and handle routine tasks such as tracking and scheduling.
Want more news? Listen to today's daily briefing above or go here for more info
The AI agents also capture information from various sources and sync it in real time with a TMS. One virtual agent records and transcribes phone conversations so insights can be drawn out and presented in a structured way.
“Our focus is on creating faster responses, cleaner data and better services for all of the users,” Work said. “That allows you to spot patterns across loads, lanes and partners, identify gaps or delays before they create downstream impacts and make real-time adjustments that improve service and cost.”
Descartes has added AI agents to its transportation management software.
“We are rolling out more agents this year that will almost fully automate the post-execution experience for brokers around in-transit deliveries,” Cicerchi said, adding that use cases include a check call agent and a driver support agent.
Metafora’s Schreiber said AI agents that streamline broker operations also can benefit drivers.
For example, if a driver arrives at a facility at 3 a.m. and doesn’t have a delivery number, he calls the broker, who has to get out of bed to provide it.
“That’s better with AI agents,” he said. “The driver doesn’t have the lag of 10 minutes waiting for me to wake up, turn my computer on, and get him the info. I’m better because I’m still asleep.”
Increasing Efficiency
AVRL’s Olesen said there is significant potential for AI and automation to improve the back end of freight operations, especially in finance and operations where manual processes are still the norm.
“AI can massively impact that area and speed up cash flow,” he said.
Using optical character recognition and AI to automate the validation of paperwork isn’t “flashy or sexy,” but it will streamline time-consuming tasks, Salama of Transfix said.
Technology and automation should allow employees to focus on more value-added work.
“When you apply data and business intelligence correctly, you’re giving your team time back to plan, analyze and execute with precision,” he said. “That’s how you optimize freight planning, reduce waste and ultimately improve productivity.”
The broker workforce of tomorrow will include analysts interpreting dashboards, assembling spreadsheets and making strategic decisions, not tracking shipments.
“Soft skills like critical thinking, process improvement and technical curiosity will outpace traditional brokerage skills like ‘book the load fast,’ ” Magnus’ Cartwright said.
Tim Haynes of Penske Transportation Solutions discusses how AI is being applied to fleet management, from predictive maintenance to route optimization.Tune in above or by going to .
Today, freight brokers tend to operate by throwing “low-cost bodies” at problems, Metafora’s Schreiber said.
“That will fundamentally change when you’re automating so many lower-level tasks in an omni-channel way,” he said. “You’ll see smaller teams, more highly trained, and focused on more difficult problems.”
AVRL’s customers are leveraging automation to gain deeper insights into specific shippers’ volumes, business rules and opportunities, ultimately improving relationships.
“They should be on the phone talking to their shipper about what they’re seeing in the market and what’s happening for that shipper specifically today,” Olesen said.
As technology improves and supply chain challenges emerge, brokers are going to discover new ways to provide value to customers.
“That can include being able to decipher trends and patterns and answer complex questions, which can lead to deeper sales opportunities and understanding your customer’s network better and creating better relationships and partnerships,” Redwood’s Rempel said.
Investing in the Future
Despite the advantages new technology can bring, deploying AI and automating at scale can be complex. Systems must understand both horizontal and vertical context and grasp enough information about specific tasks to automate them effectively, Schreiber explained. AI also must recognize and link interactions across different platforms, such as connecting a text message sent 10 minutes ago with a related phone call happening now.
When brokers deploy new technology, it has to work.
“You better give them a good tool that provides phenomenal results with very little room for error,” Redwood’s Rempel said. “When you introduce something and it doesn’t work right more than a couple of times, they’re just going to go back to the way they were doing things.”
Transfix’s Salama has noticed a divide between brokers embracing automation and those actively resisting it.
“A lot of that comes down to culture and compensation models,” he said. “If reps only get paid when they touch a load, they’re not incentivized to automate anything, but that’s going to change.”
One of the biggest mistakes freight brokers can make is getting comfortable with the technology they already have, Tai’s Mitchell said.
“It’s difficult when you’re running your business to take a step back and ask yourself, ‘Where’s my technology hurting me, and where can I be doing better?’ ”
AVRL’s Olesen has found that brokers tend to be conservative when it comes to spending money, which means technologies need to provide a clear return on investment.
“We’ve always been focused on use cases that impact yield and give the carrier or the broker more money,” he said, noting that the key for brokers is not only improving revenue but also improving margin.
While a growing number of technologies are becoming table stakes, Descartes’ Cicerchi recommended that brokers look for ways to use technology as a differentiator.
“The industry-leading brokerages are surgical about where they leverage technology and how it enables and augments their existing people and what they’re doing,” he said.
Industry Voices
“I think we have a tremendous opportunity — probably a once-in-a-lifetime revolution in technological capability — that’s going to be inherently transformative.”
—Brian Work, CloneOps.ai
“Matching carriers to freight has long been driven by phone calls and handshakes, but that transactional piece can and should be automated.”
— Jonathan Salama, Transfix
“Data will no longer be something brokers collect. It will be the core operating fabric of their business.”
— Matt Cartwright, Magnus Technologies
“Done right, technology will allow brokers to have greater price elasticity to solve problems in their business, hire more people or better people, solve more complex problems, pay more to carriers, charge shippers less or all of the above.”
— Ryan Schreiber, Metafora
“It is just quite remarkable how much is happening in an unstructured format. Being able to automate that will be a huge productivity gain.”
— Tom McLeod, McLeod Software
“The industry-leading brokerages are surgical about where they leverage technology and how it enables and augments their existing people and what they’re doing.”
— Dan Cicerchi, Descartes
