You don’t have to be an industry expert genius to understand that an empty truck rolls to nobody’s benefit – or that freight sitting idle in a warehouse does not a happy client reach. Enter freight exchange, a logistical service reaching as far back as 1985. It helps empty trucks find transport-less freights. But to explain it in more than surface detail, let’s get deeper into how freight exchange works.
What is Freight Exchange?
A freight exchange is an online platform that allows freight without a transport solution to match with trucks that would otherwise roll empty on their return trip.
For example, a truck from Berlin, Germany, finishes delivering its freight of toilet paper to Poznan, Poland. It now has to return to Berlin, carrying nothing but air. To avoid a wasted trip, the truck operator finds a haul of pencils in Poznan that needs to be delivered to Berlin.
Freight exchange platforms can provide many functions besides being Tinder for logistics, but the core remains the same: a truck without freight meets a freight without a truck. This solves a real issue: it was estimated that, in 2020, a fifth of all European road cargo distance was covered by empty trucks. This is a crippling amount of inefficiency if you care about road infrastructure, truck usage, or the environment.
All of that wasted vehicle capacity could have been filled by freight that missed its appointed transport window, was shipped by a small company that doesn’t do much shipping, or appeared at a warehouse due to some happy little accident.
Why Do We Need an Exchange?
Now, if you have a truck-less freight /a freight-less truck, why would you need an online service like a freight exchange? Well, for the simple reason that those star-struck lovers aren’t going to find each other without help. Plus, if we abandon the metaphor, logistics is a serious business. As such, you need a freight exchange to:
Ensure reliable and trustworthy partnerships: how do you know that a given carrier is going to deliver your goods on time – or that the shipper won’t waste your time with a last-minute cancellation? An online freight exchange platform can do that for you, verifying credentials and checking ratings. It’s also a space for collating feedback and reviews from previous contracts. And if you’re lucky enough, you may even establish long-term collaborations, saving some headaches for a manager or two.
Adapting to technological innovation: without a freight exchange, you’d need a manager – or multiple – to phone around, looking either for shippers or haulage companies to fulfil your needs. With a freight exchange, that work is already done for you. Everything you need is already on an online platform embracing automation and digitization without you needing to invest in it. Heck, as the electronic freight exchange platforms compete, they become a lot keener to provide benefits like integration with existing logistics systems. Plus, as an automated and digitized system runs, it accrues a lot of information. That information can be employed in leveraging data analytics for decision-making. In other words, the future is now.
Addressing regulatory and compliance issues: does an enterprising commemorative plate manufacturer need to know the regulations concerning trucks? Obviously not. The freight exchange will handle that for you as well as ensure that all the necessary documentation is where it’s needed for procedures like customs clearance. Plus, it helps you manage risk and handle insurance considerations while focusing on making more niche plates. There’s also the fact road freight causes a disproportionate amount of carbon emissions – and with the European goal of making that sector carbon-neutral by 2050, carriers will have to deal with all sorts of regulatory issues. Why not get the head start in that race by ensuring that your cargo turns wasted trips into fruitful ones?
How Freight Exchange Works
A modern freight exchange works simply: it connects shippers and carriers in real time, allowing them to post and bid on freight, handle quick online negotiations, and track freight. But let’s cover that in more detail.
The Role of Shippers
As a shipper, you don’t have to go hunting for carriers. It would be annoying enough to book one specifically for your load. It would be even harder to find one that would carry your freight on their truck’s inevitable return leg.
But by jumping onto a freight exchange platform, you can list and post your shipment, then watch carriers fight over it like truck-driving sharks in the water. Plus, this allows you to cast a much wider net, announcing your freight to thousands of foreign and domestic carriers who will then bid for the privilege to take it.
Upload your freight. List all the necessary details. Set your acceptable price. Wait for a truck.
The Role of Carriers
Finding someone who wants you to truck their freight from point A to point B is relatively easy. B to A, however? A lot harder since you’re working with more time and space constraints. But once you hop on a freight exchange platform, you can filter and sort shipments until you find the one going from B to A.
This is doubly important if you have not just any old truck but an electric HDV prepped for ADR freight, but sadly only carrying an LTL – by using a freight exchange, you can quickly find the SME that will turn it into an FTL. And yes, I’m an SME (the other kind) in acronym use.
The Role of Freight Forwarders
Freight forwarders help companies sort out shipping without employing highly paid managers. A freight exchange is your business in miniature, a platform just waiting for your touch. You can find and bid on shipments to secure profitable loads for your carrier partners. The digital platform allows it to be handled much faster.
You can also list and post shipments that your shipper clients want to be handled. And again, a freight exchange will allow you to access a network of carriers and trucks without the need to cold-call business in foreign countries.
Top Benefits of Freight Exchange
The benefits of using a freight exchange are many, but we managed to cram them into a five-point list:
1. Cost savings: a Euro-cent saved is a Euro-cent earned, and freight exchanges can help you do that in multiple ways:
As a shipper, you set your acceptable price and see which carrier will bid the lowest. This cuts away all the tedious research and negotiation that would go into crafting a bespoke carrier contract, plus, as the truck will be going your way anyways, they’re likely to offer a lower price.
As a carrier, an empty return freight means your company pays for the privilege of transporting nothing. But with freight exchange, you can fill that truck up and fulfil the need for profits. If you’re feeling cheeky, you can bid just enough to cover your return costs, not only compensating them but also putting your name out there for another shipper to learn.
As a freight forwarder, hey, it’s a client-searching, freight-tracking, invoice-sorting system that you didn’t have to pay to develop and maintain. Plus, all the juicy data flowing inside you lets you gauge better what the current rates for cargoes are.
2. Increased efficiency: from finding your niche cargo transportation without a week of frustrated phone calls and unanswered emails to turning LTLs into FTLs, a freight exchange platform makes managing the logistics part of your business faster and more efficient.
3. Access to a wider network of carriers: how many carriers does your company know already? Are you sure they’re the best ones or that they’re giving you the best price? Are you certain that a new company or a foreign business wouldn’t give you a better offer? Ah, but what about trusting them? With a freight exchange platform, those worries are a thing of the past. The algorithm will do the matching while you’re free to read the potential partner’s ratings and reviews.
5. Real-time tracking and transparency: when a freight exchange platform provides real-time tracking, a shipper rests easily, knowing that freight didn’t get lost somewhere. They start trusting the carrier as they monitor their progress. And a customer who can trust you to do your job is a happy customer.
What types of businesses can benefit from utilizing freight exchange services?
Freight exchange can benefit any sort of business that has freight to haul or trucks to fill. I’ll still put some examples into a list:
New businesses: while you’re trying to figure out your pipelines, how-tos and best practices, make use of freight exchanges as a shortcut to having established relationships with many carriers.
Manufacturers: if you missed your carrier window because a mouse chewed through some assembly line wires, you might need an ad-hoc logistics solution. This is where a freight exchange can stop many a manager from breaking down in tears.
Carriers: if you have a contract, but your truck is undergoing maintenance to remove some sudden mice-related damage, you may shore up your capabilities by hopping onto a freight exchange. Oh, and you know, the whole “no empty trucks on the return trips” thing.
Freight forwarders: your job is to handle someone else’s freight for them. This makes it easier for you to find and assign a carrier.
Why Choose Spotos as Your Freight Exchange?
So, when it comes to choosing the platform for you, why choose Spotos out of all the freight exchanges in the world?
No subscription fees: most freight exchanges ask you to pay a subscription fee. Spotos doesn’t – we charge the shipper and take our cut success fee only after the carrier has done their job.
Auction-based smart freight pricing: our platform recommends the upper and lower limits of the price to set, and once you post your freight, it is automatically shown as the lowest price. The system will automatically raise the price until either a carrier accepts your load or the upper limit is reached.
Real-time freight tracking: from giving you time-stamped updates of the status of your freight to having contacts of the drivers, Spotos makes it easy to keep an eye on your cargo.
Automated cancellation fees: our system automatically imposes fines on shippers and carriers if they cancel the contract, with the actual sums based on when the cancellation was made.
All sorts of cargo: from your smallest LTL to ADR, Spotos has you covered. With thousands of carriers and tens of thousands of trucks to choose from, there’s one just waiting for your freight.
A wide network of carries: “With thousands of carries and tens of thousands of trucks to choose from, there’s one just waiting for your freight.” – me, the previous paragraph.
Digitized everything: Spotos platform can handle all sorts of digital paperwork, down to POD and invoices.
How can freight exchange help streamline logistics operations?
Freight exchanges streamline logistics operations by making finding a carrier for your goods a lot easier. Post the freight that you have, and carriers will start flocking with their proposals.
What are the key features and functionalities of leading freight exchange platforms?
Key features of leading freight exchanges are a high degree of automation and digitalization, a large carrier fleet, and real-time tracking.
How can shippers benefit from participating in freight exchange?
Shippers benefit from freight exchanges in many ways:
New companies don’t have to develop their own carrier networks.
An easy way to find transport for unexpected freights.
A handy method for developing a working relationship with carriers.
Saves time on finding the best transport offer in the market.
Allows tracking cargo in real-time.
What advantages do carriers gain from engaging in freight exchange?
Carriers are a vital part of freight exchange – and it has benefits for them as well:
Increases profitability by helping eliminate empty return freights.
Gives an easy way to find new carriers to work with.
Offers an easy way to exchange the required freight documentation.
How does real-time communication play a role in freight exchange?
Real-time communication helps shippers trust carriers and keep an eye on the freight, which improves customer satisfaction.
How does freight exchange contribute to cost reduction and improved profitability?
Freight exchanges reduce costs and improve profitability by:
Cutting down on the number of empty return freight and LTL trips. A freight exchange bidding platform ensures shippers get the best deals.
What challenges should businesses consider when entering the freight exchange landscape?
When entering freight exchanges, a business should know that it’s not a service that guarantees an immediate shipper/carrier contract. You may have to wait for the opportunity to present itself. Similarly, the availability of carriers may be affected by your location – if you’re out in the boonies, don’t expect that many ADR trucks to becrowding your neighbourhood.