Carrier scorecards represent next generation of visibility

Transportation industry suffers from too much of a good thing

Visibility is becoming more and more important in the logistics industry. Shippers naturally want to keep a close eye on their freight, and this instinct has only grown stronger in the face of pandemic-related uncertainty.

“Everybody wants to know where their freight is because there are such short lead times. Product availability is scarce due to the lasting effects of the coronavirus pandemic, making every load a hot load,” said Mike Riccio, Leonard’s Express chief marketing officer. “If a carrier isn’t willing to utilize track-and-trace software, it does send up red flags. We have some customers that require it 100% of the time.”

As visibility solutions have become more accessible, they have started to move from “perk” to “necessity.” This transition is expected to continue over the next several months to years, getting another boost when the freight market cools down and regains equilibrium. 

“Once the market loosens up a bit, brokers and shippers will be in a better position to demand compliance,” said Troy Wiitanen, Leonard’s Express vice president of logistics. “With all the different unforeseen events that happen — from wildfires to pandemics — visibility will continue to be an important conversation. Brokers and shippers will be looking for carriers who are sophisticated enough to handle their business and provide accurate visibility information.”

When the vast majority of carriers have implemented visibility solutions, more brokers and shippers are expected to start ranking and scoring carriers on compliance in their provision of accurate, responsive and timely shipment visibility data. Eventually, those ratings will likely become part of contract negotiations with carriers, allowing carriers with higher compliance scores to get better rates or more freight than those with lower scores.

“When we have that greater visibility, I think we will consider implementing carrier scorecards,” Riccio said. “Those that comply and grade higher will ultimately become the first-choice carriers that we utilize, helping us develop a preferred carrier network.”

Leonard’s Express is also utilizing third-party solutions like Trucker Tools’ Smart Capacity to increase compliance and expand the company’s carrier base. The tool opens its freight up to a carrier base that is otherwise difficult to reach — largely owner-operators and small carriers. Additionally, these carriers are already comfortable with track-and-trace software, becoming familiar with it through their partnership with Trucker Tools. 

As visibility becomes increasingly crucial, Riccio expects tools like Smart Capacity to become more popular with brokers hoping to expand their networks and improve their compliance rates.