The Micro-Carrier Challenge: Building a Reliable and Sustainable Trucking Capacity Network

One of the big takeaways from 2018 was that finding trucking capacity during periods of high demand is very challenging, especially in a highly-fragmented market with hundreds of thousands of single-truck owner-operators and micro-carriers with 9 trucks or less. How do you efficiently tap into this large source of capacity? How do you make it a win-win-win for shippers, carriers, and brokers? And what’s the role of technology in enabling a better way to build a sustainable and reliable capacity network? Those are some of the questions I discussed with Geoff Turner, Founder and CEO of Choptank, and Prasad Gollapalli, Founder and CEO of Trucker Tools, in a recent episode of Talking Logistics.

Choptank and Micro-Carriers

For those of you who might not yet be familiar with Choptank, I asked Geoff to explain his business and their use of micro-carriers. Geoff notes that Choptank is a 20-year old broker that handles about 150,000 loads per year, primarily perishable foods. He says they like using micro-carriers because these small reefer operators are very flexible and easy to work with, and give them more control over their loads than some larger carriers.

Geoff says, “Often our loads have multiple stops at retailers and sometimes we don’t know exactly what those will be until the day before. Large carriers don’t like to deal with that uncertainty, but the small carriers are willing to do whatever we need them to do. That’s especially helpful during times of tight capacity.”

Prasad points out that despite the perception, the largest carriers only carry a small percentage of the total freight shipments. He says, “Small carriers and owner-operators are actually moving about 80% of the truckloads while the larger asset-based carriers are focusing more on dedicated runs.”

Broker of Choice

With hundreds of thousands of small carriers out there, I asked Geoff how his firm can become a “broker of choice” for these operators. Geoff comments that they have worked with the small carriers to adopt apps for visibility and tracking of loads. “By working with us to use these tools, we can give them access to loads from large shippers they would not otherwise have access to,” says Geoff. “That also makes us a broker-of-choice to large shippers who need that capacity.”

Micro-carrier technology

There may be a perception that the small carriers are averse to technology, so I asked Prasad if that’s accurate. Prasad says that is not true. “Almost 100% of these carriers use smartphone apps to do business with brokers, 3PLs and shippers. The problem is, they have app overload. Each app does one small function. They want an app that handles all of their needs.

“What the carriers and brokers really want is transparency,” continues Prasad. “Carriers want to see what is happening at shippers and what traffic conditions are. Brokers want to see where carriers’ trucks are.”

Prasad goes on to state that another big problem for carriers is detention at shipper sites. “By giving brokers visibility to when the truck checks in at the customer gate and monitoring the time spent, brokers can help solve extended detention problems with the shipper without having to make phone calls. That builds trust with the carriers,” he says.

Geoff notes that in the perishables business the shelf-lives are a matter of days and there are so many things that can go wrong, so brokers need to know where the shipments are to detect problems and handle exceptions. The Trucker Tool app enables them to see the truck’s location on a regular basis without having to constantly bother the driver with check-calls.

Technology advancements and lessons learned

Geoff had other examples of how technology is helping brokers, especially with perishable goods, reduce manual workload while creating better customer experiences for both carriers and shippers. Prasad also shared advancements that will help brokers and carriers make smarter decisions, provide connectivity and automate decision-making. For all of their insights and these topics and more, I encourage you to watch the full episode. Then post a comment and share your perspective!