The question “Why is digital transformation important?” was answered loud and clear in 2020: because you can’t grow your business profitably, and you can’t meet the changing needs and expectations of your customers, unless you do. But how do you get started on this journey? What is the destination? How do customers, carriers, and employees help guide and influence this journey? Those are some of the questions I discussed with Jim Becker, CEO at Becker Logistics and Prasad Gollapalli, Founder and CEO of Trucker Tools, during a recent episode of Talking Logistics.
Scaling for Growth
Becker Logistics is a 24-year-old freight brokerage company headquartered in Chicago, with offices throughout the U.S. and Canada, specializing in food-grade materials and packaging. They handle brokerage for all types of trucking, as well as intermodal and air freight. To begin our discussion, I asked Jim what Becker Logistics’ goal was in undertaking their digital transformation journey.
Jim explained that in 2010 Becker Logistics was a $5 million topline revenue company, while in 2021 they expect to have topline revenue of $100 million. Although their employees are at the heart of their business relationships, Becker didn’t feel they could scale up their employee base fast enough to match their growth. They decided they needed digital tools to empower their workforce to meet their customer service objectives.
Last year Becker did digital freight matching (DFM) on about 2% of its business, but by the end of this year the company’s goal is to have that at 20%. Next year they want to raise DFM to 40%-50%, with a goal of about 90% DFM by 2025. “If we can have that and manage by exception, that is going to allow us to handle the growth we’re looking for,” says Jim.
Jim also comments that besides allowing them to scale up profitably, digitization enhanced their ability to have employees work from home during the pandemic and allowed them to hire people from areas where Becker does not have offices.
I asked Prasad how companies should get started on their digital transformation journey and what milestones they should consider. Prasad points out that companies should start by defining their strategy for digitization in terms of scalability and profitability, and how they can reduce their variable costs. Prasad also notes that digitization helps brokers keep carrier capacity for longer periods of time, which is a basic value proposition. “But like any journey, you have to go one step at a time,” says Prasad. “It won’t happen overnight.”
Digital transformation is about more than scalability and profitability because it impacts all stakeholders. “As we progress on our digitization journey, it’s changing our relationship with each person internally and externally, including our employees, customers, carriers and suppliers,” states Jim. “It’s making our employees’ jobs easier and making our customers happier as we increase our DFM moving forward. The top 100 companies in the industry are getting larger, making it harder for us to get to that level. The relationships we have with our employees and customers are essential to our ability to grow.”
I also asked Jim if there was any pushback from employees on the new technology given the natural fear that technology replaces jobs. Jim says, “None of our employees are going away. We need them to handle the exceptions and do the one-offs that keep our customers happy. That’s the only way we can grow the way we want.”
I asked Prasad to discuss the technology needed to enable digital transformation. Prasad notes that it requires a digital platform. “But you have to get past the noise and the buzzwords,” he says. “It starts with having accurate real-time information. Where are the loads, where are the trucks at any given time?
“The second part is you have to have live connectivity with the carriers. That’s what’s most important because these are not one-off conversations. Mobile capabilities have a huge impact on this. If a digital platform doesn’t have real-time information and live connectivity, it is just noise and adds to the problem.”
What Does the Future Hold?
I asked Jim and Prasad what the future of digital transformation looks like for Becker Logistics and others. Jim discussed a wide range of opportunities, including predictive analytics and acquisition integration, while Prasad discussed the widening gap between technology adopters and laggards. Jim also shared some lessons learned from their transformation journey to date. Therefore, I encourage you to watch the full episode for all of their insights and advice on those topics and more. Then post a comment and share your perspective!