Technology often hogs the spotlight in today’s logistics industry, but anyone who has been in the industry for a while understands that relationships — with shippers, carriers, employees and technology providers — are critical as well. Has that changed in the age of digital transformation? Can technology actually play a role in building relationships? Should this be part of the value proposition and business case today? Those are the main questions I discussed with Mark Ford, Chief Operating Officer at BlueGrace Logistics, and Prasad Gollapalli, Founder and CEO of Trucker Tools, during a recent episode of Talking Logistics.
We often say that logistics is a people business, a relationship business. Is that still the case despite all of the technology and automation logistics service providers are adopting? Why are relationships still important?
Mark says, “Absolutely, relationships are still important, but it has changed. You have to marry relationships with technology to get the efficiencies that customers and carriers are demanding. Maintaining good relationships with carriers also helps ensure capacity as long as you’re willing to pay a fair price. What carriers are looking for in a relationship is someone who can help them keep their trucks on the roads with consistent freight and keep their drivers busy.”
Mark adds that marrying relationships and technology is also important with your employees to make their jobs more enjoyable and efficient. That keeps them around and helps to maintain the relationships they have developed with customers and carriers.
Because technology providers are critical in helping logistics providers transition to the digital age, relationships between vendors and clients are more important than ever. Prasad notes that these relationships used to be more transactional and arms-length. Now, he says, “These relationships must be a partnership where the vendor understands the 3PL’s business and where they want to be in two years so they can align their product roadmap accordingly. It’s really a collaborative effort.”
Using Technology to Build Relationships
I asked Mark to expand upon his earlier comments concerning the interplay of technology and people in building relationships. Marks explains that 3PLs rely on data from carriers and customers to execute their business. Technology enables them to collect and disseminate the information quickly and efficiently to both parties without having to make, for example, bothersome phone calls to track loads.
Mark also points out that people today, especially those that have grown up with technology, prefer to interact electronically with customers and transportation providers. “Whether it’s booking a load, tracking it, transmitting paperwork, or getting paid, they want to engage electronically with customers and carriers and minimize human interactions. Most of our technology is designed around this focus.”
Basically, technology helps to eliminate the friction and latency of information flow between carriers, shippers and 3PLs through automation so they can manage by exception. These factors help build better relationships.
Building Relationships as a Value Proposition
Is relationship building becoming part of the value proposition (the business case) for adopting technology? Prasad says that prospective customers today are asking completely different questions than in the past. “The questions they are asking are less about where our technology is today but where are you going next? What’s on your roadmap? The other question they often ask is how much influence do we have on your roadmap?
“It is night and day from where we were 10 years ago. This is the change we have been looking for. Our customers are helping us create our products block by block to solve their problems. The vendors and brokers who have this mindset are the ones moving forward.”
Lessons Learned and the Future
The last part of my discussion with Mark and Prasad focused on the lessons they have learned in their digital transformation journey and what they are planning for the future. I don’t have space here to share their insights on this, but I encourage you to watch the full episode for Mark’s comments on differentiation and Prasad’s comments on “beyond technology.” After watching, post a comment and share your perspective on this topic.