What Does A Digital Freight Broker Do?

What Does A Digital Freight Broker Do?
What Does A Digital Freight Broker Do?

From blockchain technology that optimizes the supply chain to artificial intelligence that runs warehouses, technology has progressively altered the transportation business from front to back.

Now, a simple yet effective platform is paving the way for the logistics of the future.

What is the definition of a digital freight broker?

A digital freight broker is an online “connecting broker” connecting shippers (individual businesses or shipping organizations) with truck drivers. It often connects firms and drivers fast and effectively via a mobile or online application with pre-programmed algorithms. Consider it similar to online dating, except for trucking.

This is how a typical digital freight brokerage procedure works:

A shipper needs to send a shipment, but they don’t have a long-term contract with a transportation company or a digital freight companies to pick it up.

The shipper enters information regarding the delivery into the digital freight broker’s app, such as the pick-up location, weight, number of pallets, destination, timeframe, special accommodations, and so on.

The digital freight brokerage uses an algorithm to locate local drivers who can meet those needs.

It notifies the truck driver about the package, who can subsequently accept (or decline) it depending on their availability.

Within minutes, the shipper and the driver had found each other. They accept the terms and are ready to hit the road.

The digital broker may use machine learning to help optimize routes and improve the supply chain with various technologies.

What is the role of a digital freight broker?

The digital freight broker platform is attempting to address two fundamental concerns.

Smaller businesses that require flexible shipping to compete for benefit from a digital freight network.

Many businesses do not have long-term contracts with trucking providers since it is not cost-effective. The impact of the truck driver shortage is reducing, but it is still significant. Prices for trucking companies increased considerably, and supply chain bottlenecks were severe (so extreme that many are still in effect today).

Companies with smaller or irregular shipping needs don’t have the need or budget for long-term contracts with truckers, which puts them at risk of price volatility and shipment uncertainty, especially given the effects of the shortage. If no one is available to pick up their load, it will not be picked up or shipped at a high cost.

Small and medium shippers can use digital freight brokers to get less expensive, on-demand transportation for their needs. They don’t require a contract; they enter the information, and a trucker will arrive to pick up their products. For organizations that don’t need to do regular business with a trucking company, this can save a lot of time, resources, and money.

Truckers have more options and can better manage their loads.

Return loading is one of the most pressing challenges for truck drivers, particularly those who work as independent or semi-independent contractors. They drive from LA to NYC with a full truckload of stuff, but now they must find products to transport back to LA. This wastes a lot of resources by leaving trucks empty and underused and reducing truckers’ earnings.

Drivers may use a computerized freight broker to maintain their trucks full at all times. When the driver arrives in NYC, he may match with a load bound for Chicago. He might be able to match three loads traveling to LA in Chicago. This reduces the possibility of “empty miles” and the expenditures associated with them at any point along his return journey.

Drivers also like the freedom that such a platform provides. They have the option of accepting or declining routes, and they are paid fast. This benefits truckers’ lifestyles and livelihoods, which is especially vital in recruiting additional drivers to combat the shortage.

What Are Some of the Other Advantages of Using a Digital Freight Broker?

It conserves time.

Non-digital freight broker firms performed the same thing, but they had to do it over the phone or by fax. It could take hours or days to find a match. Digital freight brokers, on the other hand, enable a significantly speedier connection—often in minutes. With such a quick digital process, there’s little chance of losing out on the best drivers in your area.

There will be less paperwork.

A reduction of paperwork is another time-saver. Many digital freight broker apps can handle all documentation, including using images for proof of delivery and signed bills of lading, through the app. There’s no need for faxing or a lot of documentation.

Routes are optimized.

The finest digital brokers use artificial intelligence and machine learning to optimize routes and forecast supply and demand. This keeps shipping costs low and demands high for truckers. Through the digital freight broker software, they get some of the work of a real dispatcher.

Price reductions

To compete in the industry, many digital freight brokers have lowered their pricing. This translates to a (short-term) cost decrease, which has benefited smaller businesses that can’t afford high spot market costs.

Plus, because everything is digital and controlled by technology, labor costs are much lower. As a result, digital brokers can keep their fees low, allowing the majority of the money to flow straight from shipper to driver.

Accessible at all times of the day and night

Because everything is done through the app, shippers and drivers can post and pick up tasks at any time. In today’s fast-paced, never-ending consumption environment, having access to information 24 hours a day, seven days a week is extremely convenient.

Enhances productivity

Overall, the transportation process is greatly streamlined thanks to booking, matching, and administration automation. The technology performs the same functions as a human freight broker, but it does so more quickly and at a lesser cost.


For freight brokerages, technology is increasingly the fundamental differentiator. Fortunately, technology is becoming more powerful and less expensive each year, making freight brokerage businesses of all sizes and budgets more competitive. Like many other organizations in the freight industry, many freight brokerages are embracing technology and adopting a “digital freight brokerage” attitude.

Over the next five years, this tendency will only accelerate. Freight brokerages who refuse to adopt modern technology will remain in the analogue world. Freight brokers who utilize these technology and business models will survive and grow in the digital freight brokerage world.

What are the most significant technologies? What methods do freight brokerages need to use as a result of these new technologies? Over the next five years, technology will drive strategy in five areas.



When it comes to technology, automation is the easiest way to digitize freight brokerages. Freight transactions generate a massive amount of data, which a digital freight brokerage must process regularly. PODs, BOLs, customer invoices, and carrier payments are just a few examples. Traditionally, brokerage staff handled the majority of these data entry and generation duties.

This tendency is rapidly changing, as artificial intelligence and machine learning capabilities have advanced to the point where most of these routine operations can now be automated. The most technologically advanced freight brokerages have already started automating what they can. This may not always imply less staff, but it does always imply higher productivity.


Brokerages must have a real-time understanding of freight markets. This freight intelligence is crucial for capturing variations in load volumes and truck capacity, impacting pricing volatility for thousands of lanes daily. Before this data became generally available, freight brokerages valued lanes using their historical data or, if it was unavailable, third-party lane rating methods. Both of these data pieces are necessary for freight pricing; however, they are backward-looking data points.

Freight brokerages now have forward-looking data that produces predicted freight rates and dynamic lane signals for thousands of freight lanes thanks to Pace Dispatching’s near real-time load volume (OTVI) and truck capacity (OTRI) data. Freight brokerages that employ the most up-to-date data will have a significant advantage over analog brokers who rely on data that is weeks old and tribal knowledge.


Internally, even the largest digital freight brokerages have trouble sharing customer and carrier data. Individual freight brokers are typically fiercely loyal to their customers and carriers. However, this results in inefficiencies that have a significant long-term cost to the P&L statement for a freight brokerage firm. Cross-sell and up-sell opportunities are frequently overlooked. Several carrier sales teams start from the ground up, finding carriers and building connections with them.

Using software and communications platforms that exchange customer and carrier information across the organization helps to drive top-line revenue with an existing customer base and helps to minimize the cost of transportation procurement.


If sharing data inside is difficult, sharing data with consumers and carriers is nearly impossible. Having an edge in freight market intelligence has always been the secret sauce of digital freight brokerages. For many analog freight brokerages, giving up some edge and pushing towards transparency can be sacrilegious.

The freight market, on the other hand, is moving in the direction of openness. Those analog freight brokerages that refuse to open their books will eventually lose customers and carriers to their digital counterparts. Customers now want their vendors to have direct linkages with them. On the other hand, smaller fleets are becoming more tech-savvy and aiming to automate procedures and increase efficiency.

Freight brokerages that invest in freight technology to give their clients and carriers better visibility into the process will be in the greatest position to assist their customers and carriers in becoming more efficient, which means higher profits for everyone. They’re transforming into a digital freight brokerage.


Freight brokers will always rely on the telephone and email to communicate with their customers and carriers. On the other hand, technology is now enabling new ways to stay in touch with customers and carriers. Customer relationship management (CRM) software has evolved from simple client databases to a full range of customer engagement offerings.

For years, organizations that sell to consumers (B2C) have used customer interaction tools to construct an altogether new sales and marketing playbook. Companies that sell to other businesses (B2B) have been sluggish to adopt this new strategy.

Freight brokerages who research and apply this technology and B2C sales and marketing tactics will have a significant advantage versus analog brokers that are content with doing business as usual.

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