LoadExpress

Deal Direct. No Brokers.

After nearly two years of hard work, LoadExpress has finally launched two weeks ago, at the Mid-America Truck Show.  With the great reception we got (more on that in a later post), we are ever more confident we have built a unique product and business model that provide great benefits to both shippers and carriers, owner operators and drivers. We have something important to contribute to the logistics industry, starting with the truck freight market, and we are in the right place at the right time.

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What do we see, and what are our operating principles based on our vision?

  1. The U.S. trucking industry is one of the largest and most critical industries in the U.S.  It is also one of the most technologically backward.  Much of the industry is run with brokers and lots of people using phones, faxes, spreadsheets, and home grown “systems” to conduct business.  Today’s logistics process is universally recognized by everyone involved as highly inefficient, frustrating and therefore unnecessarily costly.  There’s got to be a better way.

    LoadExpress exists to provide that better way.

    We’re using proven web-based technologies that transformed many other industries such as travel, e-commerce, real estate and countless other services. We’re taking that technology and applying it to the logistics industry.  Through automation and eliminating the middlemen and all the inefficiencies that come with them, carriers will make more money, shippers will lower their costs, and both will enjoy higher productivity and customer satisfaction.

  2. Studies and surveys point to these elements as the key components of technology needed by the logistics industry: Internet, open standards, direct models and data, data and data.  Our web platform and mobile app are designed from the ground up with those elements in mind.
  3. The logistics industry is highly fragmented and intensely competitive with margin pressures on both shippers and carriers.  The 10-25% margins charged by brokers and the highly inefficient, nearly manual process in the daily operations of logistics represent a huge opportunity for improvement. LoadExpress’ mission is to unlock billions of dollars in profits and lower costs for the logistics industry, starting with the $250 billion commercial truck freight market in the U.S.
  4. Finally, this is critically important: we play for the long haul.  What does that mean? We are veterans in the enterprise software, startup and navigation industries.  We are very skeptical of hype and the latest fads.  So is the logistics industry. We know the logistics industry is big, tough, and takes a long-term approach to win, through hard work and providing real solutions that work and generate real benefits.  It’s a very complicated business to get right.  Our customers don’t tend to read the Silicon Valley press or care about the self-claimed next disruptive technology. There already have been a handful of startups in our space using “Uber for trucking” and Silicon Valley money/mindset which have become roadkill or the severely wounded.  We will not do that.  We play for the long haul.

Thanks for reading. Stay tuned for our saga into the digitization of the logistics industry.

 

Any successful new product must provide enough benefits that overcome the switching cost of using that product.  The “hard dollar” benefits our platform provides are significant, but using it requires a shift in attitude and work habits, as is the case in many business applications.  Namely, carriers and shippers need to adopt a “do-it-yourself (DIY)” mindset to enjoy an automated, direct-dealing, auction-based marketplace, vs. the current state of “yell at the broker and he’ll take care of it.”  The current process, with all its dysfunctions, extra costs and complaints, is what most players in the freight/logistics business know and grown accustomed to.  So it’s our job to provide the user-friendly path to switch to a different and much more efficient workflow and provide the significant incentives to change.

So let’s talk about those benefits.  For shippers, LoadExpress provides two major benefits specific to them:

  1. Cut freight spend. This is achieved primarily through getting bids directly from carriers, and not brokered rates from brokers, which could contain margins anywhere from 10-25%+.  Smaller shippers tend to get gouged due to their low purchasing power; 40% (margin) loads are not unheard of.  And brokers control that margin and change it per load depending on supply/demand, equipment type, type of load, how desperate the carrier/shipper is etc.  In other words, the broker maximizes his profits.

In contrast, LoadExpress just charges a flat transaction fee for each shipment through the marketplace.  It would typically be lower than broker commissions.  We do not gouge, take advantage of a user’s “weak” position with surge pricing.  This is why LoadExpress will save its customers significant money by both lower freight rates as well as our usage fees.

2. Reduced Shipment “Give-Backs” from Brokers. A major complaint from shippers is that brokers often “give back” a shipment after getting it to fulfill, because they’ve found some better deal or couldn’t get it covered, perhaps by trying to squeeze the carrier too much on the rate.  This causes the shipper to scramble frantically to find another party to cover the load, sometimes within couple hours of pickup.

With LoadExpress, carriers bid directly for a shipment.  Most truckers are honest, hard working people who want and deserve fair pay.  When they bid, they are signalling the price they are willing to accept.  By eliminating the broker in the middle arbitraging the deal, there is less likelihood of give backs.  If a carrier is abusing the system, shippers can rate them poorly in our rating system and warn others to ensure the quality of our users.

For owners operators and carriers, the benefits are equally large:

  1. Make More Money. By setting their own rates carriers make more money. On LoadExpress, carriers get paid the rate they bid for when it’s accepted by the shipper.
  2. Proactive Load Matching. Using us as another, totally FREE marketing channel, carriers can set their load profile for any time period and get an active alert of a shipment that matches their needs and bid for it.  This enables our users to go after as many customers/ loads as they want, all for free.
  3. Reliable and Fast Payments. This is the lifeblood of carriers.  Brokers are       notorious for playing with carriers’ pay.  Our motto to carriers is very simple: you did your job, we pay you what you earned.  LoadExpress pays carriers their full invoice amount on any completed delivery with proof of delivery within 24 hours with ExpressPay (money code), and 2-3 days via ACH.  No processing fees, holdbacks, or hassles; just hard-earned cash. Fuel advance of 50% of the invoice is available for qualified carriers.  Carriers do not need factors by using LoadExpress.

We provide two major benefits shared by both parties:

  1. Reduce Aggravations of Managing Logistics.  Through our comprehensive automation, we cut out a lot of the daily aggravations of running freight operations, a scene straight out of the 1980s.  Everywhere I go, the #1 feature both sides go nuts over is the ability to track the shipment 24/7 via GPS. This is 2017. I was fascinated by GPS when I first saw it depicted at the end of Dr. No, when James Bond inserted a tracker in the tailpipe of the car he’s abducted in, and thus saved himself and the world 10 minutes later. That was 1962.  We simplify your life.

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2. Platform for Managing Spot Markets.  We consolidate the above desk into one web platform with which you can manage your freight operations, especially your spot market needs.  Instead of a hodge podge of paper, faxes, spreadsheets, load tenders, phones, and lots of yelling, you have one place to transact and manage freight.

In summary, LoadExpress provides enough benefits to both sides that can’t be ignored.  We will use our product, friendly customer service and sales staff to convert our users to the new way to move freight, one at a time.

The digitization of the logistics industry is in full swing, yet just beginning. Billions of dollars have been poured into various segments across the globe.  Our space is so new that there is not even an agreement on what to call it, and there are various products, pricing plans and business models offered by our competitors.  Digital load matching (DLM) comes close so we will use it for convenience sake.  Surveying the field, we believe we are different–and superior–in three major areas:

  1. Auction. The most cited problem we hear is that brokers play with margins to maximize their profits, which is what a rational business should do.  Most of the other startups or services from established players are effectively glorified load boards and online brokers, or they provide some “quick quote” using pricing databases.  We eliminate all that.  Carriers and shippers bid and negotiate directly; we don’t get involved at all.  This is the most efficient and TRANSPARENT pricing mechanism, and solves the biggest problem.
  2. Pricing. We use a very simple pricing approach.  It’s totally free to join and use for carriers. We charge one transaction fee to shippers on each shipment which is added to the carrier rate. We pay carriers when they submit a clean POD approved by customer, within 24 hours or 2-3 days.  We deal with shippers on getting paid.  No subscription fees, different pricing levels, charging both sides, nickel diming stuff etc.
  3. Spot Market Management Platform.  DLM products typically have 2 feature sets.  The front end is what most people have in various degrees of completeness and usefulness: load matching, tracking, quotes/pricing, and paying carriers.  What separates LoadExpress from the rest of the pack is the back-end which allows the parties to complete a transaction on our platform without leaving it and dealing offline in the traditional way. Things like exception handling, of accessorials, detentions, lumpers, dispute resolution etc.  We obviously can’t automate everything and take the human element out of it completely, but we try to do what’s practical.

So our definition of DLM is much broader, and not just a glorified load board.  The LoadExpress platform can be used by both small-medium carriers, owner operators and shippers to manage their spot freight market.

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We had a very successful launch two weeks ago at MATS in Louisville, the largest truck show in America.  Traffic was steady and at times heavy throughout the 3 days.  We received enthusiastic endorsements from hundreds of truckers.  This was a typical reaction.  Can’t get any better:

We achieved two important goals:

  1. Confirmation that our product, business model and value proposition is right on the money, and unique.  We indeed are offering a new way to move freight:
    • We are not just another glorified load board or partial app, but a web platform that a small-medium carrier/owner operator and shipper can run their truck freight operations on.
    • A pure auction model between carrier and shipper.  We don’t broker pricing or give you a quick quote based on some database. Buyer and seller deal directly, based on the supply/demand conditions of that day.
    • It’s absolutely FREE to join and use for carriers.  Shippers pay one transaction fee on a completed shipment on our marketplace.  That’s it.  No hidden charges, no small-print conditions, no nickle and diming. Many truckers could not believe it (“No fees to join?”) since they’ve been so used to the current way of doing business and load boards that charge a monthly subscription fee.
    • Since this is a trucking show, we focused on benefits to truckers, which are many.  Using LoadExpress, carriers/owner operators set their own rates–what they bid is what they get.  They can make more money by taking as many customers and loads as they want to, reducing empty miles and getting backhaul loads.  They get paid immediately once they deliver the goods and submitted a clean POD approved by the shipper.  Above all, they can take back the control of their business again. (Details in a later post.)
  2. Above all, we hit upon a nerve among the trucker community and got a visceral reaction to our offering and what it means to them.  It’s clear that there is a love/hate relationship between the typical owner operator/carrier and his brokers. We heard from many their war/horror stories about dealing with brokers.  They can be summarized as “while you feed me, I hate the many things you do to me.” (Hey, there ought to be a country western song about this! Should be a hit among truckers, and send me my royalty check when you write the song.)

We signed up a lot of truckers, and gave away 10 Omaha Steaks packages for those who signed up.  These guys love their steaks! Dave Nemo of the Dave Nemo Show on SiriusXM satellite radio paid us a visit too. A good time was had by all!

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LoadExpress

Deal Direct. No Brokers.

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