3. Increased margin per load. Carriers who book digitally have gross margins that are 1.9–2.5 times that of regular carriers. That’s right — the unit economics of digital bookings are almost twice as good as “normal” loads.
These three effects compound each other and lead to an increase of 10% or more on overall profitability.
It typically takes six to seven months to achieve results like these. With DFM, access is instant. Implementing a capacity management system and training the team on best practices typically takes 2–4 weeks. Digital bookings tend to be <1% of all loads for 2–3 months as the team executes the best practices. The hockey stick of digital booking growth typically comes at month 4–5 with digital bookings as a share of all loads doubling month over month.
quickly search and fill gaps. And they can use repeated freight to build repeatability into their schedules.
This plays out in lanes that get booked digitally. Of digital bookings, 84% are on lanes that are repeated freight (same city/state origin/destination and equipment type, but not necessarily the same customer each time). We hear from many 3PLs that “I don’t have repeating freight,” but the data does not show this. Of the 3PLs we work with, 92% have at least 50% of their monthly freight on repeating lanes, and 47% have at least 70% of their freight repeating monthly.
Repeating freight is also not the cap on how many digital bookings you can do. More than half of the carriers who book digitally will book exclusively one-off loads. Digital carriers have one other important characteristic versus regular carriers — they don’t want to talk to a carrier rep. Of carriers who book digitally, 47% book all of their freight digitally without ever needing to talk to a carrier rep, while 75% of carriers who book at least one digital load go on to book at least half of all their monthly freight digitally.
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Here are two important summary points:
1. Capacity What Does Digital Freight Look Like?
Capacity management can drive automation, but paired with DFM, they can drive end-to-end automation. Above is some data to show what digital bookings look like.
Our data shows that carriers who book digitally tend to have larger fleets. The median fleet size for carriers who book digitally is two trucks vs. one across all bookings. But when we zoom in, we see that carriers who book digitally tend to have larger fleets — six trucks at the 75th percentile (vs. two for all loads) and 70 trucks at the 90th percentile (vs. five for all loads).
Fleet dispatchers love digital booking because it quickly and effortlessly lets them build schedules. They can
management and DFM can drive critical 3PL transformation. 3PLs who focus carrier management and build intelligent systems to collect and use capacity data have more success with digital booking and automation initiatives.
2. Capacity systems fuel reutilization which creates benefits throughout the org. Once carriers go digital, that’s how they’ll continue booking, and going digital highlights why we see the 2-time margin improvements on digital freight. These carriers optimize for keeping their wheels rolling, not extracting the highest margin on every single load. And removing the carrier rep from the conversation removes the opportunity to make price concessions. The net result is dramatic margin improvements.
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