Supply chain management involves the transportation of freight between locations, and load matching is a small but critical aspect that drives supply chain efficiency. Load matching can be understood as the pairing of freight with the most suitable transportation carriers. If done right, load matching means better resource optimization, cost reduction, streamlined operations, and ultimately, happy customers and businesses. Some of the factors that load matching depends on include:
1. Load Characteristics:
Shipments have specific requirements such as size, weight, fragility, temperature sensitivity, hazardous classification, or other special handling needs. Load matching assigns carriers with the appropriate equipment and expertise to handle the specific load. This ensures efficient and safe transportation.
2. Carrier Requirements:
Carriers also have their own preferences and limitations regarding the load they can carry such as geographic coverage, equipment availability, capacity, specialized handling capabilities, and contractual obligations. Load matching aligns carrier preferences with suitable loads for efficient transportation.
3. Delivery Constraints:
Load matching considers time-sensitive deliveries, special delivery locations with access restrictions, or specialized handling requirements. For instance, 41% of global shoppers expect same-day delivery for their purchases. Load matching assigns the most suitable carrier to meet the unique demands of each delivery.
4. Cost Considerations:
A significant financial and environmental cost for shippers and carriers hides as empty miles. Thirty-five percent of trucks travel empty in the U.S., accounting for 61 billion empty miles and 87 million metric tons of unnecessary annual emissions. And according to the National Private Truck Council, 28% of a private fleet’s miles qualify as deadhead. Load matching takes into account cost considerations such as carrier rates, fuel expenses, toll charges, and other operational costs. It strives to find the most cost-effective carrier that meets the load requirements and delivery constraints, contributing to overall cost reduction and improved profitability.
Challenges in load matching
Load matching can become time-consuming and complex from challenges that arise due to a lack of standardization. Let us examine two major challenges:
1. Fragmented Markets:
The logistics industry is brimming with carriers and businesses that need to avail of their services, there is a supply-demand mismatch as it is heavily fragmented. The decentralized logistics industry consists of numerous small-scale carriers, brokers, and shippers operating independently. In the absence of a centralized marketplace that facilitates seamless load matching, carriers and shippers rely on personal networks, referrals, or manual searches to find suitable matches for loads or transportation needs. This leads to limited visibility, difficulty in finding available capacity, and time-consuming negotiations.
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2. Inefficient Communication:
Load matching requires effective coordination between shippers, carriers, brokers and stakeholders. Inefficient communication hinders effective coordination and has a negative impact on load-matching efficiency. For instance, the lack of accurate information about available loads, truck capacity, delivery requirements, and other details leads to miscommunications, delays, and disruptions. There is also a greater chance of errors, delays, and inefficiencies when the communication is manual, as the number of load assignments and stakeholders involved grows.
Implementing standardized systems to overcome the challenges of fragmented markets and inefficient communication can reduce the time and effort required for effective load matching.
Value of load matching in the last mile:
In 2022, last-mile delivery witnessed a significant increase in total marginal costs, with a rise of 21.3% compared to 2021, reaching $2.251 per mile. Fuel costs played a major role in driving this surge, soaring by 53.7%, with other expense categories also experiencing double-digit growth. Load matching can be a game changer in optimizing logistics efficiency in the last mile, providing several benefits:
1. Resource Optimization:
When the right load is allocated to the most suitable carrier, carrier capacity and resources like drivers and vehicles are fully utilized, and empty miles traveled are reduced.
2. Faster Deliveries:
When available loads are connected with the most suitable carrier in terms of delivery routes, the transit time per delivery is minimized and the delivery speed improves.
3. Cost Reduction:
Load matching enables shippers to maximize payload capacity and minimize the number of trips required. Better load consolidation not only minimizes empty miles but also optimizes carrier delivery routes and fuel consumption so that overall transportation costs are brought down.
4. Enhanced Customer Satisfaction:
Load matching allows businesses to curate and customize deliveries efficiently, meeting the growing demands for fast, reliable, and personalized last-mile delivery options. This strengthens customer loyalty and enhances brand reputation.
Streamlining load matching in the last mile:
We have seen how load matching can significantly uplift last-mile operations. Let us explore now how leveraging technology-driven solutions for load matching, via platforms such as Locus’ Dispatch Management Platform (DMP), can elevate the benefits of load matching to an exceptional level.
1. Efficient Load Assignments:
We know how matching the right load with the right carrier enhances operational efficiency and reduces costs, employing automated load matching techniques notches it up further. Locus DMP provides automated matching algorithms that intelligently assign loads based on factors such as load characteristics, carrier requirements and delivery constraints. Eliminating manual intervention saves time and enhances resource utilization.
2. Intelligent Route Optimization:
Locus’ DMP employs intelligent route optimization techniques that consider load characteristics and delivery constraints to generate optimal routes for carriers. By considering load characteristics, the platform determines the most suitable routes and modes of transportation that can accommodate the load effectively. The platform also factors in delivery constraints and ensures deliveries are scheduled within the specified time windows.
3. Real-time Visibility and Communication:
Real-time tracking and monitoring ensure loads stay on track and can be matched with appropriate carriers or alternative options if needed. Seamless communication between stakeholders allows for coordination, adjustments and proactive decision-making in response to unexpected events or changes in delivery requirements. Locus’ DMP enables this level of visibility and communication which enhances load matching by ensuring that carriers have all the necessary information to handle the load effectively and make informed decisions.
4. Enhanced Performance Monitoring and Optimization:
Locus’ Dispatch Management Platform (DMP) offers advanced performance analytics for accurate load assignment, carrier performance, on-time deliveries, and load utilization. These analytics enable real-time monitoring, empowering businesses to track key metrics and identify areas for improvement. With performance reports generated by Locus’ DMP, optimizing load matching processes and enhancing operational efficiency becomes effortless. Moreover, the platform seamlessly integrates with other systems, facilitating smooth data flow and information sharing across the entire supply chain for end-to-end visibility.
5. Transporter Management:
Introducing a Transporter Management System (TMS) is key to improving load matching efficiency. Integrated with platforms like Locus’ DMP, a TMS optimizes transporter usage based on their capacity, reach, availability, and reliability. This not only enhances load assignments but also provides comprehensive visibility of last-mile deliveries. Plus, TMS analytics on transporter performance can be used to further fine-tune the load matching process, resulting in enhanced operational efficiency.
Locus DMP empowers logistics providers with data-driven insights which help optimize load assignments based on performance history, customer preferences, carrier capabilities, and other factors, resulting in improved load-matching efficiency. By adopting technology-driven solutions and standardized systems, logistics providers can enhance load-matching efficiency in the last mile, leading to optimized logistics operations and improved customer satisfaction.
Embrace Locus DMP’s data-driven insights and technology-driven solutions today and experience the power of efficient load assignment in the last mile.
Sources:
https://www.statista.com/statistics/1279369/delivery-time-expectation-online-shoppers-worldwide/
https://ec.europa.eu/eurostat/web/products-eurostat-news/-/ddn-20211210-1
https://truckingresearch.org/2023/06/atris-newest-operational-costs-research-details-spikes-in-equipment-wage-and-total-costs-in-trucking/