Over the past year, transportation and supply chain managers have been scrambling to find capacity to meet high consumer demand and service expectations. Yet, the recent public focus on supply chain disruptions due to the COVID19 pandemic only highlights what is already known to supply chain professionals: the industry is plagued by inefficiencies, volatility, and price fluctuations.
There are still lots of parts in this industry that are not driven by technology, but by archaic, highly manual processes. A lot of energy, a lot of effort is invested into firefighting — dealing with problems as they arise rather than planning strategically to avoid them. For most large logistics organizations, freight transportation planning provides a significant source of uncertainty both in terms of service reliability to their customers and the associated cost.
The entire B2B transport industry is built around transactional competition, which leads to a lack of coordination and consequently inefficiencies and empty miles. These are the two words no logistics professional likes to hear: empty miles. Empty miles are a waste of fuel, time, and money causing supply chains to be sluggish and inefficient.
Although carriers are more directly affected by empty miles causing a serious drop in revenue and increased costs, shippers also stand to lose from too many empty miles.
“When there is a downturn, thousands of small carriers go bankrupt. When there is an upturn, shippers blow their freight budget by double-digit percentages. That’s the cost of volatility, and it happens repeatedly.” – Stefan Friederichs, Co-Founder & Head of Engineering at Leaf
Our partner Leaf Logistics is a fast-paced startup focused on transforming transportation logistics through new digital solutions. Leaf takes a network-first approach to address freight transportation planning, supported by Leaf Flex forward contracts and the Leaf Adapt platform. Leaf products guide shippers, carriers, and logistics service providers to make transportation decisions that bring cost efficiencies for shippers, while enabling carriers to keep their trucks loaded and efficiently planned so their drivers can earn more.
Leaf’s mission is to help move the industry from a transactional “how do I cover my next load” mindset to strategic, forward-looking multi-party collaboration. Based on data analytics and machine learning, Leaf identifies synergies between different shippers’ and carriers’ networks so that carriers achieve higher utilization and margin and shippers benefit from improved service levels and lower costs.
HTEC partnered with Leaf Logistics from the very start of this journey to help them realize their vision. Together, they are building a technology layer which analyzes demand streams of shippers, identifies optimal network coordination opportunities for both shippers and carriers, and helps execute and settle contracts entered through the platform.
On the one hand, this allows shippers to identify, contract, and adjust plannable and predictable flows for up to a year in advance. On the other hand, this allows Leaf to identify and coordinate network moves between shippers such as round trips, which significantly reduce empty miles — a persistent challenge American freight transportation and logistics companies continue to face.
Our team is committed to helping Leaf build the platform to plan and coordinate B2B transportation services. HTEC has been working on both the frontend and the backend of the platform, supporting the creation of the infrastructure, the data and logic layer, as well as the Leaf products such as Leaf Flex and Adapt.
"Knowing the fact that anomalies in routes and empty miles are one of the biggest challenges for logistics today, I can’t express how excited I am to partner with Leaf Logistics and have a chance to work on solutions that will improve entire supply chains. Together we can provide tremendous value in creating a resilient supply chain from both technical and industry domain.” Dejan Pokrajac, Senior Engineering And Delivery Manager at HTEC Group
Through the Leaf platform, shippers can now plan and adapt their transportation needs to an ever-changing environment.The network-wide collaboration results in improved service levels, reduced costs, and lower emissions, important for meeting corporate sustainability goals.
Carriers gain access to high quality freight, organized into efficient plans and routes executed over weeks or months at a time, increasing efficiency and utilization. On top of this, Leaf Flex contracts allow them to plan and grow their revenues with predictability. Last but not least, drivers’ satisfaction increases dramatically as they are offered repeatable schedules for weeks or months at a time.
Overall, digital forwarding of contracts will help both sides ensure financial predictability and improve operational reliability. This will further enable them to focus on the strategy and execution, increase financial & operational reliability, reduce costs, optimize processes and improve risk management.
“B2B transportation is a trillion dollar market in the US alone, and with more than ⅓ of trucks running empty it is far from efficient. We estimate that the industry wastes $200B+ each year due to a lack of coordination, and Leaf is building the infrastructure which allows this coordination to happen on a systematic basis.” — Stefan Friederichs, Co-Founder & Head of Engineering at Leaf
To learn more about why building antifragility systems has become a critical success factor in transportation and logistics, and how businesses can grab opportunities outside their mini-network to find efficiency, increase reliability and lower costs listen to our Fast Forward interview with Anshu Prasad, the CEO and Co-Founder of Leaf Logistics.
“From my perspective, what makes HTEC Group stand out are the people. Apart from the technical skill sets, the team is really motivated and committed to making Leaf successful. We are looking for developers with an open mindset, who are passionate about learning and adjusting to the rapidly changing needs we have as a fast-paced startup, and with its people HTEC has proven to be a reliable partner to achieve big goals.” — Stefan Friederichs, Co-Founder & Head of Engineering at Leaf