We built a freight managament environment on our own terms. Interview with Droader
As part of our series of interviews with companies from the TSL industry, we discuss the situation in the transport market, strategies for dealing with challenges and approaches to issues related to safety.
This time we talk to Jakub Kaczmarek, General Director of the Droader transport and forwarding company. From the conversation you will learn what processes are worth automating, how to segment carriers according to the loads they are entrusted with, and how to ensure transport security with our carrier network- and capacity managment solution – the PFX.
Mr. Kaczmarek, you have been on the market for almost 10 years, and last year you expanded your own fleet by almost 50 trucks. What is required to thrive in such a dynamic market?
Jakub Kaczmarek: Awareness is the key. Awareness of duties and rights in transport and forwarding. This applies to all employees – forwarders, dispatchers, drivers, but also administration and management. Ignorance of the law can seriously harm a company and lead to trouble. On the other hand, knowledge in this area helps to avoid many problems or allows you to solve them quickly.
That is why we take special care of the flow of information in the company and regularly conduct training in transport and freight forwarding related law and the traps lurking for our co-workers. As an example of such necessary knowledge, I will mention the SDR rate, which is used to calculate the carrier’s liability for the transported loads. This is such an essential element, and unfortunately few people in the industry know much about it.
What do you think is the biggest problem in the industry?
In my opinion, it is irresponsible to promise that companies will always deliver loads on time. This is simply unrealistic. We often have thousands of kilometers to cover, which means hundreds of situations can occur on the road or during loading and unloading – and not all of them can be predicted.
That’s why at Droader we try to ensure that the vehicle reaches its destination as quickly as possible, and in the event of an emergency, we present our clients with a number of possible solutions. IT tools and a modern fleet help us in this – our oldest vehicles are only 3 years old.
Another example is a lack of regulations regarding waiting time for loading and unloading a vehicle. Many companies abuse this legal loophole by stopping vehicles for several days, avoiding subsequent compensation. As a company that deals with both transport and freight forwarding, we have a broader perspective. It allows us to understand the needs of both parties and better adapt to the requirements of our customers and carriers.
In addition to the unforeseen situations that you have to face almost every day, what is the biggest challenge for freight forwarders specifically?
The rising costs of transport, which are not followed by increases in freight prices, are certainly a huge challenge. Rising prices of tolls, fleet and employee salaries make it increasingly difficult to maintain profitability.
Being a forwarding company and having our own fleet, we are theoretically more resistant to market fluctuations. Nevertheless, in the event of rising toll rates, our losses are doubled.
The second challenge is transport safety. The number of cases of goods fraud increases every year, and fraudsters come up with more and more clever ways of stealing. Protecting against this is one of the most important jobs of a forwarder.
Times are tough, but I believe that there will always be a place for good companies in the market. We do not hope for an improvement in the economic situation, but we try to improve what we can influence and build lasting relationships with employees, customers and hauliers.
This year, in addition to further expanding our own fleet, we plan to further improve and automate internal processes in the company, as well as further develop the competences of our employees. We see this as our key to success.
You mentioned IT tools earlier. What other ways do you use to improve your work?
We try to keep up with the times and use modern tools, but we certainly do not try to be pioneers of innovation. We definitely prefer to introduce proven solutions.
At the moment, our most significant process automation is happening in the TMS itself. We try to integrate all processes into it, starting from receiving the order, through sending it to the carrier or our driver, tracking the status on the route, to settling the documentation. Almost 100% of our carriers send the necessary documents and invoices directly to our TMS. This saves us a lot of time and paper. Our TMS is also integrated with the freight exchange and the Trans.eu Private Exchange.
We are currently working on ensuring that carriers automatically receive information that their documents have been registered, the payment deadline has been set and the payment has been made. Our goal is to fully automate all processes for our subcontractors and vehicles
What role does the Trans.eu Private Exchange play in your processes?
70-80% of our work is based on orders from regular customers and cooperation with regular carriers – and this is what we use the Private Exchange for. The remaining 20-30% are spot transports, which we mostly sell on the freight exchange. We try to avoid binding, several-year contracts, because the current times are not very certain.
At the moment, we use three freight exchanges, which allow us to match the transported goods to the carriers. These are:
– Droader VIP Marketplace Private Exchange for the highest value loads
– Droader Private Exchange for medium value or least valuable loads that are not time-critical
– A public freight exchange for handling the least valuable or time-critical cargo
Similarly, we have divided our carriers into segments, classifying them according to the value and ease of sale of the goods that need to be transported:
– Segment 1: highest value and marketability of goods, e.g. electronics, solar panels
– Segment 2: average value and marketability of goods, e.g. automotive
– Segment 3: low value and marketability, e.g. agricultural products.
I would also add that we are publishing more and more offers on our private exchanges every quarter. For example, comparing Q3 to Q4, the increase was 17%.
How do you choose the carriers you invite to your private exchanges?
Cooperation with trusted and thoroughly verified carriers is a fundamental thing for us. This approach significantly contributes to improving the safety of our transports. We have our own tools for verifying carriers, and such verification is based on a multi-level checklist. Some of the criteria include:
– thorough verification of documents held
– checking the policy coverage
– monitoring changes in the company’s history
– personal verification of the carrier and their fleet for the most important loads.
The verification process in our company is very extensive – it consists of at least 12 stages – and is individually adapted to the needs of the transported load.
In total, we have added nearly 2,500 carriers to our private exchanges, i.e. approximately 20% of the most trusted carriers in our base. Before we invited them, we re-verified them – and assigned them to the appropriate segment. Almost 100% of the invited companies accepted our invitations.
The advantage of the Private Exchange is that we have previously verified contractors gathered there. If we publish an offer on it, we do not have to worry about verification anymore, which streamlines the entire process. Another advantage is that we create the transport environment on our own terms. For example, on the Private Exchange, we can delete a carrier that no longer meets our standards, which is impossible on the public exchange.
Our carriers also appreciate the opportunity to be listed on our Private Exchange. They are aware that we offer more favorable rates and better conditions there than on the public exchange. They have clearly defined rules, for example regarding parking or cancelation of freight. They know what to expect and what to count on. That is why they are happy to use it in the first place.
