Insider Q&A: Improving Freight Transportation: Anticipate scenarios, mitigate disruption, think long-term

Transportation Insight (TI) & Nolan Transportation Group (NTG)

Mark Vale, CFO, Transportation Insight & NTG

Managing freight has always been a complex dance, but it’s starting to feel more like a high-wire act in today’s unpredictable business climate. From changing consumer demands to the e-commerce boom to the ongoing supply chain disruptions, the goal of this ever-evolving transportation maze is still focused on one primary goal: getting the right shipments to the right customers at the right time.

These realities aren’t lost on Transportation Insight (TI), a multimodal freight and logistics expert that’s spent the last two decades honing its approach, expanding its offerings and working with a wider swath of shippers and Nolan Transportation Group (NTG), one of the largest freight brokers in the U.S.

The combined company currently serves more than 14,000 shippers and over 80,000 carriers through its proprietary Beon™ Digital Logistics Platform—a single point of access to their mode-agnostic network and services from port to porch™.

The TI and NTG services and digital product portfolio through the Beon Digital Logistics Platform spans across North America, offering domestic freight and parcel transportation solutions, warehousing, data intelligence and supply chain consulting.

To learn more about the current freight environment, emerging challenges and how TI and NTG helps businesses address these challenges, we spoke with Mark Vale, CFO. He shares his insights on the current and future freight markets and shares a peek into future plans.

Q: From your vantage point, can you describe the freight transportation and logistics environment that shippers are dealing with right now?

A: If you're in the logistics space, it's been a roller coaster ride. We went through the pandemic and ensured that we delivered during that period and kept the economy moving. Then there was a fairly severe freight recession, which shippers and carriers also had to navigate. Now we’re seeing a normalization of the cycle as we start to move from a freight-recession environment into one that’s much more normalized.

We use our Beon Spot Curve internal metric to track freight trends and we're starting to see signs of a more positive, inflationary-type environment. The demand/supply equation is kind of balancing out. We expect to see some recovery in the second quarter,  with continued improvement in the 2nd half of the year.

Q: What challenges have these trends created for today’s shippers?

A: Shippers are working to balance the demand of end-consumers by ensuring that they have enough available inventory on-hand to be able to fulfill orders. Consumer confidence has been slowly improving compared to late last year. In response, shippers should start thinking about how they’re going to manage as demand starts to improve and order volumes increase. That means ensuring that they’re dealing with transportation providers that have enough capacity, and can meet the shippers’ nationwide freight and logistics needs.

This is also a good time to reassess any current freight contracts and lock-in contracts as the freight cycle changes take place. For example, an importer that has freight coming in from overseas should have enough flexibility in terms of port arrivals.

That company also needs a domestic provider that’s flexible enough to deal with the continued supply chain disruption happening in places like the Red Sea. The key to dealing with these and other challenges is to work with a transportation or logistics provider that can help you anticipate scenarios and ultimately mitigate the disruption.

Q: How are Transportation Insight and Nolan Transportation Group (NTG) positioned to help meet those growing shipper challenges, and what is your focus for 2024?

A: Nolan Transportation Group is a domestic U.S. brokerage business and focused on small to midsized business customers and the spot market. Transportation Insight is a managed transportation business that offers both parcel and domestic transportation management.

We structured our business like this because the dynamics, depending on where you are in the freight cycle, are very beneficial. NTG’s brokerage business is more cyclical and at times transaction focused, whereas the TI business is more contractual and has less changes with market volatility.

We’re currently focused on three specific initiatives to support our hybrid-digital approach. First, we want to make sure we're positioned well as the market begins to grow and expand. We've been investing in our sales force and recently hired 120 new brokers to make sure that we're well positioned as the market becomes more inflationary.

Over the last three years, we’ve also been optimizing our operations and making investments in technology, including our proprietary Beon Digital Logistics Platform, which also includes our internal Beon Operating System(BOS). We’re always looking for ways to become more efficient and provide customers with a better value proposition. Finally, we’ve been focusing on our corporate culture and reinforcing that culture from the team perspective and across our two core brands (TI and NTG).

Q: What are your key focus areas for growth this year and into 2025?

A: For Transportation Insight, we're focused on continuing to bring on new businesses. While we work with some enterprise business and household names and have helped grow SMB businesses over the years, our sweet spot is the midmarket to large business where we typically can deliver the most value.

We’re focused on how we help customers transition through the freight cycle and plan for the long term. We utilize internal tools to help ensure we are gathering data on customer sentiment, monitoring performance through our tools like Beon Insight and Beon Commerce, so that we have an accurate and holistic view of the customer at any given time. When customers come to us to and talk about the end of their contract cycle, we've generally seen 97% renewal in those businesses.

On the NTG brokerage side, we’re helping customers think through scenarios like, what happens if you try and lock rates? What's going to happen as volume picks up? What can we do to help you save money on certain lanes? And, how can we work with our carriers to give customers even more value as we move forward?

We’ve also introduced more self-serve options like Beon Shipper, so shippers can get rates back instantly, and Beon Carrier for the carriers that we work with to easily find NTG loads. Looking at this from two lenses of how do we make our people more productive, but also how do we make it easy for shippers and carriers to do business with us.

We also have a significant less than truckload (LTL) and drayage portfolio that we’ve grown over the past several years. Our goal is to provide this “port to porch solution” to our customers, and that we can continue to accommodate a wide variety of different freight requirements.

Q: Transportation Insight and NTG have made a number of acquisitions over the years, is that a continued focus for your business?

A: First and foremost, we are investing back into the business through technology and people to really bolster our hybrid-digital approach. Our primary use of capital this year and in the two years prior supports both technology initiatives and developing our people.

We've done a few acquisitions over the last few years, always with the goal of gaining additional capabilities—be it a new mode or a new technology platform. We also look at acquisitions that may give us access to new regions. We're disciplined allocators of capital, and we’re diligent in terms of ensuring that we get very good returns out of those acquisitions.

Q: In terms of the transportation market in total, what are the biggest opportunities for shippers?

A: The main thing that shippers need to prioritize from a transportation point of view is thinking long-term. There’s a desire to capitalize immediately on the cost savings you can achieve in this down market compared to years prior. But now is the time to get your carrier mix right, look at your supply chain technology stack, look at your distribution network, so that when the pendulum does swing, you have locked in rates and future proofed your supply chain.

The other piece as with any partnership is sharing long-term plans and goals with your transportation logistics provider and develop plans for adapting to the highs and lows in your company’s natural business cycle. Make sure you work with a company that has agile and nimble integrations and technology, such as a transportation management system (TMS) and reporting, so they can fit into your technology ecosystem future state. And lastly, it really is a better together mentality, don’t try to do it on your own.

Q: Leading indicators are pointing to a rebound in the freight market later this year. What are your thoughts on this and where do you see the market headed over the next 6-12 months?

A: Based on the cycles, the freight market will rebound. But the question is, when exactly is that going to happen? We expect it to start to improve during the second quarter of the year. Other companies and some industry experts think it may be a little later, but we think the uptick will happen during the second quarter.

There are several reasons for this prediction. For starters, the produce season is coming up, and that’s always a good indicator of the market trends over the coming 3 to 4 months. Some of the national weather events in January and February slowed the expected growth. We expect things to swing in a different direction now that the winter months are nearly behind us.

As a company, we’re focused on what we can control. Unfortunately, you can’t control the market; you just have to make sure you're controlling the internal processes, driving productivity, make sure you’re bringing value to your customers, looking for new opportunities and then acting accordingly as the market changes happen.

Q: What key takeaways or advice would you share with shippers that want to improve their freight management operations?

A: Data always helps shippers make better decisions. Manage your supply chains closely and daily, and look at the data to determine any trends and opportunities, because they are out there. We see it every day when our Parcel Strategy team engages with a parcel shipper. By staying connected from the point of raw material straight through to your end customers, you can determine potential near-term and long-term opportunities. If and when those communications break down, you may wind up missing something important.

Another area would be Artificial Intelligence (AI). We’ve have been hearing about AI for the past decade, but the proliferation of data along with some more out of the box AI solutions are making AI more approachable for many businesses now. This is a game change for many businesses. We’ve seen this firsthand not only with machine learning, but the deployment of generative AI solutions for our internal teams.

Finally, we encourage all shippers to stay very close to their own customers and their logistics providers. Having those tried-and-true reliable partners who will work with you, becomes invaluable during market swings. Working with companies like TI and NTG really can help frame up what’s happening in the market and help shippers not only manage what’s in front of them, but also prepare for what’s coming next.