At the Future of Supply Chain event in Atlanta, Zach Jecklin, chief information officer at Echo Global Logistics, spoke with FreightWaves about Echo’s dynamic pairing of people and technology and how it’s reshaping the industry.
Echo Global Logistics was founded in 2005 with a focus on creating its own proprietary transportation management system, which Jecklin notes is a key differentiator from other companies that use off-the-shelf technologies. As an added advantage, having its own tech stack enables the 3PL to expand and grow across nearly all modes of transportation.
“[Echo’s TMS] handles truckload, LTL, partials, intermodal, expedited, international, and small parcels — you name it, we can move it within our own platform, and that’s very meaningful when you think about the different shippers of all sizes that Echo works with. They generally want a one-stop shop to be able to execute a multimodal shipping strategy,” added Jecklin.
Becoming a one-stop shop has allowed Echo to expand customer relationships from brokerage into managed transportation. “Our managed transportation product, which is about a billion-dollar business at Echo, is built into the same technology as the brokerage, [which] means that for us to do business with a shipper as a brokerage client and have them transition to a managed transportation client is a very seamless task,” stated Jecklin.
Jecklin highlighted how Echo’s 3PL business acts as a top of funnel when looking to expand partnerships with shippers. “Our biggest entry point for new managed transportation business is our current brokerage customers, with over 50% of our managed transportation wins coming from a current brokerage client where we might move 20 loads a day and we go to 100 loads a day, because we’re taking on all the freight with a new contract. I’d say that the multimodal approach and the approach to have both brokerage and managed transportation in one platform is unique for Echo.”
Technology at your fingertips, experts by your side
When Echo created its TMS platform, the company realized early that data science would play a pivotal role in the years ahead. Echo hired its first data scientist almost eight years ago and has since expanded the team to over 15 people, resulting in new features and functionality for the company’s data tools.
Jecklin notes that embedding data science features and functionality into Echo’s tools and platforms offers a competitive advantage. “You could go to all of our competitors that are big and they would all have some amount of data science within their platform, but it’s truly unique when you think about the life cycle of a load that all that happens from order to cash, how many different minute details there are and tasks that are happening, and when you are building your own technology, you’re able to embed data science and differentiation into each one of those unique tasks.”
A common concern when 3PLs discuss technology and automation is “what happens to their office staff?” To that point, Jecklin informs, “We’re not building technology to replace all humans; we know that there’s more to this business and more to brokerage than just automating every single task. That’s not the way to run a profitable, successful growing brokerage business.”
“We’ve all come to realize at this point, the combination of people and tech is what matters, so in anything that we’re building, we’re focusing on the change management, the adoption, and the trust in the technology.”
Another challenge is building trust from the organization and focusing on the change management needed to make the technology development successful. Consequently, it took a concentrated effort among Echo’s business and technology teams to foster the growth of newly introduced technology.
“Think about hiring data scientists seven or eight years ago and getting them to know the complexities to predict a truckload cost on any given lane, and you then take a bunch of old-school brokers that have been doing it for decades and get them to trust the technology. That was a process …It didn’t just happen overnight, but I think Echo’s acknowledgement that it’s a journey and it’s an evolution, and it’s the progress we’ve made over the last two decades in building the technology from the ground up, that’s again the differentiation.”
Matching technology to customer needs
Depending on what stage the freight cycle is in, customer needs and requirements can vary. Echo noted that a recent development is the growth in shippers interested in managed transportation, stemming from the lingering impacts that COVID capacity shortages created.
“When the market softens is generally when we see the biggest uptick in our managed transportation new business. 2023 was the absolute record year for new business that we sold for managed transportation at Echo, and it’s because of shippers’ challenges that they had in 2021 and 2022.”
Echo quickly realized its integrated multimodal TMS can be that alternative. “We’re basically offering a fully outsourced transportation management solution where we’ll come in, we’ll look at their supply chain, where their warehouses are at and the network they’re utilizing. Then we’ll leverage the 100-plus LTL carriers we have great partnerships with, leverage the 50,000-plus truckload carriers we do business with to create a great solution for them that generally almost in all cases saves them money and takes a lot of the burden of actually managing the freight off their plate.”
Multimodal also extends to areas like partial truckload, which previously wasn’t considered by shippers. Jecklin notes Echo coined the term partial truckload around 15 years ago.
“This partial mode that we offer for freight that sits between what an LTL would be, or what a truckload would be, a lot of the LTL carriers will call it volume LTL, but we’ve leveraged a lot of our truckload relationships and carriers that want to run this partial business for us. It’s a pretty unique offering for shippers that are not always aware that it exists, and being able to leverage that across our shipper platform is pretty unique.”
Solutions for all types and sizes
An added benefit of a multimodal TMS and technology platform is that it can be scaled based on the needs of a single mom-and-pop facility to a multinational Fortune 50 company.
“When you think about our top customers…the Fortune 100 shippers and our top carriers, in a lot of ways, are the nationals, but a very large portion of our overall freight spend might be small to midsize businesses on the shipper side, and might be middle market or owner-operators on the carrier side,” Jecklin said. “That’s unique because in a lot of ways those different-sized carriers and shippers need different types of technology.”
“If you’re going to build it, it requires additional resources and time to build those types of technology offerings. We’ve taken our time to make sure that we get that right, and through that, we end up with very multimodal shippers because the midmarket has lots of truckload, and they also have a lot of LTL because they might not have the relationships with those large national players to be able to get rates that Echo could get.”
This is an additional benefit for those mid-market carriers and shippers who lack the resources or reach to expand their networks.
To learn more, visit www.echo.com.
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