Transport Exchange CEO Lyall Cresswell on the development of logistics digitalisation
The coronavirus pandemic has triggered a seismic wave towards the digitalisation of supply chains. Transport Exchange Group CEO Lyall Cresswell was nonetheless one of those to embrace digitalisation many moons ago, spearheading the creation of a PDA app in the mid-2000s and being among the first to implement telematics integration into a freight platform. Since then, however, the transport and freight exchange marketplace has become more competitive and more complex, presenting no shortage of new challenges.
In light of these developments, we reached out to Lyall Cresswell to look back on the development of Transport Exchange, touch on the current market situation and get his thoughts on what the future could look like.
Hi Lyall, thanks for taking the time to talk to us at Trans.INFO.
Transport Exchange Group was set up over 20 years ago now. How has the company evolved in this time, and at what points did the most significant developments take place?
Well, we started with a super simple and straightforward USP, which was to improve the utilisation of what we call, and still call today, ‘return journeys’ – the empty running in the same day courier market. As you can imagine, we’ve gone through a lot of iterations since then.
One of those was the introduction of what I believe was the first widely available mobile app, from the time before they were actually called apps! I recall we actually went live with that in 2004, when the first consumer device became available – the XDA from O2. It was the first time that a small business could go into a store and buy a connected device, rather than it being a large enterprise type purchase. It handled everything and even had push notifications, which of course are now commonplace, but were certainly not at the time.
The drivers could handle the whole of the transport order execution on that, starting from receiving the order electronically, through to the electronic proof of delivery, which also had the customer’s signature on glass. That was quite innovative and the drivers on our platform at that time loved it.
A couple of other milestones relate to the growth of the network. We started from an absolute blank sheet of paper, but now we stand at around 7,500 businesses which are live on the platform. These are all transport and logistics operators, they range from very small businesses, drivers and micro carriers, right the way through to some large businesses including 3PLs and others.
A third milestone was the 3rd party telematics integrations. Our stance in the market is that we’re totally neutral and independent. We’re also device agnostic and partner neutral. To my knowledge, we were one of the very first freight exchange platforms to actually say to the third party vehicle telematics providers, “look, you can integrate with us”.
Obviously, we have mutual customers being the fleet operators. Indeed, we created quite a lot of extra value there for everybody, both the fleet operator and the telematics provider, by bringing that data into our platform.
Then the fleet owner could actually do a number of different functions with that, including generating notifications and also visibility of loads which are in progress, as long as they had assigned an inbound order to the correct vehicle.
I’d say those were amongst three most significant developments.
A number of the logistics companies we talk to nowadays, particularly the younger ones, refer to how the industry has long needed to modernise and digitalise. However, given that a lot of your offerings rest on technology, and you’ve been around for over two decades, you may have a different perspective on the matter. How have you seen attitudes to digitalisation in the logistics industry develop over the years?
One of the things we have observed that has actually held back the digitalisation journey over the last few years, which obviously now is gaining pace, was the fact that many shippers have been slow to embrace digitalisation, become digital savvy and work in a more paperless environment.
One of the misconceptions, in our experience at least, has been about user adoption within the carrier community and especially the smaller carrier community. And just as I explained to you about the mobile app that we introduced in 2004, we are seeing especially on the carrier and driver side, they’ve been very eager to adopt digital solutions because clearly, it saves them time and money. It’s so much more efficient for them than printing out proof of deliveries and invoices and sticking them in the post.
Often It’s been the shippers but also sometimes the buyers on our platform, or perhaps other transport businesses and 3PLs and such like, who have to do what fits in with their shipper’s view of the world. That is changing though – there’s no doubt about it. It is changing in every aspect of business and life, and transport logistics is no different – the process of digitalisation is moving much faster now.
What can hauliers get out of a platform like Haulage Exchange?
Well, fuel is obviously a prime cost that carriers have. One of our main benefits here is increasing the load factor on vans and trucks.
We’re not a planning tool, that’s not our mission, but we’re helping to improve the utilisation of all vehicles and anything that does that clearly helps to mitigate the impact of your costs.
The same goes for reducing empty backloads although it’s not our main mission. Nowadays we’re a much more comprehensive, diverse digital ecosystem.
We have information on driver availability as well, which helps to alleviate the driver shortage problem for carriers and hauliers.
The professional driver shortage is an interesting one too. This is a fact across, really, the whole of the Western world – not just in Europe, but also in North America. We have the same issue with an ageing driver population everywhere.
My personal view, and there are figures to back this up from people who really know this stuff, is that one of the things which would help to alleviate driver shortages, actually, is improved pay, as well as better conditions whilst overnighting and the respect and better understanding drivers should get from the community at large, which of course includes our politicians!
Fluctuations in demand is another area. In fact, it really gets to the nub of what our platform is all about. We put a huge amount of effort into customer success and engagement. The core of a platform such as ours is all about managing fluctuations in demand.
It enables users on both sides, both on the buy side and sell side, to be more agile and flexible. Depending on whether you’re an asset owning operator or a non asset owning business, or maybe your mix of the two, it literally is that valve which allows you to be more agile to cope with fluctuations in demand. That’s very much at the core of our value proposition there.
One of the core products you offer is freight exchange, and a number of new players on the market are trying to make inroads in this area by opening their own freight marketplaces. To what extent are you confident your offering will remain as strong as it has been amid the extra competition?
Well, we are completely immersed in this, as you would expect, and have been for a very, very long time now. We’ve seen startup marketplaces come and go, and we’ve seen new kinds of initiatives developing, especially amongst the digital freight brokers.
Looking from the outside, it’s interesting, and I think even for people in the industry there is a very confused picture as to what’s going on right now in transport & logistics. There are so many startups unpicking the kind of holistic offers that have grown up to date. You’ve probably seen that example of FedEx that I saw a year or so ago on Linked In. As you know, FedEx has a massively comprehensive offering and there are 100 or so startups that are all trying to unpick various different parts of the FedEx offering. I think it’s as confusing and as complicated as that.
As you say there are businesses opening their own freight marketplaces. So the key differentiator, again, comes back to our core outlook and our business model, which is to be a neutral platform that’s completely impartial. We are a trade platform, so we’re there to optimise the operations of participants, 3PLs and such, so that they can better improve not just their internal operations, but also improve and enhance the service that they can offer to their clients. And that’s a very key differentiator – we’re a digital facilitator, we don’t compete with our clients.
That’s how we can support thousands of different businesses all doing their own kind of activity, even if it all falls under the banner of transport and logistics. And that’s the marketplace.
What we do is we have a very comprehensive program to innovate and take all the businesses that are on our platform, to grow that digital ecosystem, as we describe it, and to make sure that they stay relevant for the 21st century. It’s as simple as that. It’s all underpinned by the marketplace, so that they can actively engage with other businesses when they need.
Given all the current developments, can you give a confident picture of how the market will look in ten years time?
That’s an interesting one. Honestly though, can anybody truthfully tell you what the market will look like – even in five years' time? There are things that didn’t exist five years ago now, which are commonplace now – especially in the consumer space.
So it’s difficult to tell how things might actually look like in ten years' time. Take autonomous driving as just one major initiative in recent years – it has had a huge amount of investment put into it, and this has continued during the pandemic.
Over what time period will that technology impact primary distribution, secondary distribution, local distribution? Nobody can really answer that question; even the futurists will get it wrong. It will certainly have an impact, but over what period of time and to what extent? It’s very, very difficult to tell.
But it’s our job, I guess, as technology evangelists, if you want to describe it like that, to think about and interpret the most important facets of market trends, whether it’s electronic POD or electronic invoicing, or digitalisation of the back office. We’ll distill those, develop the tech and deliver solutions to our clients to help them keep up to date and relevant. That’s what we’ll continue to do.
You have a subsidiary in the USA besides your operations here in Europe. To what extent do the two markets differ?
We have a pretty extensive understanding of the North American market; it’s actually a very different market, especially the 3PL market.
Over there the term is used to define non asset owning businesses, they are pure brokerages. And it’s a much more mature and formalised setup there that they have with probably 20,000 licensed brokerages, some of which are multi-billion dollar organisations, as well as many smaller mid-sized and ‘mom and pop’ businesses.
The geography dictates that. It’s just so massive, and the average length of haul is much longer than you get in in Europe. It’s far more developed and it’s different in that respect.
Looking forward, what do you intend to focus on between now and the end of the year?
So we’ve got a very active development program. We’re expanding the size of our engineering team all the time, and developing new functionality across the board to support our platform, as well as the growth rates in the platform which have continued to climb strongly even during the pandemic.
We’re seeing more members, so we generate more bookings. Also, there’s inflation in the market. It’s not universal inflation – it’s by no means affecting every load or every location or every type of vehicle. But there is inflation in the market and that’s what we’re seeing.
The other thing that we’re focusing very strongly on is the back office functionality. Operators in logistics are all about delivery excellence and operational excellence. But actually, from a platform point of view, the back office is actually very important.
What we’re trying to do with the build that we’re undergoing at the moment is actually reduce friction wherever it occurs. We’ve got millions of transactions happening each year between our members. That creates a whole lot of paperwork and therefore a whole lot of potential friction. A lot of those businesses haven’t dealt with each other before so don’t have one another already set up as suppliers and customers.
So by enhancing that piece of the platform, which is quite complex, and has required a lot of integration work as well, we’re actually taking friction out of the market and we’re making it easier for those businesses to to deal with one another, process their transactions and settle invoices.
We’re looking forward to the next decade, that’s for sure.