Connecting A Siloed Industry And Creating A Greener Supply Chain

The conventional tools and practices used by shippers often leave them stuck in the day-to-day transactional way of contracting on a load-by-load basis, unable to connect outside their silos, and without the tools to properly engage in long-term planning to manage through market volatility. Today, many in the trucking and logistics industry — shippers foremost among them — are looking to improve reliability, reduce costs, and decrease their carbon footprint to deliver against rising customer expectations.

Leaf Logistics works to connect across industry silos to remove waste, in the form of empty miles and transactional workload, to build a more resilient transportation industry. The company is building an interconnected Grid, one which links existing siloed networks to each other, revealing dramatically more opportunities to coordinate between parties to remove waste. In doing so, Leaf is fairer, more transparent environment in which to do business.

"Implicitly, [the transportation industry] is a connected industry, but practically, it is not," said Anshu Prasad, co-founder and CEO of Leaf Logistics. "We are interconnected already but very loosely — very transactionally." 

Leaf was founded to rethink the way that transportation is bought, sold and coordinated. Leaf works with both shippers and logistics service providers (LSPs), including carriers and brokers, by offering digital solutions to help them deliver on their business objectives. Customers use Leaf's products, powered by machine learning, to build resilient transportation plans that maximize productivity through optimized circuits, while removing excess scope 3 carbon emissions associated with wasted miles. 

Leaf's goal is to function as an "air traffic controller" across a better connected transportation industry, as a neutral data layer responsible for coordinating the best matches and multi-party circuits between shippers and LSPs.

"The air traffic controller has to be trustworthy, impartial and objective in directing the right load to the right trucking company or broker," Prasad said. "The goal is to solve for various, often competing needs when moving goods, but you need to ensure the way you engage with the person on the other side of the contract is fair and transparent."

Leaf stresses the importance of introducing more transparency when connecting shippers with LSPs to build trust in the industry.

"Right now, all these networks are really siloed, and they have middlemen who sit between both sides of the interaction. We want to build a more neutral connectivity across the entire industry that removes friction," said Greer Lynch, marketing lead at Leaf Logistics. 

One specific challenge that shippers come across is the contracting process. 

"The fundamental pain point is the way that shippers and LSPs interact in a procurement setting. It is fundamentally broken," said Chuck Toye, product lead at Leaf Logistics. "The RFP process is often where shippers and LSPs are feeling each other out in regards to what it will cost if we did business together. That ‘if' is a pain point for both shippers and LSPs. Leaf is aiming to solve this particular problem by getting shippers and LSPs to commit to each other in a slightly more powerful and reliable way than in the past and both benefit in the process."

Many shippers have turned to alternative methods to avoid the dysfunctional RFP process and the uncertainty that comes with it — a couple methods being minibids and auctioning. Leaf believes these approaches can be time-consuming and counterproductive, leaving end users with the same issue that plagues RFPs today: uncommitted capacity and unenforceable rates.

"It may give the perceived element of flexibility to the shipper, but in reality, you're asking carriers or brokers to rebid every few months, amounting to less commitment overall and in turn, decreasing reliability," Lynch said. "If they win your business today and in three months you're going to go rebid it, what is their incentive to really understand your business and partner with you?"

Leaf believes that transportation should operate like a utility where transportation is available when shippers need it, and ideal routes and schedules are available to LSPs to build healthier, more sustainable businesses. The company builds tools and solutions to realize this experience of accessing transportation when partnering with Leaf. Toye recognizes that most shippers in the industry are scrambling to move goods from month to month. He says the company's smooth, efficient operations demonstrate to customers that transportation services can be reliable just like tapping into a utility grid.

"It should be easy to procure transportation — easy in the sense that it should feel like turning on a faucet, plugging into an outlet or flipping a light switch. Power and water are utilities and they are reliable," Toye said. "Right now it's a scramble to do RFPs and fill trucks. We think transportation as a utility is a way to present the idea that it shouldn't be that hard to move goods and do it reliably."

Utilities give feedback as well, he added: "I know what it will cost me so I can make decisions to use more or less because I know the impact of doing so."

Leaf emphasizes to shippers the importance of planning ahead. The company has created digital solutions to combat the lack of visibility that the current procurement processes present. Leaf is seeking to solve common shipper pain points through its productsLeaf Adapt and Leaf Flex, which work across the Leaf Grid of connected industry participants.

The Leaf Grid gives the company a sense of where freight is moving across the industry and who needs what moved where. The grid represents $24 billion worth of spend over a period of time and is too large for any single industry participant to navigate independently. Leaf builds its Adapt technology with machine learning to coordinate loads between shippers and identify opportunities for shippers to lock in long-term contracts over a future time horizon.

"With over 30% of all trucking miles being wasted, that's a pretty good indication that something is wrong in the way the industry has been planning transportation today. Leaf can take demand from three different shippers and combine those loads into one circuit that allows one truck to run full over the period for a day — which increases reliability, decreases empty miles, and reduces companies' carbon footprints," Toye said. 

Leaf Flex is the company's contracting solution to replace a significant portion of rates that are currently negotiated through an RFP process. Leaf Flex contracts commit capacity from a  on a specific lane or a multi-shipper circuit to deliver predictable utilization to the provider, reliable capacity to the shippers, and fewer empty miles overall.

"We are helping shippers by locking in capacity," Lynch said. "As a shipper you will know which carrier will be there every Wednesday for the next eight months and at what rate."

"Leaf's Grid gives us scope, Adapt gives us efficiency and Flex contracting gives us the reliability of knowing that the route is going to run on a schedule — those three things together make a powerful offer to shippers and LSPs," Toye said. "And while just having visibility is great, you need to communicate and act on it to make anything happen — which is why we created Adapt and Flex for those who need to make coordination happen."

Leaf is continuing to bring traction with enterprise-level shippers — helping them with planning and scheduling. Leaf's goal is to be good listeners to its customers and ensure they're meeting their customers' evolving needs as their neutral "air traffic controller".

"I think the future of this industry is much more interconnected and more data-driven, allowing decision makers to have a much fuller understanding of the options that are available — so they can make strategic decisions, as opposed to just reacting," Prasad said. "Today, it's about executing transactions and triaging issues — just trying to get through today's challenges. What would be better is decision-making aided by data that allows you to look ahead. This is what we are working toward. We want to be the data source that helps shippers and providers to look ahead and plan ahead."

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