Convoy’s on-demand trucking platform offers real-time insight into shipments among other services. Seattle start-up achieved a $62 million Series B injection in 2017 which drove the company ahead of U.S. competitors.  The company has raised more than $80.5 millionfrom more than 30 investors since it was founded in 2015.

In an article in July 2017,On-demand trucking app Convoy doesn’t want to be the ‘Uber for trucking’ anymore’, Andrew Hawkins reports that

Convoy’s fundraising was led by the venture capital fund of Silicon Valley-based incubator, Y Combinator.  Other notable investors in the start-up include: Cascade Investment, Bill Gates’ investment fund, Mosaic Ventures and Barry Diller, LinkedIn co-founder Reid Hoffman, on behalf of Greylock Partners, invested more than once. Also, Amazon CEO Jeff Bezos and Salesforce CEO Marc Benioff have given Convoy their backing.

Whereas Cargomatic focussed on the less than truckload urban market and drayage in Southern Californian ports, Convoy developed their services further, “…automating   every step of the largely manual, call in freight business of long-haul trucking.” Their app innovates, adding transparency for customers and supply chain managers.  “They show you the rate they’re covering and what they’re paying paying the Trucker.  Traditional brokerages just throw the rate at you,” according to Chris West, Transportation Director of McLane Food Services, which ships to national distribution centres.

Convoy promoted itself as the “Uber for freight”, promising to improve “.. the logistics ecosystem for truck drivers using technology.”  When Uber entered the logistics industry, their tag line was played down, of course.

Gartner research and tech consulting commented that Convoy were not ‘disrupters’ of the business model.  Automation of “load boards relying on telephone call-ins from drivers looking for loads” was a key change to T&L processes, according to Bart De Muynck, Research Director for Transportation Technology. This brought on the digital freight market place like nothing else.  The apps, such as those now available across T&L service providers and freight forwarding brokers.

The advent of the driver-payload matching app into the pockets of owner-drivers and its impact on the freight brokerage industry while a huge milestone in advancing efficiency and the fuelling of independent SME’s among drivers and carriers, T&L analysts on the U.S. trucking industry and supply chains is somewhat “overblown.” “It’s definitely not a disruptor of the business model…” says De Muynck.

Scheduling software does, however, improve service speed of regional, national international cargo transport.  Volume is expected to increase as capacity grows in the self-employed, freelance employment space.  De Muynck claims that as customers seek competitive freight rates from a parcel courier service, they will benefit from easier comparison. Similarly, owner-operators and small carriers will also be able to calculate the value of a contract quickly.

Large companies will always send 90-95 percent of their shipments through their core logistics partners”, says De Muynck. Nevertheless, for Avery Vise, Venture Portals of trucking research at FTR Transportation Intelligence, one cannot underestimate the “power of money and technology expertise”.

He explains that the road cargo services providers “… have the capital and resources to create an environment that is more driver friendly…”.  An online TMS system can offer drivers and carriers detail about the cargo, specifies week day versus weekend delivery requirements.

Convoy’s app is user-friendly and customisable, meaning the information requirements and access permissions can be tailored to a company’s needs.  It can be integrated into phone systems for communications and even linked to in-house Customer Relations Management systems and other software.  In their app’s flexibility, they are leading the way in terms of provision of brokerage IT infrastructure and development of big data for use by partner agencies where relevant.

The U.S.A.’s longest standing brokerage, a 57 year old company’s head, says that the likes of Convoy will not disrupt their industry, but their capacity to build market share and establish JV’s with partners is unquestionable.

 

Perspective of Drivers on Cargo’s TMS App

Dan Lewis, Convoy Co-Founder and CEO says their systems offer new parameters allowing all parties to expect a firm price for load, removing the hassle of “haggling”.  The ability to bid by truck drivers and industry professionals is a real boon to ensuring enhanced profitability and fair pay for work.

Exclusion of brokerage reduces overhead. A freight brokerage can impose an additional 20 percent fee per shipment, without this matching service charge necessarily disclosed to supply chains or customers.

For drivers who in the past had to chase work, Cargo’s app allows them to pro-actively attract contracts by posting their availability, capacity and professional profile into the app, which allows for automated matching with shipping customers.  Payment within 48 hours, minus middle management fees or factoring charges is highly attractive to the self-employed owner-driver.

As the truck drivers build their profile of experience, the App’s machine learning capacity offers ‘smarter’ connections.  According to a company spokesperson: “As drivers accept and complete more Convoy loads over time, they’re more likely to receive the best loads on the lanes they like to run”. Artificial intelligence is making the road transport and logistics industry increasingly efficient, benefitting all users.

Convoy have also addressed a concern among professional drivers that apps could potentially prioritise ‘rookie’ drivers to potential shippers, regardless of any possible track record of illegal activities, such as lack of insurance, or even unreliability and under-cutting practice.

Also, drivers can rate their shipping customers, to help them avoid being burnt by unreliable customers.

Loyalty benefits are also built into the software, such that both shippers and the truck drivers can benefit from repeated app use.  This is where Convoy differs from their competitors. Deeper, comprehensive user data allows for more appropriate connections based on Convoy’s automated brokerage history.

 

The Shipper’s Perspective on Convoy

Shippers key concern is the security and speed of delivery, weighed against optimal pricing for profitability.  The carrier and driver’s key priority is payload.  Convoy’s data management is linked to their website in such a way that shippers can enter the weight, dimensional and special detail of their cargo or shipment, required pickup and delivery schedules and any particular handling requirements into their booking order.

Convoy’s TMS software then automatically calculates associated costs and removes the need for negotiation wherever possible, simplifying the job of the freight broker company, trucking company, or owner-driver. Automated, immediate confirmation, real-time delivery tracking and timely proof of delivery all instil confidence in shippers using suppliers who adopt customer friendly tech.

However, Convoy founders claim theirs is more than mere online supply chain management services company, the company’s leadership see themselves as forging relationships for the longer term and are not interested in ‘churn’ for turnover’s sake.  Thus a driver performance rating system means anyone new to online shipping systems minimises risk to their cargo by having the endorsements of previous customers to rely on, rather than blind faith.

Truck driver performance can be easily tracked automatically over time and poor performance can lead to being dropped by Convoy’s network. Their digitised commercial transport system also verifies carrier and driver licensing and insurance coverage automatically, to reduce administration with tedious, repetitive paper work. As part of their on-demand trucking service, they also offers their own shipment insurance, to protect clients .

Cargo’s Road T&L Industry Impact

Convoy’s growing data set will no doubt eventually progress the availability of reliable industry data on cargo handling variables such as:

  • Cargo size
  • Revenues generated by cargo category
  • Volumes by category and / or sector
  • Freight value by cargo type and / or industry sector

 

Convoy has said the following about their data available.  The company is:

“…handling thousands of shipments and millions (of dollars) in sales per week” in only a few years on the road.  At last available data releases, they were partnering with 450 shippers, with numbers increasing year on year.  They also boast a network of 20,000 drivers and carriers and growing.

 

Their free to download mobile app is nationally available and able to service the key “epicentres where 95 percent of the country’s freight originates.”

 

Theirs is an effective and attractive solution that addresses the “shrinking driver workforce”, evolving regulatory environments, tougher enforcement, traffic delay and inflexible schedules, as well as optimising the experience of T&L supply chain management, from individual shippers through single truck owner-operators, to international freight forwarders.

It can boast at least five Fortune 500 companies and 20 Fortune listed companies among its on demand transport customers.  It has on-going and long-term contracts with household brands such as: Unilever North America and Electrolux. Anheuser-Busch has recognised Convoy as its first ever “technology partner of the year” for their supply chain innovation. Unilever awarded the company in 2017 as its “visionary partner” because of the capacity for transformative improvements TMS systems can make.

Road freight companies, logistics providers and transport brokerages seeking greater efficiencies and competitiveness can find ready-made digital solutions that can also be tailored to their changing business offering here.