In a market which includes some 50 other competitors, Seattle based digital freight-booking startup Convoy has taken a major step forward by raising $185 million during a recent funding round spearheaded by Google parent company Alphabet, Inc. Convoy already had the monetary backing from the likes of Microsoft founder Bill Gates and Amazon founder Jeff Bezos. The new funding brings Convoy’s total raised to $265 million, giving the business a total value of over $1 billion.
Looking to emulate what Uber Technology, Inc has done in the on-demand passenger market, Convoy hopes to use its website and mobile application to allow retailers and shippers to book trucks to move their products. Convoy claims it can link carriers and shippers faster than traditional cargo booking operations. With economic numbers soaring and demand on the rise, Convoy plans to use its new funding to book multiple shipments at a time, speed up receipt of payments and use data from shipment tracking to advise customers on ways to streamline their operations.
Not surprisingly, Convoy’s leading counterpart is San Francisco based Uber Freight, which boasts that they have doubled their load volume every quarter since inception in May 2017. Uber Freight, however, does not release any information about a number of drivers, the value of loads or funding amounts, so it’s difficult to calculate their success. Both Convoy and Uber Freight are attempting to play a major role in the decidedly fragmented booking business while locking horns with current traditional industry stalwarts, Hub Group, Inc., C.H. Robinson Worldwide and Inc., and XPO Logistics, Inc.
These traditionally modeled companies appear to be working toward taking on the competition by updating their mobile apps and developing new technology, yet they remain dedicated to providing a “personal touch” for drivers. C.H. Robinson Worldwide spokesperson Chad Lindbloom said, “while we’ve spent $1 billion on technology in the last 10 years, we still have the traditional phone, fax, and email analog system for communicating. A lot of drivers and small carriers still want the human touch.”
CEO of Tucker Company Worldwide and chair of the Transportation Intermediaries Association’s technology committee, Jeff Tucker argues that mobile apps are not the answer for problems in the trucking industry. “Drivers want to talk, ask questions, connect, and you cannot stop that conversation. Data will never replace that,” says Tucker.
In contrast, the Pennsylvania based owner of N&W trucking, William Lugo loves his Convoy App, saying, “I open the app, see 100 loads and 10 are in my area. I certify the pickup and delivery day. Prices are set—on average $1,000 to $1,300. But if I feel it’s too low, say $900, I can bid, say $1,100. It’s a risk but I’ve only lost three loads on bidding.”
Los Angeles based Cargomatic developed the first smartphone app for truckers back in 2014 but basically concentrated on the L.A. urban market servicing the large ports at San Pedro and Long Beach. Convoy has taken digital booking technology to a new level by automating what had been a strictly traditional long-haul freight business. When it launched in 2015, Convoy announced it would revolutionize the freight business by making it easier for drivers and shippers to connect. Convoy has also given a nod to the burgeoning “green economy” by indicating its technology can save gasoline. Convoy’s website says, “For every 1% improvement in truck routes and utilization, we can save nearly 400 million gallons of fuel from being consumed, 100 million hours from being wasted and 3 billion miles from being driven each year.”
Along with Bezos and Gates, Convoy has also received backing from eBay founder Pierre Omidyar, Expedia Chairman Barry Dillar as well as various venture capitalists from Silicon Valley. Overall, Convoy is arguably the best-funded trucking technology company in the United States.