Table of Contents:
- New apps aim to replace brokers, 'reinvent' trucking
- What’s NEXT?
New apps and services from Convoy, NEXT Trucking have been designed to give truckers more control over loads, a bigger slice of the of shipping payment.
For some smart people with mad computer skills on the lookout looking for business processes fat with inefficiency, the supply chain is an area ripe for restructuring. Just on Tuesday the inbox included a pair of announcements for new apps and services aimed at changing the spot freight marketplace.
Convoy is a Seattle-based startup with the modest aim of “reinventing the $800 billion trucking business,” or so says the first line of its news release. Convoy is led by a pair of Amazon.com veterans with backing from the founder of the giant online marketplace, to say nothing of additional financial support by some key players from Uber, eBay and a top private equity firm, just to name a few. So I gave them give a call to find out just how serious this effort is going to be.
The pitch is straightforward: Convoy is designed to make it easy for shippers to connect with nearby trucking companies on demand, creating efficiencies and helping them book and track jobs instantly. The platform is now up and running in the Seattle-Tacoma area.
“The goal is to use the technical experience a bunch of us on our team have to make a better experience for truck drivers and carriers, in particular independent owner-operators and small truckers,” Founder and CEO Dan Lewis says.
The basic tool is Convoy’s free “simple but pretty powerful mobile app” that sends along a load offers to carriers in the network. But the technology isn’t simply a load board that broadcasts freight opportunities to its members.
Instead, based on the characteristics of the load, the technology selects and notifies the most appropriate available trucker for the job. Proximity, in addition to having the right equipment, is a key consideration. The would-be carrier then has a limited amount of time to review the offer and accept or decline before the offer expires and goes to another carrier in the Convoy network.
“If you try to blast that to everybody at once, people are going to react immediately and accept it without reading the details,” he explains, and any such “feeding frenzy,” along with the risk of cancellation, is potentially unsafe for drivers on the road when they receive the offer. Convoy is working to develop the most “fair” decision window, and Lewis points out that the offer will stand until someone accepts it—the carrier simply loses the exclusive right and the guarantee of the load.
Additionally, the technology sets the price based on algorithms that take into account those load characteristics and prevailing market rates. Variables include the type of freight, assessorials, distance, and pick-up/delivery windows, for instance. It’s up to both the shipper and the carriers to accept the price (although feedback tools are in the works if the pricing comes in significantly higher or lower than expected).
Based on preliminary work with area shippers, the pricing has been coming in just below market rates—but because Convoy’s percentage is much less than that of a broker, the carriers benefit as well, Lewis explains. And no loads have gone unaccepted to date, he notes.
“If we can get this right, this will save a lot of time and reduce the hassle,” Lewis says.
And Convoy offers other benefits, including a load checklist that stores before and after pictures and the bill of lading. Additionally, carriers can rate the shippers. Carrier management also can easily locate all of the trucks in the fleet.
The initial focus is on local and regional shipments, and Convoy currently visits every carrier in the network as part of the carrier screening process.
The goal for the next year is to establish “critical mass” in multiple regions around the U.S. to build the Convoy brand. Looking further down the road, Convoy aims to be “the best option” for local and regional trucking, with the potential “to connect the dots” between regions.
“I’d love to be at the point in five years where our customers are thinking, ‘I don’t know how we did this before Convoy,’” Lewis says.