A 4-year-old trucking startup achieved a major victory in fixing one of transportation's biggest inefficiencies — and it's a huge win for truck drivers
- Convoy, a trucking startup in Seattle, announced on Tuesday that it could now match truck drivers and loads without human intervention in top markets.
- Completely automated matching was a main goal of Convoy's app, which was recently valued at $1 billion.
- Convoy allows trucking and shipping companies to connect over its app, rather than the traditional way of using a phone broker.
- Automated freight brokerage can match truckers with better loads and ensure they're paid on time.
For a trucker to get in touch with a retailer who needs their goods moved, the process can be cumbersome.
It's even more frustrating for a small trucking company or a trucker who owns their vehicle. In those cases, they will contact "voice brokers," who call up warehouses and ask if there's anything the driver can carry. About 15% to 25% of the time, trucks end up carrying nothing.
And then there's the cut that brokers take from arranging the loads: about 10% to 15% of the total cost to move a shipment across the country. The whole process can take hours.
But that's waning as freight-brokerage apps become the way retailers find their truck drivers, and vice versa. And Convoy, a leader in that technology, on Tuesday announced a major milestone in removing humans from matching truckers and shippers: It said it could now match truck drivers and loads 100% autonomously in top markets.
"People thought it was something that could never be done," Ziad Ismail, Convoy's chief product officer, told Business Insider. "People thought that you really needed phone calls and faxes."
Convoy, based in Seattle, counts among its investors Google's investment arm, Amazon CEO Jeff Bezos, and Salesforce CEO Marc Benioff. It was recently valued at $1 billion.
Convoy accomplished this in part through its huge user base, which it says includes more than 35,000 trucking companies, 100,000 drivers, and 500 shippers. Ismail said this allows Convoy to understand which truckers and companies prefer which sort of jobs.
By automating the process, Convoy can more quickly match its trucker user base with jobs fit for them, Ismail said.
"Trucking is more than 100 years old as an industry, and very little innovation has happened in it," Ismail said. "Today, every truck driver has a mobile phone with a data plan. This is really a moment where we can reinvent the trucking industry and build something different."
What about the people who broker freight for a living?
With the advent of other startups like Uber Freight, Transfix, and Next Trucking matching truckers to ideal freight loads, there's naturally the question of what happens to America's 17,000-odd freight brokers.
But the founders of these apps say the value that can come from removing intermediaries is significant.
"If you're able to run the brokerage system more efficiently, truck drivers can get more jobs done per year," Convoy's CEO, Dan Lewis, previously told Business Insider.
The transparency that app- or website-based brokerage can provide can be a boon for America's 1.8 million truck drivers too.
Uber Freight, for instance, allows truck drivers to rate shippers in the app to ensure retailers pay drivers for keeping them waiting at warehouses, called detention time. Convoy says it also expedites the process in which truckers are paid for detention.
Ismail said the less time that truck drivers and shippers spend on things like faxes, phone calls, and emails, "the more time they can spend on building their business and helping their business thrive."