After years of development and testing, Convoy today launched a new marketplace that helps small trucking companies get access to potential business traditionally available to only large carriers.
The Seattle startup, valued at more than $1 billion with investors such as Jeff Bezos and Bill Gates, develops technology to match truck drivers with shippers looking to move freight. It aims to disrupt a $800 billion U.S. trucking industry.
Today the company officially launched Convoy Go, a “drop and hook” marketplace that lets any carrier haul pre-loaded trailers which represent the majority of Fortune 500 company shipments.
About 90 percent of U.S. trucking companies operate six or fewer trucks, according to Convoy, but they typically don’t have enough capital to invest in a trailer pool network across the country to access the pre-loaded trailers. As a result, only large carriers are able to handle those orders.
Here’s how Convoy CEO Dan Lewis explained Convoy Go to Yahoo today:
“If a company is shipping a truckload of shampoo, they have two options. The first is, they can hire a truck that rolls in with its own trailer. The trailer is empty, so the truck has to wait for an appointment time. It then pulls up to the dock and gets loaded. It might be 2-to-3 hours before that truck can leave.
With Convoy Go, they can pre-load the trailer with the shampoo. So the trucks rolls in, hooks into that trailer and drives away. It’s super efficient. That wasn’t ever available to these small trucking companies ever. Before, you had to have the capital to buy and position all these large trailer pools at different facilities around the country.
With Convoy Go, we actually have a universal trailer pool and we’re making it available to any trucking company, even a one-truck owner-operator, so they can get all the same benefits, and more shippers and more trucking companies can participate in this super efficient model. It actually saves a lot of time, waste, and energy.”
Convoy said Convoy Go can increase carrier productivity by up to 50 percent. In its blog post, Convoy said that “up to a third of the cost of truck freight in the U.S. is attributable to time spent either waiting for appointments, or waiting at the dock to load and unload. This massive amount of waste has a direct impact on increased transportation costs, decreased drivers’ earnings and reduced overall trucking capacity for shippers.”
Convoy launched just three years ago and has already raised $265 million, including a giant $185 million round this past September led by Google’s VC arm that propelled the startup to unicorn status. The investment is a finalist in the Deal of the Year category at the GeekWire Awards.
The Seattle startup has competition in the form of traditional brokers such as publicly-traded giant C.H. Robinson, while freight operators themselves are also investing heavily in technology to keep up with demand. There are also newer direct competitors including Uber Freight; Transfix; Trucker Path; DAT; and others. Uber called out Convoy as a competitor to Uber Freight in its recent IPO prospectus.
Other Convoy investors Expedia Chairman Barry Diller, Salesforce CEO Marc Benioff, Code.org founders Hadi and Ali Partovi, and former Starbucks president Howard Behar.