A four-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

truck driverAfrica Studio/Shutterstock

  • Convoy, a Seattle-based trucking startup, announced on Tuesday that they can now match truck drivers and loads without human intervention in top markets.
  • Completely automated matching was one of the leading aims of the app, which was recently valued at $1 billion.
  • Convoy allows trucking and shipping companies to connect over an app, rather than the traditional way of using a phone broker.
  • Automated freight brokerage can match truckers with better loads and ensure that they're paid in a timely fashion.

For a trucker to get in touch with a retailer who needs their goods moved, the process is traditionally cumbersome.

It's even more frustrating for a small trucking company or a trucker who owns their own vehicle. In those cases, they will contact a "voice brokers," who call up warehouses and ask if there's anything that they 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, which is around 10% to 15% of the total cost to move a shipment across the country. The whole process can take hours.

That inefficient process is on the wane as freight brokerage apps become the way retailers find their truck drivers, and vice versa. And Convoy, one of the leaders in freight brokerage technology, announced a major milestone in completely removing humans in matching truckers and shippers.

A Seattle-based company, Convoy announced on Tuesday that they can now match truck drivers and loads 100% autonomously in top markets.

"People thought it was something that could never be done," Ziad Ismail, Chief Product Officer at Convoy, told Business Insider. "People thought that you really needed phone calls and faxes."

Read more: Walmart's company truck drivers are among the best-treated in the industry - and they're getting a pay raise next month

Convoy counts Google's investment arm, Amazon CEO Jeff Bezos, and Salesforce.com CEO Marc Benioff among its investors. It was recently valued at $1 billion.

Convoy accomplished this in part through its huge userbase - more than 35,000 trucking companies, 100,000-plus drivers, and more than 500 shippers. Ismail said this allows Convoy to understand which truckers and companies prefer which sort of jobs.

By automating the process, Ismail said Convoy can more quickly match its trucker userbase to jobs that are fit for them, and vice versa.

"Trucking is more than a hundred 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?

Uber Freight, Transfix, and NEXT Trucking are other startups in this space that match truckers to ideal freight loads. With the advent of these services, 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 the middle man is significant.

Read more: The US has a major truck driver shortage - but the co-founder of a trucking startup that's attracted $80 million in funding says there are 3 other problems that are making the shortage seem worse than it is

"If you're able to run the brokerage system more efficiently, truck drivers can get more jobs done per year," Convoy CEO Dan Lewis 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 that retailers pay drivers for keeping them waiting at warehouses, called detention time. Convoy also expedites the process in which truckers are paid for detention.

"There are faxes, there are phone calls, there are emails," Ismail said. "The less time (truck drivers and shippers) can spend on that stuff, the more time they can spend on building their business and helping their business thrive."

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