The developer of a freight-matching app for truck drivers and shippers at the ports of Los Angeles and Long Beach has raised $97 million in new funding as the startup works to improve its fledgling technology and expand to other ports.
NEXT Trucking Inc. said Wednesday that Brookfield Asset Management Inc. ’s venture investment arm is leading the Series C funding round together with Sequoia Capital, logistics property developer GLP and other backers. Brookfield owns some 37 seaport facilities globally, including the TraPac LLC terminal at the Port of Los Angeles, where NEXT trucking has been working to integrate its technology with the facility’s container-pickup appointment system.
NEXT’s app seeks to provide greater visibility on cargo movements at the nation’s busiest container shipping complex. Seaport terminals tend to be particularly opaque points in many supply chains, said Josh Raffaelli, a managing director with Brookfield Ventures. “We’re dealing with a fragmented base of trucking companies coming in and shippers who want to know where their goods are,” Mr. Raffaelli said.
“I think TraPac will be at the vanguard of what the art of the possible will look like” in logistics, added Mr. Raffaelli.
NEXT is part of a stream of startups that have drawn big investor interest with plans to use new app-driven technology to smooth out inefficiencies in freight transport by matching shippers with truckers. Most freight-brokerage startups, including Convoy Inc., Transfix Inc. and Uber Technologies Inc.’s Uber Freight arm, have focused primarily on the full-truckload market.
A smaller number have focused on hauling goods to and from seaports, including Cargomatic Inc. and DrayNow Inc. Among those, NEXT, of Lynwood, Calif., has drawn by far the most investor interest, raising a total of $125 million to date.
The investment comes as a pretariff surge in imports has caused extensive delays and congestion at Southern California ports, key gateways for goods coming from Asia. The crowded conditions have led to lengthy delays in handling goods and triggered a battle between shippers, carriers and port operators over fees that terminals impose on containers left for too long on the docks or held for too long off-site, known as detention and demurrage.
U.S. maritime regulators are looking at the charges, which are aimed at preventing cargo owners from using the docks or shipping companies’ equipment for storage. But shippers say the fees are often onerous and don’t take into account the delays that arise when ports are backed up for various reasons.
NEXT’s technology aims to connect available truck drivers and small trucking companies with retailers and manufacturers in real time. The technology streamlines communications between carriers and their customers, scrubbing inefficiencies from what often appears to be a dense and complicated freight-booking process.
Last year, NEXT added a port-specific booking platform integrated with the company’s own warehouse and container yard about 15 miles from the Southern California ports. Rather than hauling containers to customer sites up to a day’s drive from the ports, truckers bring goods to the company’s nearby yard and head back to the port for more. A separate fleet of drivers then take containers from NEXT’s yard to their final destination, booking those trips through the app.
“We believe we have completely reimagined the traditional carrier-shipper relationship,” said Chief Executive Lidia Yan.
Since launching in 2015, NEXT has added more than 15,000 drivers to its platform. With the new round of funding, NEXT plans to hire more engineers to build out its new “Relay” program and add sales and operations staff to expand the business, all while expanding its footprint to a handful of other port markets.
“It’s the top of the funnel, the beginning of the process when you’re bringing something into the country—it all starts at the port,” said Omar Hamoui, a partner at Sequoia Capital, which led a funding round for NEXT about a year ago.
Original Source: https://www.wsj.com/articles/truck-technology-startup-raises-97-million-for-port-freight-plan-11548237600