Seattle-based digital freight broker Convoy heralded a company milestone today for 100% automatic load-to-truck matching, minus human intervention, in key United States markets.
Routes cited by Convoy, in this milestone, include: major West Coast markets such as Seattle, Portland and Los Angeles; Midwest routes from Chicago, Cincinnati and Milwaukee; routes from Texas markets such as Houston, Dallas, and San Antonio; Northeast routes from New York and Philadelphia and Southeast routes from Atlanta, among others.
What’s more, in addition to the Convoy network hitting 100% load-to-truck matching in its key markets, it also noted that it is now automatically matching 95% of its brokered loads to trucks, and it added that number is heading up, with more markets adopting its technology.
In a blog posting, Ziad Ismail, chief product officer at Convoy, explained that Convoy measures booking loads with carriers in two parts: finding a truck that is available and can arrive on time (matching), and agreeing on the rate at which that work will happen (pricing).
“We have been tracking our level of automation for both of these metrics since Convoy’s founding as indicators of our progress,” he wrote. “For matching, we have largely eliminated the call-intensive model for finding the right truck across Convoy’s national network. For pricing, the majority of loads are now also being handled without any human interaction.”
In an interview with LM, Ismail explained that when Convoy first started out roughly four years ago, one of the first things it did was try to understand what the most expensive things were for the company.
“What we quickly learned, and is what most brokers learned, is that the most complicated thing is buying a truck [capacity] that is going to do the job,” he said. “It typically takes a broker about ten phone calls to find one truck. This is a problem we have been working in for about three years. We have been tracking this metric. It is a key one we track internally. And the conversation in the industry has been essentially ‘you are never going to be able to solve matching, because people want the human relationship and have someone to call and speak to.’ We have been working on this for three years, and since January we are now at 100% in many of our key markets across the U.S.”
When asked if that 100% figure was an attainable goal three or four years ago, Ismail did not hesitate to explain it was the company’s goal, one that aligned well with its mission of transporting the world with zero waste.
“We did not know if we would get fully there,” he said. “The industry chatter was that it would never be possible…as there would always be humans involved in the matching and trying to find the right truck.”
Convoy made what Ismail called steady progress over the first two years, getting up to 80% automatically matching loads to trucks before hitting a plateau, which led the company to rethink what it would take to get over the hump for the last 20%.
“That is where we have been making a lot of investments in really trying to make our app super compelling for drivers and everybody that uses the app,” he said. “We have been working on it for a long time. It is one of our most important issues to work on.”
One result of that investment is Convoy‘s Flex Loads offering, which was released in October 2018 and provides carriers with the flexibility to choose the perfect pickup and delivery date for their schedules and subsequently enable to transport more full loads, with shippers also seeing value adds in the form of on-time gains and a fall-off in rates and costs. Other related efforts were the app’s No Hassle Detention feature, which was rolled out a year ago and helps carriers better negotiate detention-related issues, in addition to Request a Load, which allows carriers to directly share preferences and get them the loads they want with less effort, and Instant Bidding, which was released around two and a half years ago, and lets carriers share information regarding types of loads and pricing they want, with the Convoy systems able to assign the right jobs to the right driver.
When asked about the overall state of the rapidly growing digital freight market, Ismail said that, in terms of the broker role, the market is extremely fragmented, with around 15,000 brokers in the market.
“Most companies don’t have any scale and don’t really strategically invest in IT, and there has been limited IT innovation in the 100 years or so that trucking has been around,” he said. “What has happened over the last three or four years, is that today each truck driver has a smart phone, which means you can deliver innovation directly to drivers in a completely different way than was possible before. That is what has really enabled all of this innovation. The way we look at it is transportation is one of the very largest industries in the world, and over the next few years we are going to see the continuing acceleration towards technology improving things, both for truck drivers and for shippers by taking out waste and building good experiences.”
What’s more, Ismail said these developments are in tandem with the general theme of the trucking industry’s shift towards technology, with large shippers not looking for just a broker, but also someone that can be a strategic IT partner and help prepare them for what is coming next and go “deep” on the partnership side.”
“In general, we are really seeing an acceleration at Convoy, having raised recently nearly $200 million from Google Ventures and others,” he said. “The reason we did that is that we are kind of accelerating the company and are growing very quickly, both on our customer side and internally.
Looking ahead, Ismail said Convoy is focused on continuing to innovate for its apps features and the overall experience for shippers and drivers, with a focus on removing inefficiencies.
“It is about helping drivers operate their businesses more efficiently so they can grow more quickly,” he said. “It is the same on the shipper side through offering them higher service levels, and we can pass along some of the savings we are seeing as well.”
On a longer-term basis, Ismail said that Convoy is actively seeing shippers really embrace technology. And the reason behind that, he explained, is that transportation is shifting from being less of a cost center for companies, in terms of thinking beyond making its products and shipping them to warehouses, to a more strategic approach.
“Shippers see companies like Amazon really use its supply chain as a huge competitive advantage,” he said. “We are seeing transportation and logistics now being really elevated inside of companies, with people looking to identify their respective strategic plan. That is where technology comes in and has opened the door for some long and interesting conversations we are having with shippers.”