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Category: Transportation and Logistics

Digital Freight Broker Convoy Continues to Evolve


Keeping Shippers, Truckers and Investors All Happy is Not Easy

Nov. 6, 2019
SCDigest Editorial Staff

Investment has poured in to new-age digital freight broker Convoy. Thus far, investors have put in some $275 million into the company, including marquee names such as Jeff Bezos, Bill Gates and founder Marc Benioff.

The idea of Convoy founder Dan Lewis: replace the old low-tech, relationship-oriented freight brokerage market – where intermediaries connect shippers with (often small) carriers -with a technology-focused service that streamlines processes for shippers and truckers.

Supply Chain Digest Says...

One newer feature of the Convoy app allows trucker grading shippers based on how quickly they load a shipment. Companies with slow loading docks pay a premium because fewer drivers want the job.

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And the idea has gained some traction. In Q4 2018, Convoy had about $300 million in revenue on an annualized basis, and rival Uber Freight – which actually started later than Convoy - was on track for $500 million, according to Silpa Paul of research firm Frost & Sullivan.

A recent article on summarized the attraction to small carriers and independent owner-operators the Convoy model offers. Truck owner Amit Sekhri said dealing with brokers for loads meant lots of phone calls and getting paid late.

Conversely, Sekhri says with Convoy, he can select nearby loads listed by shippers on a smart phone app and get paid in just a day or two after delivering the freight.

For shippers, an app uses GPS to estimate a driver's arrival time for pickup and other visibility tools.

Everything is good, right? There's just one problem: truckers using Convoy are increasingly complaining about low rates, and some are reducing or even abandoning Convoy loads.

Freight transportation rates have been falling all year, after robust increases in 2018. Spot market rates are down about 25% year to date. The low prices have forced a number of carriers into bankrupcty.

But truckers are often singling out Convoy for cutting into their margins.

"App reviews for Convoy are riddled with complaints from drivers about low prices" the Bloomberg piece notes.

Convoy CEO Lewis in effect tells truckers the company can't do much about market rates, but can help a bit by reducing their costs.

One way it does that is by a service called Convoy Go, which lets truckers come with only their tractors to a shipper and hook up to an already loaded trailer.

Such "drop trailer" programs are common with large carriers, and allow drivers to greatly reduce waiting times at shippers that often occur when the driver supplies the trailers. This program allows the same advantages to flow to small carriers.

However, one driver told Bloomberg that after moving the dropped trailer to its destination, return loads from Convoy are often priced too low. That driver said he often books the return trip at a higher rate with a traditional broker.

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Convoy says while it does not support that practice, as long as the driver gets its trailer back in a few days things are OK.

It's a tough proposition keeping shippers, drivers and Conway investors happy at the same time, but Lewis says the path to do that involves using technology to wring inefficiencies out of the market.

For example, one newer feature of the Convoy app allows trucker grading shippers based on how quickly they load a shipment. Companies with slow loading docks pay a premium because fewer drivers want the job.

And a new Convoy service called Direct to Shipper allows carriers to bid on shipments eBay style.

If it works as intended, Bloomberg reports, trucker should be able to line up more jobs on routes they want and at rates they like, meaning less empty time and more money, according to Convoy.

However, another result could be lower rates, as drivers are pitted against one another to bid the lowest cost and win the load.

Either way, Convoy's approach is attractive to many shippers. For example, Bloomberg reports that bottled water maker Waiakea Springs was used to seeing rates of $8,000 for moving trailers from the West to East Coast,, but the price on the Convoy app usually tops out at $5,300.

There were some quality problems at that low rate, but Convoy was able to match the company with a larger carrier that would take the loads at basically the same cost.

But that kind of service comes at a cost, as Convoy struggles to turn a profit.

What do you think of  the Convoy model? Let us know your thoughts at the Feedback section below.



Your Comments/Feedback

Michael Evans

Posted on: Nov, 07 2019
It is tough keeping everyone involved in the shipping industry happy. Freight brokers seem to be trying to work things out to help all those involved. Thankfully it evolves like everything else so if it is not working out right now, hopefully it will eventually get to where all involved are pleased. 



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