Convoy, a Seattle-based company that presents itself as “Uber for trucking,” has been launched in the US.
The online service and app pairs shippers with available local carriers based on proper equipment, payload, capacity and distance.
Convoy gives pre-approved carriers the option to accept or decline a job based on the listed price, which eliminates haggling—a hallmark of the trucking business, The Verge writes.
The industry’s value exceeded $600 billion in 2011, according to data from trade group American Trucking Associations.
The trucking infrastructure is more vast and complex. Convoy says there are 1.2 million trucking companies in the US, most of which have fewer than six trucks. Many of these companies send their drivers on hauls over short distances.
A fair percentage of trucking business comes from the “spot market”—short-notice shipments that can drive the price of shipping up and down based on supply and demand.
This space is where Convoy is aiming to grow its business as the go-to on-demand provider.
“There’s a huge opportunity right now to change trucking,” says CEO Dan Lewis.
“We think of ourselves as regional and local trucking. For the work we’re doing today, our drivers should be home that night. Sometimes they may be driving a full day and sometimes they may take a job that lasts an hour, but they can be at home at night.”
Almost 40% of the total value of goods are moved less than 100 miles, according to the Federal Highway Department Transportation Bureau of Transportation Statistics.
Trucking may not sound like the most exciting industry to disrupt, but you can see where Lewis got the bug: In college, he had a summer job working at his father and uncle’s office supply company delivering furniture, boxes and palettes of paper. He went on to lead operations at Wavii, an informational app acquired by Google in 2008 and then ran a group developing new products for Amazon.
His Silicon Valley ties have helped him build an impressive list of investors, including Jeff Bezos, Uber co-founder Garrett Camp and Mark Benioff. He co-founded Convoy with Grant Goodale, who serves as the company’s CTO and worked at Amazon and founded game studio Massively Fun.
Convoy’s goals are not small: It is aiming to change an industry, in the same way Amazon Prime’s default two-day delivery changed consumer expectations of online shopping.
The company has built an algorithm based on different types of loads that meet the requirements of varying industries. The app uses a dashboard to help oversee shipments and GPS tracking to monitor delivery status. In the Uber tradition, each party rates the other on job satisfaction.
Initially, Convoy plans to target construction, manufacturing and retail wholesale and distribution. It has built a modest network in the Seattle area to test out the concept prior to the official launch. Next year, the company plans to expand into other markets.
The Convoy app is free, but the company will charge fees to use the service. Those fees have not been announced, but a company spokesman says that the margin is below what brokers take, which ranges from about 20% to as high as 45% for local and regional jobs.
