Founders: Dan Lewis (CEO), Grant Goodale
Funding: $837 million
Valuation: $3.8 billion
Key technologies: Artificial intelligence, cloud computing, deep neural networks/deep learning, Internet of Things, machine learning
Previous appearances on Disruptor 50 List: 3 (No. 12 in 2021)
Over 70% of goods travel across the U.S. by truck, and if it ever did, the economy is no longer taking the role of truckers for granted. Trucker shortages have been a major factor in the supply chain crisis, and one that links the larger global economic snafus of the Covid era to an increasingly tight market for labor that had been getting worse for over two decades.
The shortage of truck drivers in the U.S. hit an all-time high of over 80,000 workers last year, according to the American Trucking Associations. The biggest companies in the market are being forced to respond. Walmart is raising the pay for long-haul truckers to as high as $110,000 in their first year with Walmart, and it launching a new trucker training program.
A start-up born out of Walmart rival Amazon has been tackling the trucker challenge since 2015 in a different way.
Convoy, founded by former Amazon executives, describes itself like a neural network for the freight industry, applying technology and data across its network of carriers to save shippers money and increase earnings for truckers. Convoy's digital trucking network links tens of thousands of small trucking companies and owner-operators via mobile phones as a way to digitize what historically has been a fragmented market leading to empty miles and less-than-full loads.
"If you look at all freight transportation, including air, ocean, rail pipeline, and surface transportation on trucks, about 80% of the dollars go to trucks. But, one of the biggest challenges we're seeing is that there aren't enough trucks, there aren't enough drivers, and there are no trailers," co-founder and CEO Dan Lewis told CNBC last year.
By Convoy's estimate, trucks run empty up to one-third of the time.
For Convoy, the port loading dock delays of the pandemic era have been an opportunity to put its innovation to work at a time of crisis. Its flexible "drop-and-hook" service, Convoy Go, designed to reduce time spent waiting at docks to load and unload, uses machine-learning to route and relocate drivers to hook up to a preloaded trailer. Convoy estimates a third of the cost of truck freight in the U.S. is attributable to time spent by truckers waiting, including at the dock.
In 2021, Convoy also opened up its technology to others, launching Convoy for Brokers, which gives logistics companies and trucking brokers (previously viewed as rivals) the ability to post loads directly to its network and access its trucker capacity.
Digital transformation has hit all industries, but trucking has remained largely, and stubbornly, manual. This has led many top investors to bet on Convoy, which closed a $155 million Series E equity round led by T. Rowe Price and Baillie Gifford at a valuation north of $3.8 billion in April 2022.
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