As the world of automotive and freight drives toward a future of connected commerce and even autonomous driving, companies are fighting it out to solve the many problems in that area of the economy, including last-mile delivery. The latest example of the power of those digitally-enabled innovative efforts comes from online freight marketplace operator Convoy.
As The Wall Street Journal reported this week (Nov. 13), the company has raised $400 million in funding round led by Generation Investment Management LLP and previous investor T. Rowe Price Associates. “Founded in 2015, Seattle-based Convoy is among the biggest operators of online marketplaces that match truckers with shippers needing to move cargo,” the report said. “The startups, including Uber Technologies Inc.’s Freight unit, aim to make booking shipments more efficient by using mobile apps to find available trucks and automating transactions that had traditionally been arranged through emails and phone calls.”
Trucking is a difficult and vital job. It’s not only the long, often-lonely hours, but the anxiety — as well as the lost time and money — that comes from inefficient dispatching and last-minute (perhaps unwanted) loads, among other points. Stress can run high for both drivers and trucking companies, especially those still stuck in the analog era, or those with digital capabilities that haven’t advanced in a decade or more.
However, in a recent PYMNTS discussion, Lidia Yan, CEO of NEXT Trucking, spoke about how digital technology and the marketplace model can ease those burdens — and do so for an industry that is not only highly important to the larger economy, but undergoing massive disruption, and facing a driver shortage. PYMNTS caught up with Yan as her company raised $97 million in Series C funding, money that will help the firm, founded in 2015, to expand its business model and offerings.
Basically, NEXT Trucking uses digital technology to connect shippers with drivers and trucking companies (many drivers work for themselves, of course). It’s a marketplace model designed to reduce down time and other inefficiencies common in the industry, as well as help companies make more money, and allow drivers to better control their work lives and personal time. As Yan told PYMNTS, trucking is a complex industry with many different players — not only drivers, but freight forwarders and other participants, each with a stake in getting retail products to consumers, as well as industrial and other equipment to businesses and factories. Digital technology can help cut through all that complexity and clutter.
Uber, of course, is active in this area with its own offering, Uber Freight. Earlier this year, Uber Freight has announced that it is investing $200 million to “put down roots” in Chicago.
“Chicago is consistently at the forefront of innovation, from building America’s foundational transportation systems and its first skyscraper, to fostering world-class universities and research centers. The city has always been at the heart of the global transportation industry, and we’re eager to continue that legacy. Tapping into Chicago’s rich history and incredible potential, we’ll be investing $200 million annually in the region, through headcount, real estate investment and other expenses to support Uber’s local operations,” Lior Ron, head of Uber Freight, wrote in a blog post.
Since its launch three years ago, Uber Freight now has a team of hundreds, with offices in San Francisco, Chicago, and Amsterdam. And in July, the company announced it was going after its second European market with the launch of its trucking platform in Germany. The move puts Uber in direct competition with local startups like Berlin-based Sennder and the UK’s Zencargo and FreightHub. Sennder recently raised $70 million at a $300 million valuation and a wider presence in Europe. FreightHub raised $30 million in a Series B funding round.
The future of freight will depend much on digital, as these recent developments show.