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Trucking represents a $ 740 billion industry and is based on old technology.
When a small trucking company or a trucker who owns his own vehicle needs a cargo to carry, it is not uncommon that they depend on "voice brokers", who call warehouses and ask if they can transport goods. About 15 to 25% of the time, the trucks do not carry anything.
It's slowly starting to change. Trucking companies, big and small, are turning more and more to apps to see what's available and bid directly to their phones or computers for these jobs.
One of these applications is Convoy, a Seattle-based start-up valued at $ 1 billion. Unilever and Anheuser-Busch InBev are among its customers looking to improve the efficiency of the freight brokerage process.
"Many people in Silicon Valley talk about automated driving as the biggest change in transportation," said Dan Lewis, CEO of Convoy, at Business Insider.
"If you look at the opportunity now, it really is about the efficiency of the networks and the efficiency of the brokerage process."
Convoy announced its latest round of financing Friday, totaling $ 185 million. CapitalG, the growing Alphabet equity fund, led the series of investments. YCombinator, Salesforce CEO Marc Benioff, and T. Rowe Price Group also invested in Convoy.
This is not the first Alphabet step in the trucking industry. Waymo, its autonomous driving division, has launched drivers of its autonomous trucks in Georgia, Arizona and California.
A highly fragmented industry – and ready for the break
Many technology companies join Alphabet in the trucking industry. There are Uber Freight and Tesla Semi, as well as startups with strong investor support such as Transfix, Trucker Path and Keep Truckin.
Many of these start-ups were created by actors outside the logistics sector and sought to disrupt it. For example, the co-founders of Convoy, Lewis and CTO, Grant Goodale, were recently at Amazon.
And while many of these startups are interested in the technology of self-driving, most of them seek to solve existing problems in the trucking industry.
Keep Truckin, for example, provides electronic registration devices to over 40,000 parks so businesses can track their employees on the road. Convoy, as well as Uber Freight and Transfix, connect truckers and trucking companies to the shippers themselves.
Trucking is a highly fragmented sector where small businesses and individual owner-operators dominate; The top five logistics companies in the United States together hold only 20% of the market share. According to Lewis, the average trucking company has only three or four trucks. These small businesses are less well equipped to make sure their trucks are always on the move.
"If you are able to manage the brokerage system more efficiently, truckers can get more jobs per year," said Lewis.
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