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Convoy raises $62M from Bill Gates and other luminaries to transform trucking
- deleted 9y ago[deleted]
- threatns22999 9y agoHang on, let me get my crystal ball so you can feel safe and secure in the world again.
- spcelzrd 9y agoThat doesn't seem like a lot of money, especially for a capital intensive industry with notoriously low margins.
- 2_listerine_pls 9y ago> notoriously low margins. Some of those trucking companies take 10%. What are you talking about?
- nevir 9y agoFreight brokerages typically have margins around 15% https://www.quora.com/What-kind-of-margins-can-non-asset-based-freight-logistics-providers-expect https://www.quora.com/What-kind-of-margins-can-non-asset-bas...
- jobu 9y agoShipping is only capital intensive if you intend to own the trucks, trains, or ships. Convoy appears to be more of a middleman between owner-operator truckers and shippers or manufacturers. The problem is that many (most?) of the truckers that own their own rig are middle-aged and older, and getting them to use technology like this may be an uphill battle: “I think they’re relying too much on computers,” said Brian Larocque, a new driver based out of Connecticut.
- deleted 9y ago[deleted]
- jbeales 9y agoYes on both. I work in tech that services the trucking industry. Getting drivers, (and dispatchers, actually), to truly trust a computer is difficult. They use a lot of apps, but trucking's got a strong culture of self-reliance, and people working in trucking probably care more about single points-of-failure than DevOps do, relying on Convoy would be a pretty big single point of failure, so they'll have to prove themselves worthy of the trust. However, 82 million should get them there. That's a ton of money to build a business with no capital costs. The big risk for them is the incumbents deciding to move quickly - most of them have the cash, so if they realize their business model is threatened by Convoy, they'll move quickly, and be supported by their existing cash flow.
- Godzillaz 9y agoIt's basically an Uber for truckers. That's all they had to say.
- rootedbox 9y agoCoyote already does this. Got bought by UPS for 1.8 billion 2 years ago. Also Amazon, and Uber are working on competing products. So that 62m might not go so far.
- Mutinix 9y agoBezos is one of the investors.
- deleted 9y ago[deleted]
- josephv 9y agoSo much hate when Billy G's name is invoked. Freight forwarding is about as low-tech as it gets. Small commodity merchants, which can range from 1 person to "huge" commodity shops of 150 people, manually dial numbers of truckers to pick this up and haul it there, all the while making sure their peanuts or cotton or soybeans are in reasonable conditions as food an agricultural products are fairly heavily regulated. It's a hugely complex problem with Djikstra's shortest path being approximated in a distributed system of humans interfacing with phones interfacing with other humans. I assume they are working on an uber clone for freight forwarding. And now to start working on an uber clone for freight forwarding.
- 2_listerine_pls 9y ago> So much hate when Billy G's name is invoked. No comment has even mentioned Bill Gates yet. > It's a hugely complex problem with Djikstra's shortest path being approximated in a distributed system of humans interfacing with phones interfacing with other humans. huh? what are you talking about?
- josephv 9y agoThe first few comments were about the futility of the funding. Weighted shortest path algorithms are regularly used in the freight forwarding space in order to calculate the rates paid for routes. Knowing it off the top of my head is how I got a job at a medium-sized commodity trader. Seeing those rooms full of people securing transport for goods we either owned or were moving for others is what makes me think it could be a reasonable idea.
- deleted 9y ago[deleted]
- remarkableboard 9y agoI've been fortunate to learn about Convoy and speak with employees involved recently. Convoy is the real deal and making this Uber for Trucking idea work. They're backed by Bezos, Reidman, and many other high profile investors. If any company were to crack the 800Bn trucking market, Convoy is looking like the one.
- aresant 9y agoWalmart just lightly threatened carriers & owner operators that if they work for Amazon they can expect lower priority from Walmart in the future (1) Walmart presently represents ~14% of the total capacity of one of America's largest carriers - Swift transport - and likely similarly important elsewhere. (2) Obvious outcome down the road is that one of these behemoths snaps up a convoy / other plays in the space to secure capacity. But would they rather buy an "asset light" business like Convoy, that has no actual trucks / drivers / or control, or will they be more interested in an "asset heavy" carrier that has technology / driver / and trucks? (1) http://www.dcvelocity.com/articles/20170627-wal-mart-warns-motor-carriers-to-stop-hauling-amazon-loads-consultant-says/ http://www.dcvelocity.com/articles/20170627-wal-mart-warns-m... (2) http://www.zerohedge.com/news/2017-06-28/it-begins-walmart-warns-truckers-it-will-no-longer-work-them-if-they-move-goods-amaz http://www.zerohedge.com/news/2017-06-28/it-begins-walmart-w...
- projectileboy 9y agoKind of tangential to the discussion here, but Walmart's threats are empty. Amazon is currently constrained by trucking capacity, and would gladly swallow up more.
- mv4 9y agoI do think Walmart is paying attention to this.
- anon4728 9y agoAmazon should buy FedEx because UPS is awful and they need to grab the last mile business since more things are going to be sold online only.
- amelius 9y agoI'm wondering if "Convoy" could ever become a trademarked name, since it is so generic.
- jahewson 9y agohttps://en.m.wikipedia.org/wiki/Convoy_(1978_film) https://en.m.wikipedia.org/wiki/Convoy_(1978_film)
- kreutz 9y agoI was under the impression YC Continuity existed for the sake of investing in later stage YC companies. Convoy is not YC company. Is YC Continuity just a generic fund now?
- mkoryak 9y agoI used to work for startup called OpenMile in 2012. We were trying to do pretty much the exact same thing. We might have been too early, but it was hard. We had the tech, but the trucker and other brokers were not very tech savvy. The margins were low and there was too much hand holding. Best of luck to them.
- mv4 9y agoHow far did you get? Were you delivering shipments?
- mkoryak 9y agowe were a high tech broker. yes we did loads, but we could never figure out how to set good margins.
- thephyber 9y agoThe article states that truckers lose up to 25% of the job price to freight brokers (obviously a ceiling). Were your margins far smaller than that? It seems like the reputation feature and the ability for truckers to find a load on shorter notice would be incredibly valuable. I'm guessing if a broker is already making $13b in revenue, they've already experimented with some similar evolutionary changes to their negotiation process.
- phrogdriver 9y agoI used to work at a startup called Trusker doing the same thing, I can't give your comment enough up votes on 1. not very tech savvy, 2. margins were low, 3. too much hand holding and I would add 4. a 1200 mile trip between commercial locations with weird hours and instructions is nothing like the intracity taxi markets.
- deleted 9y ago[deleted]
- hourislate 9y agoThis type of system already exists. Their are plenty of exchanges where truckers or trucking companies can get matched with a load or pickup work. I don't understand what makes this so transforming?
- prodmerc 9y agoDeep pockets.
- hyperpape 9y agoI don't know about the load boards themselves, (of which there are many), but there are a lot of companies in the logistics space. $62 million isn't that much. Not saying whether they'll succeed, but saying deep pockets will do it doesn't make sense, IMHO.
- frandroid 9y agoNext up, they will hit up on the idea of dedicated roads for truck convoys; also, a single engine to pull them all; and finally, the creation of roads with steel rails to put the trucks on.
- prodmerc 9y agoI don't know why you think they want trains, but they're likely to move to self-driving trucks, just like Uber.
- ourmandave 9y agoI would agree, but I think the problem with trains is you have to load and unload the containers onto railcars. I've seen UPS and FedEx semis pulling 3 short trailers on interstates. I assume they're only limited by current regulations on weight and length.
- ams6110 9y agoTriple trailers are only legal in some states and turnpikes.
- kbart 9y agoTrains are very efficient when you need to move huge volumes between industrial centers, ports, metropolises etc. but we still need trucks for the end mile or else good luck laying tracks to every country shop out there.
- jessaustin 9y agoTravel by interstate sometime, and you'll note that "end mile" trucking is a tiny fraction of the total. Of course this is because of the vast subsidies that truck freight enjoys. If we get the self-driving thing figured out, I expect that last-mile freight will use fewer actual trucks than are used today. Rather, the typical robofreighter will be quite small. Every time I receive a truck freight delivery, the trailer is basically empty. They use a big tractor-trailer rig because they have to hire a driver anyway, and sometimes they have enough freight to fill the trailer.
- prodmerc 9y ago"We don’t think there are any other companies that have taken the same approach" I distinctly remember a service/app with the same purpose in Europe in 2013. There's Cargomatic and mentioned by mkoryak, OpenMile. And probably others. Money will definitely help here, though.
- mv4 9y agoYep, we launched one: https://cargofone.com/en/ https://cargofone.com/en/ Money helps, but it isn't the only thing.
- DenisM 9y agoCan I pick your brain? Sooo grateful I will be... email in profile
- mv4 9y agoEmailed.
- prodmerc 9y agoWell, add Cargofone to the list. The one I remember, though I can't for the life of me remember it's name, was operating around Benelux, mostly Belgium, France and Netherlands. The truckers I knew mostly used it to find nearby matches for return trips (so they don't make a return trip empty). I don't know what happened to them.
- mv4 9y agoI've seen a few names, but the ones I saw were essentially message boards - proceed at your own risk. With Cargofone, every driver/company passes background checks, we insure everything automatically (via partnership with a large insurer), and we guarantee immediate payment. The aren't many that do all this.
- mv4 9y agoYes, similar systems do exist. My team made one of them: https://cargofone.com/en/ https://cargofone.com/en/ In some ways, it's more challenging than building "an Uber", once you get into different cargo and body types, document management, insurance, etc. We launched in Russia first, and not being able to do electronic signatures added a set of challenges. In any event, glad these investments are happening. Trucking is badly broken, especially in the US.
- pnathan 9y ago> Trucking is badly broken, especially in the US. why do you say that?
- mv4 9y agoAccording to friends in the business: - hard to make money - people work too much and sleep too little - various abuse by trucking companies For a more methodical analysis - USA Today did a piece a month ago: https://www.usatoday.com/pages/interactives/news/rigged-forced-into-debt-worked-past-exhaustion-left-with-nothing/ https://www.usatoday.com/pages/interactives/news/rigged-forc...
- adventured 9y ago> hard to make money That's not a supporting premise for something being badly broken. Amazon has found it hard to make money in retail, as have Walmart and Costco (2% to 3% razon-thin net income margins). Most retailers find it extremely difficult to make money. That's not necessarily because the business is badly broken. It means the margins are being competed away, which is tremendous for other parties (consumers for one). Lots of industries / segments have the same problem and always will.
- simonh 9y agoIn the case of Amazon those thin margins are mainly due to massive re-investment expenses to grow capacity, not competition. The question is if or when they might be able to reign back the investment without risking losing competitiveness with rivals.
- pg_bot 9y agoSpeaking as the son of a trucker who spent a summer helping my dad negotiate and optimize his freight rates and schedules, the freight brokerage business is not one I would consider getting into. There is also a ton of competition in the freight brokerage space and the problems associated with shipping are due to poor warehouse management and unreliable truck drivers. Unlike hailing rides in a taxi, manufacturing and shipping generally holds a regular schedule. If you build a reputation as someone who always shows up on time, you can make a lot of money as a truck driver (more than most programmers). After building a good reputation you cut out the broker and work with the manufacturers directly. All you need to do is find two manufacturers in a high paying industry, (pharmaceuticals, chemicals, specialized plastics) whose pickup and dropoff points are near one another and you can be set for years. Most poorly run warehouses can be backed up for 4-6 hours before you can begin unloading. Most standard contracts allow 2 hours from the point of arrival to fully unload your truck. We would negotiate our billing like a lawyer. For any additional time after that grace period we would charge in hourly blocks at over $100 per hour. Companies try to abuse their power by wasting the time of drivers by not paying them to sit idle at their warehouses. Amazon and Walmart are notorious for these practices. I think there is a lot more money to be made using technology to run a high tech fleet of trucks than there is a freight brokerage company. Trucking is an information game for sure but there is too much competition in the freight brokerage space and you can be easily side stepped by savvy truckers.
- mv4 9y agoI feel that for most companies playing in this space, freight brokering is just a transitional step. It can't work long-term, just like Uber can't be viable without self-driving cars. However, it's the best way to understand how the industry operates - if you're serious about disrupting it.
- irishasaurus 9y agoThis really is the other side of the automated trucking coin. This way they can build enough of a network to start brokering freight for autonomous trucking companies and hiring short distance truck drivers, much like pilot/captains in shippng.
- Paul-ish 9y ago>“Like I said, I would rather have [the brokers] go through all of the headaches than me. It’s bad enough what we are dealing with out here on the roads than to be worrying about that.” This seems to imply that there is something traditional brokers do that Convoy is now putting on the driver. Does anyone know what that is?
- mkolodny 9y ago"Uber for trucking"... Uber already has an Uber for trucking [0][1]. And it's doing very, very well. [0] https://www.wired.com/2017/05/uber-freight/ https://www.wired.com/2017/05/uber-freight/ [1] https://medium.com/official-uber-freight-blog/uber-freight-leveling-the-playing-field-for-americas-truck-drivers-73530215a1f1 https://medium.com/official-uber-freight-blog/uber-freight-l...
- WisNorCan 9y agoIt looks like Convoy started far before Uber [0] and Uber has been trying to catch-up to Convoy. I wouldn't believe what Uber says. [0] https://www.geekwire.com/2016/greylock-leads-16m-round-demand-trucking-startup-convoy-reid-hoffman-joins-board/ https://www.geekwire.com/2016/greylock-leads-16m-round-deman...
- mv4 9y agoUber for Freight only officially launched last month. Check their app reviews (both iPhone and Android), more than 1/3rd are one star, citing various issues. What makes you think they are doing very well?
- malandrew 9y agoJust checked both apps in the iOS store and Android Store. On the iOS Store, 4 stars out of 5 based on 31 reviews for all versions. Not enough reviews for current version. Only 4 are 1-star reviews. That's 12.9%, not 33%. On the Android Store, 3.4 stars out of 5 based on 139 reviews. 53 are 1-star reviews, so 38%. Many of the 1-star reviews were Uber haters and people complaining about low rates. The latter I expect to become the norm once technology streamlines the industry, whether its Uber, Convoy or some other company that does it. Only a few 1-star reviews actually report a bad experience with the app that isn't related to rates. Based on both stores, 30% are 1-star ratings, so it's about 1/3 1-star reviews across both stores. I really wish the app stores made an effort to cull obvious haters and fanboys so that only legitimate reviews were left. People gaming app store reviews are just hurting the people who would derive the most utility from choosing the best application for them. For comparison, Convoy Driver in the Android store has 4.1 stars based on 51 reviews. In the iOS store it has 4.5 stars based on 12 ratings. Several of its 1-star reviews make the same complaint about the same low rates. Both Uber Freight and Cargo Driver each have 10,000-50,000 installs in the Android Store, and the fact that Uber Freight has 2.6x the number of Android and iOS reviews based on only 1-month of operations versus almost 2 years seems very solid to me. Convoy's first review in the Android store is from all the way back in October 2015.
- 47 9y agoA bit of tangent, But i am in the market for the Software that Convoy and CargoFone are building. We have our own FT, LTL and Final Mile Carrier network. We have negotiated custom rates with them. What i am looking for the Software service through which i send Orders and get updates from these Carriers. Is there a solution like that out there?
- edorsey 9y agoI'm in charge of Product at Freightview (https://www.freightview.com https://www.freightview.com). We work exclusively with companies that have existing rates setup. Would be glad to chat.
- mv4 9y agoLet's chat. Contact info in profile.
- jzisk32 9y agoNot exactly sure if we have what you want but we have a cloud based order management system. We receive your orders and then route them to the appropriate facilities for shipping. We can also integrate with Carriers for rates. Check out www.snowfalltech.com or email me at jzisk@snowfalltech.com. Thank you, Jeff Zisk, CEO
- deleted 9y ago[deleted]
- sd_mikey 9y agohttps://auptix.com https://auptix.com has a platform that optimizes LTL. They've been up and running for a while and have good volume.
- pissedycfounder 9y agoYC companies beware. YC "Continuity" will come talk to you to learn the ins and outs of your business and then go fund a non-YC competitor. The whole idea of the fund was to use it to support YC companies at the next stage but now they're funding companies like Convoy that compete with YC companies like Flexport, while using their access to the YC businesses to do diligence. That's fine, normal investor behavior, but you can't treat YC like trusted insiders any more (prob never should have).
- deleted 9y ago[deleted]
- WisNorCan 9y ago“Flexport is a licensed freight forwarder that uses people and software to manage the complexity of international trade.” Do these companies really compete? It doesn’t seem like Convoy is focused on international trade. It also doesn’t seem reasonable that if YC funds one company in transportation (or healthcare or some other big sector), they can never fund another one in that sector.
- jamiequint 9y agoFlexport and Convoy are completely different businesses. Did this actually happen to you or are you just making up drama?
- malandrew 9y agoWhile Convoy Driver app has slightly better reviews than Uber Freight in both app stores (iOS 4.5 stars vs 4.0 stars, Android 4.1 stars vs 3.4 stars), both Uber Freight and Cargo Driver each have 10,000-50,000 installs in the Android Store and Uber Freight has ~2.6x the number of Android and iOS reviews. The number of installs and reviews for both is especially remarkable because Uber Freight has only been available for about a month, while Convoy Driver has been available for about 1.5 years now.
- edoceo 9y agoAges ago Microsoft purchased another company called Convoy, the product was merged to NT4SP6 and Windows 2000 as the Network Load Balancing component.
- WisNorCan 9y agoI would assume YC, Greylock and others have wide access to deals and have many opportunities to invest. Knowing how VCs operate I am assuming that they looked at the top companies in the sector before deciding on this company and teams. It seems like several companies have tried to go after this market with technology, but Convoy has the best backers and most momentum. I wish them the best of luck!
- losteverything 9y agoI just wish they could find a way to get Mallomars to the stores in the summer
- sanxiyn 9y agoChina seems to be ahead here, for example see https://www.bloomberg.com/news/articles/2016-12-22/china-s-uber-for-trucks-huochebang-fetches-1-billion-valuation https://www.bloomberg.com/news/articles/2016-12-22/china-s-u...
- real-hacker 9y agoNo one talks about self-driving trucks like Otto? Truck drivers' life won't be easier.
- DonHopkins 9y agoOn the topic of the transforming and optimizing the future of trucking, just last night I watched a so-bad-it's-good movie called "Space Truckers", which was mentioned in the "Crapularity Hermeneutics" paper and that I had to see for myself: "(This scenario has countless precursors in popular science fiction, including for example Stuart Gordon’s 1996 movie Space Truckers in which the protagonists transport square pigs that have been genetically modified to make more efficient use of limited spaceship cargo capacity.)" http://cramer.pleintekst.nl/essays/crapularity_hermeneutics/ http://cramer.pleintekst.nl/essays/crapularity_hermeneutics/ https://en.wikipedia.org/wiki/Space_Truckers https://en.wikipedia.org/wiki/Space_Truckers
- wodenokoto 9y agoAnd here's the trailer for Space Truckers [1], truly looks like a B-movie that isn't willing to admit it. [1] https://www.youtube.com/watch?v=IerJF2xKwuo https://www.youtube.com/watch?v=IerJF2xKwuo
- DonHopkins 9y agoI was hilarious, but I don't think they were prepared to admit it was a comedy, either.
- wodenokoto 9y agoAbsolutely true. I kinda assumed the comedy category was added after the fact, but I haven't seen it, so maybe marketing didn't agree on it being a comedy.