How Convoy is transforming trucking and protecting the environment
The transport technology innovator is building a 'digital freight network' to automate every step of the shipping process
Convoy is a Seattle-based transport technology innovator, working to fix the inefficiencies in one of the largest industries in the US – trucking. Worth an estimated $800bn a year, it is the lynchpin of American logistics – but, explains Convoy’s Juliet Horton, it hasn’t evolved in decades, and is rife with inefficiencies. She outlines Convoy’s approach to disrupting the industry: using automation to match shipper loads with carriers, reducing the number of empty miles travelled, and slashing the carbon cost of trucking.
World Finance: Why is digital transformation so critical for this sector?
Juliet Horton: Thanks for having me, Paul. Trucking is an $800bn a year industry in the US, that powers every aspect of our economy. Something that’s only become more clear in recent years, throughout this global pandemic.
Yet despite how critical this business is, it is riddled with inefficiencies, and hasn’t evolved very much in the last several decades. This is a problem for shippers, because it doesn’t allow them to have full access to the capacity across the country, and as a result doesn’t give them the best prices and the best scheduling options. Conversely for carriers, inefficiencies in this market cost them the ability to find the best jobs that would work for their schedule and allow them to optimise their earnings for themselves.
Secondly this has major consequences for our environment. In the US truckers log 175 billion miles every single year, a third of which are driven empty. That results in 87 million metric tonnes of carbon emitted needlessly into our environment.
So we see this as such a critical industry to innovate in, both for the benefit of our customers, and our environment.
World Finance: You’re creating what you call a digital freight network – what does this mean, and what does it achieve?
Juliet Horton: A digital freight network is an open, fully connected freight marketplace that uses software, automation, and machine learning to streamline every step of the process.
So we’re thinking about building products and services for our customers that hit two key areas that they need. The first is efficiency: that means every aspect of the shipment lifecycle we’re looking to automate and drive efficiency in, and as a result pass our savings along to our customers.
The second piece is around transparency. This means giving shippers better insights into the health of their network, the status of their shipments, and allowing them to most efficiently run their businesses. And for carriers that means giving them the transparency into every opportunity that exists in their market for them to optimise their schedules and earn as much as possible for themselves.
We see our business as a flywheel, meaning that we can become more efficient the bigger that we get. The more shippers we bring into our network, the more loads that are available for carriers: that attracts more carriers onto our network, and the more truck drivers that we have available, the more likely we are to match that load to the best driver at the best price possible, saving shippers money.
World Finance: How does your technology actually achieve that efficiency and transparency?
Juliet Horton: We’re using technology in two key ways. The first is to automate every necessary step of a shipment lifecycle. So when you think about everything that has to happen from when a producer creates a good before it gets into the hands of consumers, there are countless steps in that process. And we’re looking to automate each and every one of them. Currently we’re able to automate 100 percent of our pricing and matching decisions in our target markets. So we’re looking at everything that has to be done and trying to make it as fast and efficient as possible. And the second way is that we’re building new businesses to rethink how the freight industry works.
One of our businesses is called Convoy Go, which is our drop-and-hook service, that allows us to decouple the loading of a trailer and the transportation of a trailer. This means shippers are able to load up a trailer on their own schedule, at their own convenience. And the carrier only has to be on site to actually transport that trailer.
So there’s less downtime for the carrier, they’re able to fit in more shipments into their schedule and maximise their earnings. And within our Convoy Go network, these are our trailers that we’re able to equip with smart technology. That means we have great insights on the status of shipments that we’re able to send back to the shipper, give them transparency into where everything in their network stands, and allow them to optimise their business.