Transcript
Convoy is a Seattle-based transportation technology innovator that works to fix inefficiencies in one the largest sectors of 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 are digital transformations so important in this sector?
Juliet Horton: Paul, thank you for having me. Trucking is a $800bn industry in the US that powers every aspect our economy. This has been made even more evident by the global pandemic.
Despite being a critical business, it is plagued by inefficiencies and has not changed much in the past few decades. This is a problem to shippers as it prevents them from having full access to all the capacity in the country. It also means that they don’t have the best prices or the best scheduling options. Inefficiencies in this market can also cost carriers their ability to find the best jobs to suit their schedules and maximize their earnings.
Secondly, this has serious implications for our environment. One third of the 175 billion mile traveled by truckers in the US each year is empty. This results in 87 million tonnes of carbon being released into the environment.
This is why we see it as such an important industry to invent in, both for our customers’ benefit and for our environment.
World Finance: What is a digital freight network?
Juliet Horton:A digital freight network is an open, connected freight marketplace that uses software automation and machine learning to streamline every stage of the process.
We began to think about how we could build products and services that would meet the needs of our customers in two key areas. The first is efficiency. We want to automate every aspect in the shipment lifecycle and drive efficiency. Customers will benefit from our savings.
Transparency is the second part. Transparency means that shippers have better insight into their network’s health, the status of their shipment, and the ability to run their business more efficiently. For carriers, this means that they have access to every opportunity in their market so that they can optimise their schedules and make the most of it.
Our business is like a flywheel. As such, we can become more efficient the larger we get. The more shippers that we bring into our network, we have more loads available for carriers. That attracts more drivers onto our network. We are more likely to match that load with the best truck driver at the best price, saving shippers time and money.
World Finance: How does your technology achieve transparency and efficiency?
Juliet Horton: We used technology in two main ways. The first is automating every step of a shipment’s lifecycle. When you think about the entire process from the moment a producer creates a product to when it reaches consumers, there are many steps. We wanted to automate every step. We are currently able to automate 100% of our pricing and matching decisions within our target markets. We looked at all the work involved and tried to make it as efficient and fast as possible. The second approach was to build new businesses to rethink the freight industry.
Convoy Go, our drop-and–hook service, is one of our businesses. This allows us to decouple loading a trailer and transporting it. This allows shippers to load up a trailer according to their own schedule and at their convenience. The carrier does not need to be present to transport the trailer.
The carrier can fit more shipments into their schedule, and they are able to maximize their earnings. These trailers were also equipped with smart technology by our Convoy Go network. We have great insight on which shipments were sent back to shippers, giving them transparency into their network and allowing them to optimise their business.
