FreightWaves’ Craig Fuller and JP Hempstead discuss Convoy’s recent closing with Zebox’s Liz Ward at the F3: Future of Freight festival on Tuesday in Chattanooga, Tennessee. (Photo: Jim Allen/FreightWaves)
Thank you for reading this post, don't forget to subscribe!CHATTANOOGA, Tennessee – Despite one of the most unprecedented downturns in transportation and logistics history, Convoy Inc.’s ultimate legacy is that it shook up the freight industry by bringing technology innovation and investment to the space.
Seattle-based startup digital freight broker Convoy announced in a letter to employees on Oct. 19 that it was ceasing operations due to a “massive freight slowdown.”
“I would argue that a lot of people in this room wouldn’t be as scared if Convoy hadn’t done this,” Craig Fuller, CEO and founder of FreightWaves, said during F3:Future, which was injecting investment-grade venture capital into the space ” of Fright Festival on Tuesday. “What’s interesting about it is that it’s not just the venture capital-backed companies, but it’s the way that the incumbents were forced to respond, that J.B. Hunt… was certainly a company that Arguably the most successful digital platform ever created, and it was massive, it’s part of a response to some of the competitive interest that startups are getting.”
FreightWaves’ second annual F3: Future of Freight Festival brings together experts, entrepreneurs, industry leaders, educators and others to discuss the key factors impacting freight markets and the latest trends driving the industry forward. The event will continue through Thursday in Chattanooga, Tennessee.
Fuller was part of a fireside chat discussing the convoy’s legacy and impact on the freight industry. He was joined on stage by FreightWaves’ JP Hempstead and Zebox America head Liz Ward.
Convoy was founded in 2015 by Amazon veterans Dan Lewis and Grant Goodell. The company went out of business in the first quarter of 2022 at a valuation of about $3.8 billion in a little more than 18 months.
“I would say [Convoy’s legacy] Really positive,” said Ward, who served as the digital freight brokerage’s business development director from 2016 to 2018. “I think they were very pioneering in a lot of ways for this whole sector. They created great technology, they advanced communication. We won’t talk about half the stuff we’re talking about right now. They made it interesting, they gave us all kinds of businesses that came out of different concepts of Convoy.
Ward said what attracted him to join Convoy in 2016 was the company’s cutting-edge approach to the freight transportation market.
“I was working trucking at the time and Dan Lewis called me. … He said, ‘I’m building the best trucking company in the world, come join me,’” Ward said. “I remember sitting with Dan. I said, ‘What makes you so different from every other broker?’ He said, ‘My engineer.’ I think that was a really good tipping point in trucking, thinking about the business and the engineering aspect of automation and how powerful it can be for the industry at large.
Hempstead, who researches multimodal freight markets for FreightWaves, said Convoy brings new levels of cutting-edge technology and brilliant minds to the freight industry.
“One of the legacies is to bring a certain level of professionalism to the city and technical talent into the industry, especially if it’s brokerage, and show transportation providers how to lead with technology products,” Hempstead said.
Convoy’s eventual demise may have been due to it focusing too much on technology while ignoring its long-term business model and how it might respond to a volatile market, the panelists said.
“The industry has said that one of their big complaints or issues with Convoy’s business model was that in the early days of the business, it was essentially buying market share. “Did you see where they were underselling other providers in the market?” Fuller asked Ward.
Ward responded that during her time at Convoy she focused on business development and account management growth.
“We were really dialed in, like, ‘We’ll be the last backup option for you, whenever your primary secondary carrier fails, we’re there,’” Ward said. “We will be moving a lot of freight that may not be the best freight. There was a reason it was being rejected by all types of carriers. This was a way that we were able to grow our wallet, grow our share with these customers. It was good and bad. “It was a good start, but where we probably went wrong was trying to fix that with higher than contract rates.”
Hampstead said that with Convoy gone, the freight industry would not have seen the last of the company’s pioneers.
“I hope Convoy veterans will find more companies,” Hempstead said. “I hope there is a second wave, maybe Convoy Mafia. Normally, they follow successful exits, but we’ll see what happens.
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Source: www.freightwaves.com
