Flexport Expands Convoy to Match Carriers and Brokers

Glenn Taylor

Tue, Jun 4, 2024, 2:14 PM 4 min read

Flexport is expanding the Convoy freight booking platform for brokers, months after resurrecting the trucking marketplace technology.

The launch is built to give brokers access to thousands of carriers across the U.S., in an effort to simplify freight execution and lower operating costs for brokers and carriers alike.

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Convoy’s app is built to automate the pairing of shipments with carrier owner-operators—which can save money for shippers, while reducing the legwork and hassle for carriers in finding loads to transport.

Prior to Flexport’s acquisition of the Convoy app and the company’s related intellectual property in November 2023, Convoy had been developing an app called Convoy for Brokers that started to gain traction.

According to Bill Driegert, Flexport’s executive vice president and head of trucking, the digital freight forwarder saw an opportunity to take this capacity base and expand on it with the updated launch, bringing more brokers on the platform during the pilot phase.

“Convoy built all this tech to run a broker, to run their internal operations. We said, ‘What if we take all that tech and externalize it?” Driegert said. “It also just plays into where I think the state of this market is going in the near term which is this wave of digitization, particularly for smaller brokers who maybe don’t have the resources to go big and build their own apps. For these owner-operators and small carriers, it’s really about how do they get access to this capacity pool, which is enabled through the app.”

Small-to-mid-size brokers, and even very large brokers at times, often have more difficulty accessing capacity when dealing with small owner-operators and small carriers because they are typically going through less-efficient legacy load boards.

Brokers can use the platform to maximize reach and effectiveness of carrier operations teams and automate manual tasks, including carrier negotiation, vetting, status updates, document management and payments.

This app can lower the carrier procurement and load management costs on the platform by as much as 90 percent, Flexport says, while expanding and diversifying load coverage across the country.

The launch aims to bring efficiency to the “long tail” of the trucking market, which Driegert describes as the carriers operating 10 or fewer trucks, and addresses pain points for brokers looking to efficiently partner with the massive pool of small carriers, who have shifted to app-centric operations and load management.

“Forty percent of the capacity in the market now is carriers in that long tail—10 trucks or less—which is typically a harder capacity to work with, and that capacity is typically engaging through load boards or other means with the brokers but it’s more transactional,” Driegert. “This really allows for those carriers to find more consistent work, have access to more freight and interact with the brokers in a much more effortless way.”

Driegert said mid-sized carriers are typically the “sweet spot” for brokers because there are thousands of them across the U.S. trucking market.

These mid-sized carriers don’t always get access to the best into the largest shippers and have to work with brokers to get more consolidation and aggregation of opportunities.

“It’s hard to say exactly how the market will change over time, but we have seen a shift of more capacity to that long tail,” Driegert said. “I do think that’s going to be an increasing percent of the capacity and it is because of these technologies.”

The Convoy platform also is built to help brokers monitor carrier risk and reduce fraud, theft, and unsafe behavior by leveraging machine learning models based on proprietary forensic data, which allows brokers to expand their network while minimizing risk.

“Convoy invested quite heavily in fraud. They were impacted like many in the whole 2022 surge, but the two quarters prior to winddown and since we’ve relaunched, we’ve had zero theft on the platform,” Driegert said. “We have a lot of unique information and data that we can pull into that because we have device-level information. Convoy builds quite a sophisticated set of AI tools and models that can predict risk of individual carriers. It’s something we run continually too. It’s not a static, one-and-done type evaluation.”

Convoy initially shut down as a standalone business in October, crumbling under the pressure of a wider freight recession characterized by a downturn in trucking demand and freight rates. On top of that, digital supply chain technologies like Convoy saw the well dry up for venture funding after interest rates escalated in 2022.

The funding largely propped up these firms as they sought high growth despite years of losses. Convoy itself raised $260 million in a Series E round in April 2022, which then brought the company’s valuation to $3.8 billion.

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Flexport Expands Convoy to Match Carriers and Brokers

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