Announcing Convoy’s Partnership with Kevin Rutherford
Carriers • Published on May 13, 2018
Today, we are excited to officially announce our partnership with Let’s Truck and Kevin Rutherford. Convoy and Let’s Truck share the mutual goal of creating a better trucking experience by empowering carriers and making their businesses more successful. Together, we believe that both Convoy and Let’s Truck will be better positioned to enable carriers to succeed in their business endeavors.
This Friday, Convoy Co-founder and CEO Dan Lewis will make a guest appearance on Let’s Truck with Kevin Rutherford, where he will discuss the origins of Convoy, it’s carrier-focused evolution over the past three years, and his vision for the future. In addition, he will answer questions from listeners that call into the show. Dan will be the first of several guest speakers from Convoy who will be joining Kevin to discuss the topic of Technology and Trucking. By addressing this topic, Convoy and Let’s Truck aim to empower truckers everywhere to optimize their business.
You can listen to the entire conversation on SiriusXM Radio Channel 146, starting at 9:00 PM PST on Friday, 11 May.
Update as of May 31st
Read the full transcript below:
KEVIN: Welcome back. I’m Kevin Rutherford. The number to join us, 8888 Road Dog. Speaking of joining us, joining us right now, as promised, we got the CEO and co-founder of Convoy, Dan Lewis, with us. Dan, welcome to the program.
DAN: Thank you. Thanks for having me on.
KEVIN: Hey, before we get down to the important stuff, I want to talk about Convoy and your technology and what makes you different and all that, but I have a serious question for you first.
DAN: All right.
KEVIN: I saw this in the news the other day. You know, Let’s Truck and Convoy were partnering up on some things, now working together, so what I’m wondering is can I now get backstage passes to see Bono?
DAN: [Chuckles] We’ll have to talk offline about that.
KEVIN: Okay. [Laughter] Okay, I happened to see that, the news, and I thought it was one of the –
DAN: I’ll give you the phone number to call. I’ll give you the phone number to call.
KEVIN: There you go, okay.
DAN: They just hand them out. So, I can’t talk about it live on the air there.
KEVIN: Got it. Okay. You know, I read a ton of trucking news every morning, and I thought that was one of the more unusual headlines I came across, that Bono was invested in Convoy.
DAN: Yeah, it’s interesting. You know, their whole business is entertainment and trucking. There’s a show on the road, right, so he’s got to get a bunch of different cities, which, you know, it’s got to be pretty tight, and I think that they just really actually understand how important it is, so it kind of makes sense.
KEVIN: Yeah, that’s excellent. So, give us some background. Where did you come from? How did you end up here?
DAN: Yeah. I’m from Seattle, Washington, originally. I grew up in a family that had a small office supply distribution company out of a town just outside Seattle. So, I guess from an early age, I was sort of involved in distribution and logistics. It wasn’t something I thought I was going to do the rest of my life. Then I did a bunch of other stuff, some in technology, some in transportation and warehousing, and I was in Amazon.
I remember thinking, you know, it’s great – I used to just go to the store and buy stuff the day I needed it. You know, you procrastinate, you hang out, wait till you need it, go there the day you needed it for, and all of a sudden, you could buy it online. You get to decide: Do you buy with the convenience of the line online and wait five to seven days to get it or do you go to the store? And then all of a sudden, that five to seven days became three days, and then two days, and one day, and you know, distribution was really taking over retail, for example. How fast something was delivered mattered, and that became the most important thing in retail.
And so, when I saw that happening, I kind of stepped back and looked at the impact on all these different companies and how important the supply chain was and how important transportation and distribution was, but how it was just becoming more and more of the thing that mattered, and so I wanted to go start a business to help bring that forward and look for opportunities to build a company around that.
KEVIN: Fantastic. You know, it’s interesting because I just got back from a pretty long road trip, 12 weeks, 8,000 miles, a bunch of events I did with my coach, and I experienced what you just talked about firsthand. I live in a tiny, little town outside of Portland, so new technology isn’t coming here anytime soon. But while I was on the road, I was in places like Fort Worth and Minneapolis and Palm Desert, and I was shocked at how things have changed.
So, you talked about, you know, we went from waiting five days to three to two to one, and in many of these major cities, I experienced same-day delivery from Amazon. I could go on Amazon’s website –
DAN: You almost [00:04:05], right?
KEVIN: I know. I could go on Amazon’s website –
DAN: And you thought, you know, that’s not fair.
KEVIN: Yeah. And I thought, “This is crazy!” I can order it that noon, it’s here by 3:00 in the afternoon, and I didn’t have to get out of my seat. And then another service, Instacart, which is a grocery delivery service, I could go online, order groceries or supplies from five or six different stores and sometimes I could get it delivered within the hour.
DAN: That’s amazing. Yeah, I mean, you know, it used to be – I mean, it still matters obviously but before it was the location that mattered, how convenient the parking was, whether or not the sales staff in there were talking about how the items were laid on the shelf. That all still matters, but actually now it’s like “Can you get it to me in an hour?”
DAN: I think we – when I saw that, I kind of had this moment, it hit me in the face, I was like, “Wow, the supply chain just won.” Like that’s the thing that matters now. And so, you know, everybody’s going to have to react to this. This isn’t just an Amazon thing; this is everything.
And so, I wanted to go explore that. I ended up – I left, I just quit and spent about two months in distribution facilities, warehouses. I went to a bunch of truck stops, I spent a lot of time just talking to people about what they were doing, how their business was changing, and kind of learning about, you know, where today and with technology, where there might be an opportunity.
So, yes, I’ve definitely seen that stuff, and that’s what really inspired me to figure out a way to – listen, one thing I’ll say is a lot of the startups, a lot of the companies in the technology space focus on the last mile, which is Instacart, for example, you know, last mile getting it to your home. And so I thought, DoorDash and Instacart and 10, 20, 100 other companies doing these last mile deliveries, and I realized, you know, actually the middle mile and the first mile are pretty damn important –
KEVIN: That’s right.
DAN: And you’d have to build some flexibility. If you can’t build flexibility, efficiency, into those segments, it’s going to be really expensive and really hard to improve that last mile experience.
So, that’s only in one category of transportation, but that’s kind of was pretty inspiring to think about, all of the other layers that have to work together really well so you can get that, you know, doughnut in an hour.
KEVIN: Absolutely. And it’s interesting. If I look at my first 30 years in trucking, transportation, the names almost never changed. For 30 years, very seldom did you see a new player. You saw the current players get bigger and bigger. And we all knew the names, you know, the big trucking companies, the big brokerages, they were stable companies, nothing hardly ever changed for 30 years. In the last five, when did we ever think we’d be talking about trucking and using companies like Uber, Amazon, Convoy? That didn’t even exist, and now they’re –
DAN: And Tesla.
KEVIN: Tesla, there you go. There’s another one. Yeah, it’s just crazy change and disruption, which has been a huge part of what I’ve been talking about for a couple of years now. And it’s what led me, you know, to seek out Convoy. I researched all what they’re calling the digital brokers and looked at the traditional brokers that are trying to figure out how to make technology work for them. And after looking at everybody, I kind of decided I wanted to partner with you guys. I like what you’re doing, I like the mission of the company, the way you’re executing it. So, first off, congratulations. You’ve done some amazing things in a very short period of time.
What I’d like to do – we kind of know where you came from. There are a lot of people who still don’t really understand a lot of this change. What is a digital broker? I mean, when we say that, you know, a lot of people didn’t even know what a traditional broker does, and now all of a sudden there’s this whole new category.
So, what I’d like to do, we’ll take a break and when we come back, let’s talk about the process. Rather than trying to explain all the technology, let’s talk about the process. If I were a carrier—and I encourage my listeners all the time—if you’re a carrier, find a couple of good brokers, build good relationships. If they wanted to get started with Convoy, let’s talk about that process and why it’s different. You know, what’s going to be different running under the Convoy technology?
So, we’re going to get to a break. When we come back, Dan and I will talk about what Convoy is all about, if you wanted to get started, what makes them different. We’ll do that right around the corner. 8888 Road Dog is the number, if you want to join us. I’m Kevin Rutherford. We’ll be right back.
KEVIN: Welcome back. I’m Kevin Rutherford. Dan Lewis is here with me. He’s the co-founder and CEO of Convoy, the new digital broker. Dan, kind of walk us through the process. If I had my authority and I wanted to get started with you, how’s that going to work? What’s it going to look like?
DAN: Yeah. The easiest thing to do is to go to Convoy.com and you’ll see a couple of different places to sign up as a carrier. You’d give us some of your information, you know, your MC number, etc. Then what happens is we would ask you a few questions on the website around what kind of freight you like to move or you like to run, how many trucks you have, your preferences.
And pretty simple, you get your information, you kind of accept the terms of the agreement, which is basically our carrier contract, and start working together. And then after that, we would learn more and more about your business based on the types of jobs you accept, based on the work you do, where you run. We would sort of offer jobs that are relevant to you.
So, one of the big things we try doing, we talk about digital brokering or automated brokering. In our world, that is, you know, we look at all the carriers out there that we have a relationship with and say, “Well, this is one that we think is ideal for this carrier, because of where they’re located, because they’d done this job before, because they like it,” and we’d offer it in the app.
It’s available right away. There’s an “accept now, buy it now” price, no negotiations required, you know it’s a fair price. And then, if the carrier says, “Actually I think I need a little more to do this,” then there’s an opportunity to bid on the job directly in the app and they actually – I do it for this higher price. And then if we don’t find somebody else that’s qualified, we would then automatically accept that higher offer.
So, the whole idea of finding work becomes pretty seamless, and it’s the list that the driver, owner-operator, or dispatcher sees. It’s kind of recommended to them based on where they are and what they like to do. One thing we even do is we’ll show you a load and we’ll automatically show you re-loads near the endpoint, near the drop point, and then we’ll show you backhaul, if you want that. So, you can request loads and you can request lanes, and then when things come to those particular lanes, we’ll actually highlight those and pop those up for you. So, we kind of try to make it easier to plan a route as well.
KEVIN: So, you know, two things I want to jump in there and comment on: 1) One of the things you’re doing in your app, which is really, really unique, and it’s one of my favorite things about this new economy—and at first, I didn’t get it—and that’s this whole, almost like the machine learning. We’re paying attention to what we do, what you do. The more you do, the more we understand you and the more we can offer you things that are relevant.
I do a ton of shopping online. I do a ton of reading. I have an Amazon Kindle. I buy a lot of food online. One of the things I love now is Amazon, for example, my Kindle. After I’ve bought so many books, all of a sudden, these recommendations for books start showing up.
DAN: That’s right.
KEVIN: And they’re really good. They’re like I could search for hours and I wouldn’t have found that book, but they recommended the book to me and I’d love it. I see the same thing happen with food. And the beauty of these systems—and that’s what you’re saying about loads—the more often –
DAN: Actually, some of the people who are building those systems you’re describing right now actually work at Convoy now.
DAN: And they’re building recommendations based on machine learning. They’re building it based on what they’ve been able to figure out, you know, if you like this kind of load, you’ll probably like this one too. Or, you know, if you’d done this in the past in this combination, well, this next one’s probably really good for you. You know, it’s the early days of the app, but we’re pretty far, I think, ahead right now in that category. We’ve been doing it since we started. And that’s just going to get better over time.
So, yeah, it’s an exciting thing to build to have kind of – imagine just being able to efficiently and quickly find business that’s relevant to where you are and where your fleet is. How easy that would be without having to worry about calling around, or getting jerked around, and just being able to kind of fill up your own schedule. That’s really the goal in trying to get to that vision of making it really easy for someone to get all the work they need.
KEVIN: Yeah. And the beauty of that—and I talk all the time about, you know, you build relationships with your partners. If you’re a carrier, your partner should be brokers; that’s where you’re going to get your freight. The beauty about relationships, the longer they go, the better they should get. And that’s the same thing here with this technology: the more loads you book, the smarter and smarter the recommendations get, and the better and better everything starts to work.
DAN: That’s right.
KEVIN: So, it’s interesting. Like I said, I’d love that technology, I know it’s being used in a lot of places I shop, and now to see that come into trucking is pretty exciting.
The other thing –
DAN: You know what? Something that –
KEVIN: Go ahead.
DAN: I’m sorry. I was just going to say that we also – so we have all the automated stuff and we’re doing the machine learning, the recommendations, but we also realize that sometimes the driver, an owner-operator, might just know someone else that they’re friends with who wants to do that job. So, we actually just started a share load deal in the app as well, where if you see it and you’re like, “This one actually isn’t for me, but I have a friend that I know who wants this,” send it over to them. We’re not going to give all those right, but then that helps us pull them in and then we’re like, “Oh, okay, actually your friend would have preferred that one, so we’ll recommend to them next time.”
KEVIN: What a great feature. And like I said, this is technology I’ve seen in other places and used and love it, and to see it come to trucking now is pretty exciting.
The real goal – let’s talk about what the real goal of this whole movement, kind of this, you know, learning and automation and digital brokering, is really to drive the inefficiencies out of the market. We have all these places along the supply chain where money is just being lost to inefficiencies. Nobody is getting the advantage of that money. And what you’re doing is taking that inefficiency out so that that disappearing money goes away. Somebody is going to get an advantage now. Somebody’s going to make that money that was being lost.
And the beauty here is this type of technology, in my opinion, is absolutely geared towards the smallest part of the market. The big carriers and brokers have been able to do a lot of these things just because of size, and now the single truck owner-operator, the small fleet owner, has this technology working for them, finding the loads, matching the loads, and you’ve driven the cost down on your end so there’s more margin left and to move for everybody.
DAN: Yeah. We definitely view this as something that’s going to really give an advantage to a lot of the small trucking companies and operators out there.
You know, honestly, it’s two-part. One is finding relevant work, so really helping somebody grow their business, be able to stay independent, and keep their truck full. And then another is making it so that the profession of being a truck driver and actually moving on the road is more manageable and less stressful. And so, we’re trying to do both those things actually. We think they’re both really important. One’s really about keeping people excited and motivated and able to continue to do this business and attracting more people to do the occupation of trucking. And then the second one is when you’re here doing it, helping get work that’s relevant.
And so, we have, on the part where I’m making the job more convenient, we recently announced the feature we call auto detention. We kind of realized that what happened was a lot of the time, a trucking, a carrier, will come in, do a job, and then they’ll be wondering whether or not they’re going to be paid for detention. When they’re sitting there, really they’re wondering, “Am I going to get paid?” The broker says, “Well, if I get paid by the shipper, then you’ll get paid. But if not, you won’t, and I’m not sure yet.” All this back and forth.
We kind of said, “You know what, we’re just going to make it the same for everyone. So, if you’re at a facility, we can geofence and use GPS and know you’re there. If you go over a certain period of time, we’ll pay you for detention. We’ll just add it right to your payout right away. It doesn’t matter what happens on our end, with our shipper and our customer; we’re going to pay you.”
And then it’s up to us to work with shippers and to work with customers that respect that and that are going to pay for the driver’s time. And so, we kind of take that responsibility on ourselves. We’re trying to do a bunch of things like that, that really say, you know, “You’ve agreed to do this work. You deserve to get what you deserve to get. We’re just going to give you that.” And then we need to do the work on the other end to make sure that we get paid and to make sure we’re only working with good shippers that honor that system.
KEVIN: So, Dan, I got to tell you, that one issue there, when I saw that feature in your setup and what you’re offering, you became my hero.
KEVIN: Here’s why: A couple of years ago, there was a major industry organization that was lobbying to get detention pay to be mandatory, and I flipped out. I thought it was the worst idea ever. I got a lot of pushback because owner-operators in my listeners said, “Wait a minute. We need that detention pay. We deserve it; we should get it. Why are you fighting against this?”
I said, “I couldn’t agree more. You do deserve it, you should get it, but trying to make this a government regulation is not the answer. Who will enforce this? Nobody. It’s just going to be a mess. And why in the world would we want to use a big government club to beat our customers into submission? And that’s all we would be doing.
Those shippers are our customers. Carriers and brokers, and yet – you know, here’s this industry group fighting for a law that literally we’d just be beating our customers over the head saying, “You’re going to pay us.” That’s not a good idea. And I said several years ago, “Let the free market figure this out.”
I get it. It’s a problem. Detention is a problem. There will be a solution, the government is not the solution, somebody in the free market will figure this out, and it looks like it was you.
DAN: Well, you know, I am – it’s awesome to hear that. It was really a cool moment when we saw the reaction to it. I think it was partially around, you know, people recognizing they’re going to be paid for their time, but there’s also some of the drivers just realizing that we were – like at least there was a shift towards “Hey, let’s do what’s right. Let’s just do the right thing and let’s build a business around that and let’s not have 17 different variables and just make it clear it’s going to happen or it’s not going to happen.”
I mean, if you look at any job, it doesn’t matter if it’s trucking or any job, what’s stressful is unpredictability. It’s not knowing whether you’re going to be paid or not, or how much you’re going to get paid, or what’s going to happen. You want that predictability and that confidence. And so, we’re looking at “How do we bring that on more and more?”
That’s why we do free QuickPay. And that’s not just because like we want to do that so the drivers are excited about it and want to work for Convoy, but to get the free QuickPay, we ask you to use our app and upload the paperwork and the documentation, the bill of lading into the app, and confirm your pickups and drop-offs. So, by doing that for us, with the technology, it actually makes the whole system more efficient, we save money, we get better at offering you more relevant work, and we end up coming out fine and then we could pay for that free QuickPay for you.
So, it’s a really good symbiotic relationship where the technology enables you to give us the documentation and the information we need to be able to act quickly on payment, but it also then helps us save money and reduces waste in the whole system, so everyone comes out ahead.
So, we’re looking for this kind of win-win situations where they’re not just gimmicks, they’re actually what happens when you apply technology to an industry and start to get these benefits that are actually win-win because you take out these inefficient systems and the wastes that we talked about earlier.
KEVIN: Well, you just touched on another one of my big issues that I’ve been trying to educate people on for years, which is factoring. I’m not a big fan, I realize some businesses need cashflow once in a while and it’s there if you want it, but what I try to get people to understand is what that was costing them, and there’s a huge disconnect in people understanding. Every time I bring this topic up, I get called an idiot and people claim that I don’t know how to do math.
But the point that I’m trying to get across to them is they say, “Well, what’s wrong with factoring? It’s 4% – big deal!” Well, no, it’s not 4%. It’s a 4% fee but it’s really interest, and if we calculate it correctly the way we calculate every other interest you see, it’s a 48% annual interest rate. Nobody in their right mind would sign up for a credit card with a 48% annual interest rate. Nobody would buy a car with 48% interest. But yet, they think this 4% factoring fee is nothing. Well, that’s 4% for 30 days. That’s outrageously expensive money.
So, once I get them to understand the math, then we need an alternative, because I get it, they need cash. You know, in the past, I’ve said, “Look, try to go get a couple of credit cards with maybe at 8% rate and take cash advances if you have to. But get to the point where you’re managing your money.” Well, here again, you’ve tackled that problem with technology and you’re getting them that money free now. So, we went –
DAN: Yeah, that’s right, we can do it more quickly. And we actually end up saving money because when the app’s used, it makes it just more efficient. We have less cost and less overhead.
KEVIN: Yeah. So, that’s really – so we touched on several big places here, where the technology is finding that lost money. I mean, that money was just being lost in your operation, and this technology is bringing it back to the bottom line, and at the meantime, making a lot of these transactions much more convenient. They open the app. You recommended the load for them. They might not even have to go look. So, “that took away one thing I had to do. That load might be perfect for me. Maybe it’s perfect for me but the rate isn’t quite what I need. I could do this load but I need a little more.” Well, you’ve made that easy.
DAN: That’s right.
KEVIN: And let me talk about that a second. I’ve said forever, “The reason why owner-operators feel like they always get screwed in this transaction is because they do. But it’s their fault.” They do. You know, negotiation comes down to two things: 1) access to information, and 2) your skill at negotiating.
Well, let’s look at the playing field here. Brokers have information right in front of their eyeballs every day, all day long, every minute. That’s what they do. They also negotiate all day long. So, they have all the information, they have the skill. They’re negotiating with an owner-operator who can’t look at information all day; he’s got to drive. He doesn’t negotiate all day long, and he probably didn’t go to school for it. He probably doesn’t have the personality for it. No wonder why they’re losing.
Well, you just leveled the playing field for the small carrier because now it’s just technology. “Here’s the rate I’d like to get.”
DAN: Yeah, exactly. And you said before that a partnership should be something that gets better over time. You know, I think how we view this is a lot of the way the industry is run today has been pretty short-term thinking. So, when you say negotiating every day, it’s really negotiating on a load-by-load basis. And there’s some camaraderie between the brokers and carriers they work with, and that exists. That helps in that negotiation. But honestly, it’s kind of, you know, a love-hate relationship a little bit. We’re on the phone, and you’re friends but you’re actually negotiating money for your business.
So, we realized that what we’d rather do, instead of trying to get a bigger [width] every day or a bigger spread on the negotiation, we’d rather make it more of a fair system and then just build a long-term relationship with the drivers that are engaged in our platform, be upfront and honest about the price, give them the information they need to say if they want more or not, and then we can consistently try to offer it at fair prices.
That’s a long-term plan, so we’re not trying to get as much money as I can right now because I got to give that commission check, I’m thinking, “How do I make this driver want to keep working with Convoy?” That’s the first thing we think. So then, it’s all about “How can we add value? How can we offer them a fair price so tomorrow they’ll come back and they’ll come looking for another fair price?”
If we do that, then we have a long-term relationship. It’s helpful for both sides. We make enough money to cover our business, and then the rates can end up being more fair. So, I think that’s the long – you know, again, all this stuff happens over time, but that’s really that they just [take this].
KEVIN: Fantastic. So, Dan, thanks so much for joining us. And like I said, you and I are working together on some projects, some ideas. I love what you’re doing. But I’ll tell you the real reason I decided to partner with you guys. Seattle’s my favorite city, so now I have an excuse to go.
DAN: You can’t say that when you live in Portland, right?
KEVIN: Well, I know. But I live outside of Portland, so it’s –
DAN: I’m just kidding. Yeah, I grew up here too, so I kind of joke about it. I like Portland a lot actually. It’s a beautiful city.
KEVIN: Well, you know, once in a while, you got to get away from all the weirdness down here.
DAN: [Laughs] Keep the weird.
KEVIN: That’s right.
DAN: Well, we love hosting up here, so we’ll get to see you up here soon.
KEVIN: Well, and now maybe with some new hours, we could actually schedule a time and I’ll come up and we’ll broadcast live right from your facility.
DAN: Cool. Well, thanks for having me on. I really appreciate it.
KEVIN: All right, fantastic. Dan Lewis from Convoy. We will do this again.
I’m going to get to a break. When we come back, we’re going to get to your calls and questions. Check them out at Convoy.com and let me know what you think on Facebook. We’ll be right back with more stuff.
Stick around. You’re on the Road Dog, Sirius XM 146. I’m Kevin Rutherford. This is Trucking Business and Beyond.