A digital freight network is an open, fully connected freight marketplace that uses machine learning, automation, and other software services to efficiently connect shippers and carriers. By design, as shipment volume increases across the network, trucks are better utilized, costs come down, and technology adoption goes up, leading to better prices and higher quality of service.
Solving decades-old problems of inefficiency in freight requires a new approach, one that starts with technology at its core. In 2015, Convoy started the world’s first digital freight network, connecting shipments with carriers to move millions of truckloads.
A digital freight network uses machine learning and automation to efficiently connect shippers and carriers. As the marketplace grows it creates a flywheel effect that benefits both sides. As more shippers join the network, drivers have better options, fewer empty miles and fewer wasted hours allowing them to earn more per day. As more carriers join the network, capacity increases and shippers see lower costs and higher service quality.
The average brokerage fee ranges from 15% to 20%, with a high degree of variability between each load. Brokerage success is built around capturing the highest possible margin on every load booked, so they often negotiate one deal at a time amongst their limited carrier set. Brokers need to charge this fee because the work of the broker is traditionally manual and labor intensive. The “rip of the day” is celebrated as the biggest spread, and does the best job of maximizing what the shipper pays while minimizing what the driver makes.
A digital freight network automates the matching of trucks to shipments, drastically reducing the cost structure and the time it takes to find the most efficient truck for every load. Matching is the heart of a network and shifting this from human-driven to a machine-driven process sets the foundation for all subsequent innovation.
Traditionally, load matching to a truck is done one shipment at a time. This puts the burden on carriers to search across many brokers or load boards to fill up their schedule, often resulting in inefficient routes. On average, 35% of all miles truck drivers run are empty, and trucks spend hours waiting for poorly aligned appointments. This waste drives cost for the carriers and ultimately gets passed onto the shippers. Of all the problems in trucking, this one is the most classic computer and data science problem.
A digital freight network automatically evaluates billions of load combinations to determine the ideal way to combine shipments. This results in not only less effort by truck drivers, but substantially more efficient routes increasing earnings for drivers.
There are about 3 million trucks and 1 million carriers in the US. To keep their trucks full, these carriers maintain relationships with multiple brokers attempting to get visibility into more loads. No matter how hard they try, most carriers see only a fraction of all available freight at any given time. Even worse, more than half of all freight is drop-and-hook shipments, which traditionally are off-limits to trucks outside the small percentage of large asset-based carriers who can afford to buy and manage the large trailer pools required for these operations.
A digital freight network democratizes access to freight, ensuring all loads are available to all carriers at all times, so the most efficient option is always available. Being able to match any truck to any shipment creates a more efficient network.
Today, scheduling loads and planning the carrier’s week are static operations set ahead of time. But the real world is dynamic with changing weather, traffic, breakdowns, varying hours of service, and unpredictable loading times. A delay at one facility can lead a carrier to miss their next load.
A digital freight network is constantly looking for ways to re-optimize. It automatically adjusts for changing conditions and unforeseen events to maximize efficiency and prevent waste. It is resilient to even the most unusual events.
We are at an opportunistic moment in freight. Smartphones are in the vast majority of trucks, automation and machine learning capabilities are being deployed at scale, and companies of every size are trying to optimize their supply chains to improve their bottom line and reduce their carbon footprint.
This unique mix creates a very real opportunity to transform the decades-old business of moving freight with new and innovative approaches.
Today, Convoy is leading that transformation with the most efficient digital freight network in the industry.
The foundation of our network is an open and fully connected marketplace of shippers and carriers driven via automation and supported by a broad, ever-growing set of shipper and carrier capabilities.
That fully connected marketplace grows through the momentum of our flywheel. As more shippers join the network, drivers have better options, fewer empty miles, and fewer wasted hours, allowing them to earn more per day. As more carriers join the network, capacity increases and shippers see lower prices per mile and higher quality. In addition, as the network grows, insights emerge from the data that help shippers and carriers improve their businesses.