
Convoy raises $62M from Bill Gates and other luminaries to transform trucking - howsilly
https://www.geekwire.com/2017/convoy-raises-62m-bill-gates-luminaries-transform-trucking-industry-technology/
======
pg_bot
Speaking as the son of a trucker who spent a summer helping my dad negotiate
and optimize his freight rates and schedules, the freight brokerage business
is not one I would consider getting into. There is also a ton of competition
in the freight brokerage space and the problems associated with shipping are
due to poor warehouse management and unreliable truck drivers.

Unlike hailing rides in a taxi, manufacturing and shipping generally holds a
regular schedule. If you build a reputation as someone who always shows up on
time, you can make a lot of money as a truck driver (more than most
programmers). After building a good reputation you cut out the broker and work
with the manufacturers directly. All you need to do is find two manufacturers
in a high paying industry, (pharmaceuticals, chemicals, specialized plastics)
whose pickup and dropoff points are near one another and you can be set for
years.

Most poorly run warehouses can be backed up for 4-6 hours before you can begin
unloading. Most standard contracts allow 2 hours from the point of arrival to
fully unload your truck. We would negotiate our billing like a lawyer. For any
additional time after that grace period we would charge in hourly blocks at
over $100 per hour. Companies try to abuse their power by wasting the time of
drivers by not paying them to sit idle at their warehouses. Amazon and Walmart
are notorious for these practices.

I think there is a lot more money to be made using technology to run a high
tech fleet of trucks than there is a freight brokerage company. Trucking is an
information game for sure but there is too much competition in the freight
brokerage space and you can be easily side stepped by savvy truckers.

~~~
IgorPartola
Why is it advantageous to a warehouse to have the trucker sit idly by for long
periods of time?

~~~
Angostura
I guess, it gives you extra free storage and workflow contingency. You tell
the trucker you need them early. If they turn up early and you happen to have
the stuff ready early great - you have some warehouse space freed up. If
you're late however - no biggy - the transport is available to take it,
immediately, effectively in demand when it is effectively ready. Maximum
flexibility, zero additional cost.

------
aresant
Walmart just lightly threatened carriers & owner operators that if they work
for Amazon they can expect lower priority from Walmart in the future (1)

Walmart presently represents ~14% of the total capacity of one of America's
largest carriers - Swift transport - and likely similarly important elsewhere.
(2)

Obvious outcome down the road is that one of these behemoths snaps up a convoy
/ other plays in the space to secure capacity.

But would they rather buy an "asset light" business like Convoy, that has no
actual trucks / drivers / or control, or will they be more interested in an
"asset heavy" carrier that has technology / driver / and trucks?

(1) [http://www.dcvelocity.com/articles/20170627-wal-mart-
warns-m...](http://www.dcvelocity.com/articles/20170627-wal-mart-warns-motor-
carriers-to-stop-hauling-amazon-loads-consultant-says/)

(2) [http://www.zerohedge.com/news/2017-06-28/it-begins-
walmart-w...](http://www.zerohedge.com/news/2017-06-28/it-begins-walmart-
warns-truckers-it-will-no-longer-work-them-if-they-move-goods-amaz)

~~~
projectileboy
Kind of tangential to the discussion here, but Walmart's threats are empty.
Amazon is currently constrained by trucking capacity, and would gladly swallow
up more.

~~~
acangiano
I have said it before, and I think it applies here, Amazon is becoming Walmart
far quicker than Walmart is becoming Amazon.

~~~
rattray
How do you mean?

(Perhaps a link to or c/p of a previous post would suffice)

------
pissedycfounder
YC companies beware. YC "Continuity" will come talk to you to learn the ins
and outs of your business and then go fund a non-YC competitor. The whole idea
of the fund was to use it to support YC companies at the next stage but now
they're funding companies like Convoy that compete with YC companies like
Flexport, while using their access to the YC businesses to do diligence.
That's fine, normal investor behavior, but you can't treat YC like trusted
insiders any more (prob never should have).

~~~
jamiequint
Flexport and Convoy are completely different businesses. Did this actually
happen to you or are you just making up drama?

------
mkoryak
I used to work for startup called OpenMile in 2012. We were trying to do
pretty much the exact same thing. We might have been too early, but it was
hard. We had the tech, but the trucker and other brokers were not very tech
savvy. The margins were low and there was too much hand holding.

Best of luck to them.

~~~
mv4
How far did you get? Were you delivering shipments?

~~~
mkoryak
we were a high tech broker. yes we did loads, but we could never figure out
how to set good margins.

~~~
thephyber
The article states that truckers lose up to 25% of the job price to freight
brokers (obviously a ceiling). Were your margins far smaller than that?

It seems like the reputation feature and the ability for truckers to find a
load on shorter notice would be incredibly valuable. I'm guessing if a broker
is already making $13b in revenue, they've already experimented with some
similar evolutionary changes to their negotiation process.

------
mv4
Yes, similar systems do exist. My team made one of them:

[https://cargofone.com/en/](https://cargofone.com/en/)

In some ways, it's more challenging than building "an Uber", once you get into
different cargo and body types, document management, insurance, etc. We
launched in Russia first, and not being able to do electronic signatures added
a set of challenges.

In any event, glad these investments are happening. Trucking is badly broken,
especially in the US.

~~~
adventured
> Trucking is badly broken, especially in the US.

I'd like to see this supported, particularly the "especially" part, given the
extraordinary scale of hauling going on in the US via trucking. The economic
facts on the ground in the US overwhelmingly disagree with you.

If it's so broken, and the US economy relies so much on it, how is the US GDP
per capita so high? Both can't be true. It's either functioning well, leading
to the high reliability and predictable delivery times we see today, assisting
the US in having the most powerful economy on earth, or it's badly broken
(where is the supporting economic evidence?).

~~~
semi-extrinsic
There are several ways trucking could be badly broken but still consistent
with your statements:

a) Say today, company X sells a thing for $100, of which $15 covers shipping
cost, $15 is profit and $70 is what they paid their middleman for the thing.
Suppose further that shipping cost could be reduced to $11 just by properly
managing trucking, increasing the profit margin by 27%. These are of course
made-up numbers, but just because a business is successful doesn't mean there
are no inefficiencies left.

b) It is well known that certain jobs take a huge toll on the people doing
these jobs, causing early burnout, physical and/or mental health problems up
to and including suicide, etc. E.g. drone pilots, people working with social
media illegal content filtering have been covered in the media recently. If
trucking causes lots of health issues, it's not just "badly broken" in the
human compasdion sense, it also leads directly to reduced national economic
output (with a 2x multiplier, you're taking away a taxpayer _and_ adding an
additional user of Medicaid/whatever).

~~~
jessaustin
_If trucking causes lots of health issues..._

Visit a truck stop; take a look around. Truck drivers are in poorer health
than late-morning Wal-Mart shoppers.

------
frandroid
Next up, they will hit up on the idea of dedicated roads for truck convoys;
also, a single engine to pull them all; and finally, the creation of roads
with steel rails to put the trucks on.

~~~
ourmandave
I would agree, but I think the problem with trains is you have to load and
unload the containers onto railcars.

I've seen UPS and FedEx semis pulling 3 short trailers on interstates. I
assume they're only limited by current regulations on weight and length.

~~~
ams6110
Triple trailers are only legal in some states and turnpikes.

------
WisNorCan
I would assume YC, Greylock and others have wide access to deals and have many
opportunities to invest. Knowing how VCs operate I am assuming that they
looked at the top companies in the sector before deciding on this company and
teams.

It seems like several companies have tried to go after this market with
technology, but Convoy has the best backers and most momentum. I wish them the
best of luck!

------
rootedbox
Coyote already does this. Got bought by UPS for 1.8 billion 2 years ago.

Also Amazon, and Uber are working on competing products. So that 62m might not
go so far.

~~~
Mutinix
Bezos is one of the investors.

------
malandrew
While Convoy Driver app has slightly better reviews than Uber Freight in both
app stores (iOS 4.5 stars vs 4.0 stars, Android 4.1 stars vs 3.4 stars), both
Uber Freight and Cargo Driver each have 10,000-50,000 installs in the Android
Store and Uber Freight has ~2.6x the number of Android and iOS reviews.

The number of installs and reviews for both is especially remarkable because
Uber Freight has only been available for about a month, while Convoy Driver
has been available for about 1.5 years now.

------
DonHopkins
On the topic of the transforming and optimizing the future of trucking, just
last night I watched a so-bad-it's-good movie called "Space Truckers", which
was mentioned in the "Crapularity Hermeneutics" paper and that I had to see
for myself:

"(This scenario has countless precursors in popular science fiction, including
for example Stuart Gordon’s 1996 movie Space Truckers in which the
protagonists transport square pigs that have been genetically modified to make
more efficient use of limited spaceship cargo capacity.)"

[http://cramer.pleintekst.nl/essays/crapularity_hermeneutics/](http://cramer.pleintekst.nl/essays/crapularity_hermeneutics/)

[https://en.wikipedia.org/wiki/Space_Truckers](https://en.wikipedia.org/wiki/Space_Truckers)

~~~
wodenokoto
And here's the trailer for Space Truckers [1], truly looks like a B-movie that
isn't willing to admit it.

[1]
[https://www.youtube.com/watch?v=IerJF2xKwuo](https://www.youtube.com/watch?v=IerJF2xKwuo)

~~~
DonHopkins
I was hilarious, but I don't think they were prepared to admit it was a
comedy, either.

~~~
wodenokoto
Absolutely true. I kinda assumed the comedy category was added after the fact,
but I haven't seen it, so maybe marketing didn't agree on it being a comedy.

------
kreutz
I was under the impression YC Continuity existed for the sake of investing in
later stage YC companies. Convoy is not YC company. Is YC Continuity just a
generic fund now?

~~~
elmar
Y Combinator raising $1 billion for new fund

[https://news.ycombinator.com/item?id=14820629](https://news.ycombinator.com/item?id=14820629)

~~~
kreutz
Good to know. I did not see that news.

------
edoceo
Ages ago Microsoft purchased another company called Convoy, the product was
merged to NT4SP6 and Windows 2000 as the Network Load Balancing component.

------
amelius
I'm wondering if "Convoy" could ever become a trademarked name, since it is so
generic.

~~~
jahewson
[https://en.m.wikipedia.org/wiki/Convoy_(1978_film)](https://en.m.wikipedia.org/wiki/Convoy_\(1978_film\))

------
sanxiyn
China seems to be ahead here, for example see
[https://www.bloomberg.com/news/articles/2016-12-22/china-
s-u...](https://www.bloomberg.com/news/articles/2016-12-22/china-s-uber-for-
trucks-huochebang-fetches-1-billion-valuation)

------
Paul-ish
>“Like I said, I would rather have [the brokers] go through all of the
headaches than me. It’s bad enough what we are dealing with out here on the
roads than to be worrying about that.”

This seems to imply that there is something traditional brokers do that Convoy
is now putting on the driver. Does anyone know what that is?

------
47
A bit of tangent, But i am in the market for the Software that Convoy and
CargoFone are building. We have our own FT, LTL and Final Mile Carrier
network. We have negotiated custom rates with them.

What i am looking for the Software service through which i send Orders and get
updates from these Carriers.

Is there a solution like that out there?

~~~
edorsey
I'm in charge of Product at Freightview
([https://www.freightview.com](https://www.freightview.com)). We work
exclusively with companies that have existing rates setup. Would be glad to
chat.

------
hourislate
This type of system already exists. Their are plenty of exchanges where
truckers or trucking companies can get matched with a load or pickup work.

I don't understand what makes this so transforming?

~~~
prodmerc
Deep pockets.

~~~
hyperpape
I don't know about the load boards themselves, (of which there are many), but
there are a lot of companies in the logistics space. $62 million isn't that
much.

Not saying whether they'll succeed, but saying deep pockets will do it doesn't
make sense, IMHO.

------
sd_mikey
[https://auptix.com](https://auptix.com) has a platform that optimizes LTL.
They've been up and running for a while and have good volume.

------
real-hacker
No one talks about self-driving trucks like Otto? Truck drivers' life won't be
easier.

------
losteverything
I just wish they could find a way to get Mallomars to the stores in the summer

------
prodmerc
_" We don’t think there are any other companies that have taken the same
approach"_

I distinctly remember a service/app with the same purpose in Europe in 2013.

There's Cargomatic and mentioned by mkoryak, OpenMile. And probably others.
Money will definitely help here, though.

~~~
mv4
Yep, we launched one:

[https://cargofone.com/en/](https://cargofone.com/en/)

Money helps, but it isn't the only thing.

~~~
DenisM
Can I pick your brain? Sooo grateful I will be... email in profile

~~~
mv4
Emailed.

------
spcelzrd
That doesn't seem like a lot of money, especially for a capital intensive
industry with notoriously low margins.

~~~
jobu
Shipping is only capital intensive if you intend to own the trucks, trains, or
ships. Convoy appears to be more of a middleman between owner-operator
truckers and shippers or manufacturers.

The problem is that many (most?) of the truckers that own their own rig are
middle-aged and older, and getting them to use technology like this may be an
uphill battle:

 _“I think they’re relying too much on computers,” said Brian Larocque, a new
driver based out of Connecticut._

~~~
jbeales
Yes on both. I work in tech that services the trucking industry. Getting
drivers, (and dispatchers, actually), to truly trust a computer is difficult.
They use a lot of apps, but trucking's got a strong culture of self-reliance,
and people working in trucking probably care more about single points-of-
failure than DevOps do, relying on Convoy would be a pretty big single point
of failure, so they'll have to prove themselves worthy of the trust.

However, 82 million should get them there. That's a ton of money to build a
business with no capital costs. The big risk for them is the incumbents
deciding to move quickly - most of them have the cash, so if they realize
their business model is threatened by Convoy, they'll move quickly, and be
supported by their existing cash flow.

------
mkolodny
"Uber for trucking"... Uber already has an Uber for trucking [0][1]. And it's
doing very, very well.

[0] [https://www.wired.com/2017/05/uber-
freight/](https://www.wired.com/2017/05/uber-freight/) [1]
[https://medium.com/official-uber-freight-blog/uber-
freight-l...](https://medium.com/official-uber-freight-blog/uber-freight-
leveling-the-playing-field-for-americas-truck-drivers-73530215a1f1)

~~~
mv4
Uber for Freight only officially launched last month. Check their app reviews
(both iPhone and Android), more than 1/3rd are one star, citing various
issues.

What makes you think they are doing very well?

~~~
malandrew
Just checked both apps in the iOS store and Android Store.

On the iOS Store, 4 stars out of 5 based on 31 reviews for all versions. Not
enough reviews for current version. Only 4 are 1-star reviews. That's 12.9%,
not 33%.

On the Android Store, 3.4 stars out of 5 based on 139 reviews. 53 are 1-star
reviews, so 38%. Many of the 1-star reviews were Uber haters and people
complaining about low rates. The latter I expect to become the norm once
technology streamlines the industry, whether its Uber, Convoy or some other
company that does it. Only a few 1-star reviews actually report a bad
experience with the app that isn't related to rates.

Based on both stores, 30% are 1-star ratings, so it's about 1/3 1-star reviews
across both stores. I really wish the app stores made an effort to cull
obvious haters and fanboys so that only legitimate reviews were left. People
gaming app store reviews are just hurting the people who would derive the most
utility from choosing the best application for them.

For comparison, Convoy Driver in the Android store has 4.1 stars based on 51
reviews. In the iOS store it has 4.5 stars based on 12 ratings. Several of its
1-star reviews make the same complaint about the same low rates.

Both Uber Freight and Cargo Driver each have 10,000-50,000 installs in the
Android Store, and the fact that Uber Freight has 2.6x the number of Android
and iOS reviews based on only 1-month of operations versus almost 2 years
seems very solid to me. Convoy's first review in the Android store is from all
the way back in October 2015.

------
remarkableboard
I've been fortunate to learn about Convoy and speak with employees involved
recently. Convoy is the real deal and making this Uber for Trucking idea work.
They're backed by Bezos, Reidman, and many other high profile investors. If
any company were to crack the 800Bn trucking market, Convoy is looking like
the one.

