Obviously it didn't pan out, but you could think of Convoy as an aggregator of small carriers. A big shipper doesn't want to deal with 1,000 small carriers but they can deal with Convoy, and Convoy deals with the small carriers.
Convoy could interface with large companies as though they had a large fleet of drivers and trucks. That "fleet" wouldn't require paying for benefits to employees, maintenance or fuel on the truck, and could scale up or down based on demand.
I would have guessed that the network effects of getting this kind of marketplace going would be the hard part. It makes me think that a big mistake in leadership was made.
Logistics is so crazy saturated. We have an aggregator in Cincinnati, TQL, that was started by a dispatch employee and has just blown up like crazy ever since. They are still growing.
> Logistics is so crazy saturated. We have an aggregator in Cincinnati, TQL, that was started by a dispatch employee and has just blown up like crazy ever since.
Don't these sentences tend to contradict each other? What do you mean by "saturated"?
Everyone in startup world wants to come in and "hack" 3PL until they realize 3PL is a weird, complicated thing even if it's got a bunch of legacy players on legacy software. It's more or less like this: https://xkcd.com/1831/
The logistics industry is really old, backwards at times, and lots of penny pinches.
But supply and demand for carriers and capacity is pretty dang fluid too... market forces are already REALLY at play in logistics lands.
If covid showed anything it was that while there would be hiccups if people can't get to work ... stuff still flows through the system pretty efficiently.
If you want to be a 3PL you gotta manage your relationships with your customers / give them a reason to stick with you.
It's basically the same as Uber vs taxi companies [and Uber Trucking is a similar company to Convoy]. So traditional freight broker companies have a huge number of brokers who handle issues between shippers and carriers manually (on the phone constantly) while Convoy was going to automate this. So theoretically Convoy would have lower costs (not having to pay all these brokers) while at the same time it would provide better service (for example instant computer response vs hours for a broker to get back to you). This theory didn't work out.
Was it largely spot rates, a bid board, and lots of small carriers?
Customers easily could just get rates / carriers elsewhere and walk from Convoy?
No other services making income keeping customers around?
Rates are pretty fluid in logistics, very strange that they would rely on that alone if that was the case.