Flexport moves forward with the rollout of Convoy’s technology platform

Roughly three months after it acquired the technology and intellectual property of Seattle-based digital freight network Convoy, following the closing of Convoy’s business, in October, due to the effects of the freight recession and a slowdown in capital market activity, San Francisco-based freight forwarding and customs brokerage services provider Flexport said earlier this month that it has formally introduced the rollout of the Convoy platform to its service portfolio.

When it was established in 2015, Convoy described its business model as “a new approach to trucking,” digitally connecting shippers and carriers to the Convoy platform, applying machine learning models to more efficiently match carriers to loads. 

The Convoy platform, stated Flexport officials, provides global shippers with access to a trucking capacity marketplace comprised of small carriers and owner-operators.

And the company noted that the new Convoy Platform connects small carriers with shippers and brokers looking for near real-time visibility, exceptional on-time performance, and competitive rates to efficiently manage their capacity needs, comprised of service providers offering dependable, fast, and efficient Full Truckload (FTL) services for Flexport customers.

Flexport also said it plans to expand the offerings of the Convoy Platform for brokers in the second quarter of this year, with brokers getting access to what it called high-quality capacity backed by market-leading fraud detection technology, as well as ongoing automated predictive performance scoring and quality control.

On the carrier side, Flexport highlighted various benefits of the Convoy platform, including: enabling them to find and book loads from vetted brokers and shippers; 24/7 access to the load board in the Convoy app and easily book loads at the listed rate or have the option to bid; the ability to request hassle-free detention and lumper fees, track their fleet, and manage load paperwork; and facilitate same-day and next-day quick pay options for carriers to get paid at the speed that works best for their business.

“Shippers, carriers, and brokers need innovative technology solutions to provide them the flexibility, reliability, and operational efficiency to manage through this often challenging and ever-changing market. We're thrilled to restore this transformative trucking technology to the industry,” said Flexport EVP and Head of Trucking, Bill Driegert in a statement. “The Convoy Platform will provide an effortless, fully integrated experience for shippers and brokers while offering easy access and execution of freight to thousands of owner-operators and small carriers. It's long been Flexport's belief that no single company can provide a solution to every problem in global logistics, and we are committed to using technology to create a more collaborative, transparent, and reliable freight ecosystem for all.”

In an interview with LM, Driegert said there were a couple of things during the diligence process that helped drive Flexport’s interest in acquiring Convoy’s technology.

One factor, he cited, was how much carriers liked using the Convoy platform, as well as the investment in pricing and getting the bid mechanics just right so that carriers would accept it and respond very quickly and building the related intelligence behind that, in the form of AI and ML models. Another benefit he me mentioned was tracking, in terms of coaching drivers through tracking, how to ensure high tracking resolution and compliance. What’s more, Driegert cited Convoy’s brokers-focused product which was launched in 2020, and received solid levels of investment, noting there is a lot of opportunity in that space to build out more of an ecosystem and bring these capabilities to more providers.

“Convoy had raised more than one billion dollars, and a significant chunk of that went towards building out its technology,” he said. “That included investment in data science, AI, and all the models and the feature set. We had started to build in this space. My mandate when I came on was to build similar capabilities here at Flexport, so this is a massive [push] in that direction. We are certainly getting more than our money’s worth, in terms of capabilities that came along with it.”

As for customer feedback, Driegert said it has been very positive, explaining on the carrier side, which is still a tough market in general, with more owner-operators and small carriers having become more app-centric in how they manage their business.

“Convoy is and was one of the premier apps out there, with extensive access to freight, fast payment and all these capabilities that drivers have come to rely on,” he said. “There was an incredibly warm reception from drivers because they had been missing these capabilities. On the shipper side, they were able to plug in from the switch and it just worked. I think there was so much uncertainty for us internally because nobody's ever done something exactly like this that I'm aware of…with the technology and business gone and then turned back on. But there was clearly a lot of latent demand from carriers, shippers, and the brokers that have been on the platform that we have been able to tap into. It is really the buy in of the shippers and the carriers, which I think has been surprising just in how much value they had seen out of it before.”

Following the completion of the acquisition, Driegert said Flexport brought over a core group from Convoy’s product and engineering team and has subsequently hired back sales and operational leadership from Convoy.

As for next steps, Driegert alluded to partnering with brokers and making the Convoy brokerage platform available in a more open way.

“Seeing the opportunity and how much interest there had been with that product, as Convoy had launched it previously…that is something we are working quickly on to bring back to market,” he said. “Within Flexport, there is a lot of opportunity for us to extend this technology. Flexport is in all markets and pretty much all modes, and that's one of the things, for me, that's very exciting is that it's such a large canvas within which to extend this technology and provide benefits to all of our shippers and core forwarding shippers as well. They benefit today, because we plug it in domestically on truckload but clearly there are other modes and opportunities that we see.”

Morgan Stanley analyst Ravi Shanker observed in a research note this rollout will give Flexport customers access to capacity backed by fraud detection technology and predictive performance scoring and quality control, as well as more than 400,000 truck drivers and 80,000 carriers in the Convoy network.