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Every day, millions of truckers grab their keys, hop in their semis, start their engines, and head out on the open road to pick-up and deliver billions of products to millions of stores across the U.S. The trucking industry is an integral piece of what fuels America’s economy. And businesses around the country rely on these trucks to pick-up and receive orders on time, especially as the need for on-demand products and delivery has risen in conjunction with the rise of online shopping and mobile technology. So why then has the shipping industry been so slow to change and adopt new technologies? 

Grant Goodale, is a former Amazon employee and now the CTO of Convoy. When he learned that 40% of trucks you see on the road are often carrying empty loads because of a poor booking process, he and his partners asked themselves a simple question: how do they disrupt the trucking industry with software that optimizes the user experience and eliminates this inefficiency?

“We built what was probably the smartest pricing engine in the industry to help us understand all of those variables, all of those inputs as to what a trucking job should cost so that we can get the best pricing from shippers for a given job, and then help carriers get the right price for the work that they’re doing.”

On this episode of IT Visionaries, Grant discusses how Convoy has optimized the booking experience for shippers and drivers with its software, and how that new process has helped not just the bottom line, but the environment as a whole. Plus, Grant explains why the trucking industry has been slow to adopt new technologies, and some tips for early-stage start-ups on how to extend your runway.

Main Takeaways

• Lost in Time: Most trucking companies employ less than six trucks, which means these small businesses often don’t have staffing for sales, marketing, or a website. Because of the structure of these businesses, most drivers were booking and negotiating jobs on Load Boards, which meant companies had to physically post jobs, drivers had to call to negotiate rates and book gigs themselves, all assuming the physical postings were up-to-date. It is a system in clear need for optimization.
• Better for the Environment: 40% of the trucks you see on the road are empty trucks shuttling between jobs. Because a majority of drivers don’t book their next job until one delivery is completed, their routes are not optimized, which means more time on the road and more time between jobs. If drivers can cut back just 1% from that 40%, they can eliminate nearly 380 million gallons of diesel gas used each year.
• Don’t Bite Off More Than You Can Chew: As a start-up, every new job you take on chips away at your supply. Make sure you are as cautious about your supply fragmentation as much as possible to make sure you aren’t overextending yourself or your business’s capabilities.

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For a more in-depth look at this episode, check out the article below.

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Every day, millions of truckers grab their keys, hop in their semis, start their engines, and head out on the open road to pick-up and deliver billions of products to millions of stores across the U.S. The trucking industry is an integral piece of what fuels America’s economy. And businesses around the country rely on these trucks to pick-up and receive orders on time, especially as the need for on-demand products and delivery has risen in conjunction with the rise of online shopping and mobile technology. So why then has the shipping industry been so slow to change and adopt new technologies? 

Grant Goodale, is a former Amazon employee and now the CTO of Convoy. When he learned that 40% of trucks you see on the road are often carrying empty loads because of a poor booking process, he and his partners asked themselves a simple question: how do they disrupt the trucking industry with software that optimizes the user experience and eliminates this inefficiency?

“We built what was probably the smartest pricing engine in the industry to help us understand all of those variables, all of those inputs as to what a trucking job should cost so that we can get the best pricing from shippers for a given job, and then help carriers get the right price for the work that they’re doing,” he said.

On this episode of IT Visionaries, Goodale discusses how Convoy has optimized the booking experience for shippers and drivers with its software, and how that new process has helped not just the bottom line, but the environment as a whole. Plus, Goodale explains why the trucking industry has been slow to adopt new technologies, and some tips for early-stage start-ups on how to extend your runway.

With most drivers and trucks shuffling around the country from pick-up locations to drop-off, Convoy was founded on the notion that software could not only simplify the booking process for those drivers, but it could also streamline the way shippers hire them.

“When we started way back in 2015, truckers had just gotten smartphones,” Goodale said. “We discovered this large base of truckers had a GalaxyS3 type smartphone in their hand in 2015, which meant we had this great mobile platform and app platform to build the largest network of digitally connected trucks in the country.” 

The epiphany came from apps such as Uber and Lyft, which use a drivers’ personal car and location services to find nearby riders looking for a ride. Convoy is built on a similar idea, that it can use a drivers’ location and background information to stitch together jobs and reduce the number of empty miles driven. 

“Less trucks on the road driving empty hits it pretty well,” Goodale said. “We calculated that every percentage point [of an empty truck on the road] equates to about 380 million gallons of diesel. So if we can cut 1% of empty miles for trucks every year, that’s 380 million gallons of diesel not burned.” 

Goodale and his team spent two months ideating the platform before they went to market, first researching the trucking industry to understand where drivers’ pain points were, and where the shippers were having issues. What they needed to understand was how the industry worked and how goods were shipped from distribution centers to consumers. What they noticed was as the demand for commerce rose and two-day shipping became the expectation, drivers were under more stress and pressure to complete jobs than ever before, but there was a distinct problem: the resources that drivers did have, including how they book new jobs, were woefully out of date,

“There’s a long history of, ‘Where do I go, where do I go to get my next job?” Goodale said of the drivers. “Load boards were the first evolution for [drivers finding their next job]. You’re not going to settle the job on the board. You’re going to call whoever’s there. There’s a whole negotiation process that still has to happen and by the time you make that phone call, you see that job on the board and maybe it’s gone because it was posted a week ago.”

To compound those problems, a vast majority of trucking companies in the U.S. operate with six trucks or less, which means these small businesses often don’t have the infrastructure or the staff to cover standard departments such as sales and marketing, or a comprehensive website that allows drivers to easily navigate the logistics of a job.

“Most truck drivers won’t book their next job until they’re getting unloaded at the facility from their last job,” he said. “Being on-time is such a key part of your performance as a small truck driver, that you don’t want to risk it by booking a job too early, and then having a delay at that end facility, or anywhere in between because that means you miss that next pickup.” 

Goodale calls it an industry, “rooted in history,” which is a nice way of saying the trucking space was ripe for disruption. But as any trucker or shipping partner knows, headaches and missed shipments can doom a start-up and prevent the driver and his or her company from receiving another contract.

“We started out by trying to remove that friction from the matching piece,” Goodale said. “How do we find the best truck and the best driver for a job, given what we know about it? That’s probably 80% location and location preference. How can we automate the price of the job, so that there’s no back-and-forth on the phone, but you see a price in the app? You can choose to accept it. You can respond with a bid that says, ‘I would take it for this much more,’ and then improve the settlement time for those transactions.”

Convoy did what any good startup does, they started small — which for Convoy meant starting with box trucks that were 26-feet or less. Because Convoy utilized trucks this size, the company knew it could get drivers to commit to multiple jobs per day, meaning they were able to see more transactions on a daily basis. With more transactions on a per-day basis, Convoy was able to gather data and insights at a quicker rate.

So they built the entire platform from end-to-end, from having the drivers being able to select their jobs, to the price matching system that measures the supply and demand and the entire web interface.

“We never pretended to be old hands at trucking, but we knew enough to tell these customers that we think the data that we have and the technology we have can make a material improvement in the efficiency of your transportation,” Goodale said. “We know enough about what that inefficiency looks like for you to give us a shot. You give this other trucking company a shot and they have no technology whatsoever. So what do you have to lose?” 

To hear more about how Convoy is utilizing software, and location services to streamline the booking process for drivers and shippers, check out the full episode of IT Visionaries!

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To hear the entire discussion, tune into IT Visionaries here.