According to a Wall Street Journal report, Flexport plans to restore Convoy’s trucking services for its customers in the coming weeks.
“In recent years, Convoy became the clear leader in technology for trucking, a vitally important aspect of Flexport’s mission of making global commerce so easy there will be more of it. Trucking is at least one leg of every international shipment Flexport manages. With more than 400,000 truck drivers and 80,000 carriers in Convoy’s network, we will be able to tap into an incredible supply of trucking service providers for our customers. Convoy’s tech stack also includes sophisticated procurement technology that fully automates the supply side for 98% of loads booked. This will allow us to significantly lower our carrier costs on our truckload and eventually our drayage and cartage business,” wrote Flexport CEO and Founder Ryan Petersen in a company blog post this week.”
Petersen added that the company strategy for the trucking business unit “will be very different from Convoy’s or other large truck brokerages”.
With Convoy’s advanced tech stack and a vast network of over 400,000 truck drivers and 80,000 carriers, Flexport says it aims to significantly enhance its U.S. trucking operations. Even though financial details were not disclosed, the purchase price was described by Petersen as “modest”, adding that Flexport is only acquiring Convoy’s tech stack, not its overall business or its liabilities, including physical assets such as real estate or truck trailers.
As part of the deal, Flexport will bring on some product and engineering employees from Convoy, including Convoy’s co-founder and CEO, Dan Lewis.
The acquisition occurs amid Flexport’s efforts to regain profitability, following leadership changes and staff layoffs in recent months. According to a report by supplychaindive.com, in the past few months the company has parted ways with several top leaders, including former CEO Dave Clark, who resigned in September, while also laying off 20% of staff în an attempt to ”to return to focusing on growth in the core freight business”.
The apparent turbulence in the US digital forwarding sector is not expected to be repeated in Europe, according to sennder CEO David Nothacker, who has highlighted the European market’s lower volatility compared to the U.S. market.
“The European road freight market exhibits lower volatility compared to the US market due to a more stable supply side. This stability is evident in the limited influx of new truck drivers entering the labor market, in contrast to the US, which witnessed a significant surge in owner operator registrations in 2022,” Nothacker told trans.iNFO this week.
Photo: Collision Conf / Flickr / CC BY 2.0 DEED