Seattle startup Convoy offers an on-demand service that arranges regional and local shipping deliveries, without the customary telephone calls and price haggling by third-party brokers.
Starting in high school, when he drove a delivery truck for his family’s Seattle office-supply company, Dan Lewis has been interested in the trucking industry.
It may not be as sexy as other Seattle businesses, but Lewis was hooked nonetheless. After graduating from Yale University in 2003, he worked in many consulting roles in freight and logistics. Add that to an appreciation for technology he got while creating computer games with friends as a boy, as well as his work at Google, Microsoft and Amazon.com; and it’s not hard to see why Lewis dreamed of a career that combined both trucking and technology.
“I have lived in both worlds,” said Lewis, a Seattle native. “I looked at opportunities for both (trucking and technology) and realized I could do something that merges the two together.”
On Tuesday, Lewis is announcing the launch of Convoy, an on-demand service for arranging regional and local shipping that he says will reinvent the $800 billion trucking industry. The Seattle startup has raised $2.5 million in seed funding from some top tech and industry leaders, including Jeff Bezos’ personal investment company, Bezos Expeditions; Expedia CEO Dara Khosrowshahi; former Starbucks President Howard Behar; and others.
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Rather than the many startups focusing on delivery service to consumers — everything from moving a couch with Dolly to ordering toothpaste from Amazon Prime Now, lunch from Uber Eats or a six-pack of Elysian’s Loser Pale Ale from Drizly — Convoy is a business-to-business platform that connects truck drivers with freight that needs to be moved between distribution centers and retailers or from suppliers to job sites.
The trucking company currently is focused on Washington and on three industries: distribution and wholesale, construction and manufacturing.
Lewis said he thinks Convoy has the potential to be huge. But, he said, he wants to be smart about expansion. While the company is not moving container vans around the ports, Lewis said he is not ruling it out for the future.
“Nearly every business in this country relies on trucking, so Convoy’s benefits will be widely felt,” Behar said in a news release. “It is a game changer for truck drivers and companies large and small.”
Convoy automates the age-old process of third-party brokers making multiple phone calls and haggling over price. Truckers, who are often paid per load, will now be able to spend less time sitting empty, Lewis said.
Unlike most industries that in recent decades have undergone technological transformation, trucking has remained almost unchanged. It wasn’t until the past couple of years that smartphones have become inexpensive enough for most truck drivers to have one, Lewis said. To share locations and track deliveries, not just in cities but also rural areas, companies and drivers needed GPS and data, which were not available until more recently, he said.
Now, with the right devices, data capabilities and Convoy’s app and website, Lewis said trucking companies can be instantly connected with companies that ship freight.
The shipper enters the pickup and drop-off locations, what needs to be moved, type of truck needed and any special instructions, and a price is instantly calculated based on distance, weight and other variables. An alert goes out to the closest driver available for the job who has the proper equipment.
Once Convoy’s mobile app offers the job, a trucker can accept or decline. The shipper can monitor progress the whole way with GPS tracking, automatic alerts and photos sent by the driver.
Convoy takes a percentage of the sale of each delivery. It varies but is under 20 percent, Lewis said. A delivery job that may be less appealing than a typical haul may charge toward the higher end, for both the driver and Convoy.
Lewis co-founded Convoy in April with former Amazon.com co-worker Grant Goodale and started operating in stealth mode in September. He is not saying how many companies have started using the service yet, but says it is in the double digits.
Seattle Goodwill says it signed on in September to use the service with Goodwill’s new SGI Logistic Services trucking company. According to Jeremiah Fleming, logistics manager at Seattle Goodwill, Goodwill strives to stay on top of trends in the industry and sees Convoy as the future in supply-chain networks.
“Convoy has enhanced our ability to deliver timely shipments in a cost-effective manner,” he said in a news release.