TransRisk, a startup that is forming the first financial marketplace to trade spot market truckload futures, said today it has completed a $3.4 million financing round with investors that include William C. Ford, Jr., executive chairman of the Ford Motor Co.
The financing round is led by Fontinalis Partners, which touts itself as a mobility-focused venture capital firm. Chris Stallman, a Fontinalis partner, will join the TransRisk board, according to TransRisk. Ford is part of the investment team at Fontinalis.
Craig Fuller, founder of Chattanooga-based TransRisk, said Dearborn, Mich.-based Ford will have no involvement in managing the startup.
The TransRisk platform is designed to help participants better manage risk and increase transparency in the spot truckload market, which accounts for about 30 percent of business in the $700-billion-a-year truckload industry, and where prices on major traffic lanes can swing wildly from week to week due to multiple factors. Participants will be able to hedge bets against the future direction of spot rates, which can cause margin compression for users or carriers if rates move against them.
Spot prices have risen all year due to stronger freight demand, concerns about a shortage of qualified truck drivers, worries that compliance with a federal mandate to equip virtually all vehicles with electronic logging devices (ELDs) will reduce fleet productivity by as much as 10 percent, and the impact in the third quarter of hurricanes Harvey and Irma on truck capacity outside of the markets affected by the back-to-back storms.
The platform, which was unveiled late last month, is expected to go live in late 2018.
TransRisk also founded the "Blockchain in Trucking Alliance (BiTA)," a consortium of technology enterprises, manufacturers, carriers, and logistics technology organizations committed to implementing the new technology in trucking. Blockchain creates what its backers say is a nonhackable and unalterable digital record of each transaction and the role of every participant in it. Launched to support the new-fangled Bitcoin alternative currency, the technology is seen by advocates as applicable to virtually any industry with transactions that involve a chain of custody.