The growing wave of overcapacity in the trucking industry is opening up opportunities for technology to create new efficiencies, according to freight technology startup Flock Freight.
After enjoying historically tight capacity conditions in 2018, fleets have rushed into the sector with new equipment, flooding the market with cargo carrying capability and leaving some drivers looking for loads.
One solution for the problem is an approach that combines a number of small shipments that would typically travel in the less than truckload (LTL) mode and "carpooling" them to create full truckload cargo that wouldn't have existed otherwise, Flock Freight CEO Oren Zaslansky says. "The LTL shipping industry is ripe for an overhaul as slow service, paper logs, and missing goods have become the standard," Zaslansky said in a release. "A multi-billion-dollar industry, and the millions of businesses it serves, deserves modernization."
Founded as AuptiX in 2015, the San Diego-based firm rebranded this week as Flock Freight. The venture-backed company is funded by a total of $40 million, including an $18 million round in 2017 from its largest backer, Google Ventures (GV), the venture capital arm of search giant Google Inc.'s corporate parent, Alphabet Inc.
GV has built a record as a heavyweight in the logistics startup world, backing piece-picking automation vendor RightHand Robotics Inc., last-mile parcel company Deliv, and fleet management technology provider KeepTruckin Inc. That flow of cash represents a trend of venture capitalists raining tens of millions of dollars in checks on intelligent freight matching startups such as Convoy, Cargomatic Inc., and Transfix. Other entries like Uber Freight rely on funding from its parent company Uber Technologies LLC, and traditional freight brokers like C.H. Robinson and J.B. Hunt Transport Services Inc. have been building their own digital tools.
Those ranks of suitors may crowd drivers' smartphones with competing freight-matching apps, but according to Zaslansky, the space is so big, there will eventually be several winners. "In the future, each driver will have two or three of their favorite apps, but they'll all have Flock Freight. Because you can't get these loads anywhere else on Planet Earth," Zaslansky said. "My loads were born LTL and then they were repackaged. Everybody else's loads are full truckload and they make it on the road by DAT and Truckstop.com, or C.H. Robinson and Coyote, or Convoy and Uber Freight."
In Zaslansky's view, Flock Freight creates unique new demand because it brings freight in from a different industry—LTL—into the truckload industry. "We're moving LTL freight as a multi-stop truckload," he said. "We're flocking your freight; we we will gobble up four-pallet shipments, combine them algorithmically, and have the trucks make multiple picks and drops. Think of it as arbitrage between truckload and LTL," he said.
Flock Freight says it has tripled its revenue in the past 12 months—although it did not provide specific numbers—thanks to the success of its flagship product, FlockDirect, a self-service app that now generates 50 percent of the company's revenue.
