The Battle to Automate Truck Brokerage
Who will win the fight between startups and incumbents?
In the battle to digitize the truck brokerage market, will the winner be an incumbent or a challenger?
The upside is enormous. Trucking is a $734 billion market. Truckload and less-than-truckload revenue constitutes close to $400 billion. If 20% of that market is outsourced, then truck brokerage spending totals $80 billion. This large, fragmented market is the reason why many call truck brokerage “the next frontier of automation.”
The incumbents are the major companies in truck brokerage. They include XPO, Echo Global Logistics, CH Robinson, and UPS. The challengers are the venture-backed digital freight brokers. They consist of Uber Freight, Loadsmart, Convoy, Transfix, and others. Who will win?
The momentum seems to be on the side of the challengers. Convoy raised $185 million at a $1 billion valuation last September, and is now reputedly in midst of a financing that will value the company at more than $3 billion. This is a lot of progress for a company founded in 2015. Since then, the company has hired over 900 employees, raised over $260 million, and recruited corporate investors, venture capital firms, and mutual funds like T. Rowe Price.
