AxleHire founder sets sights on LTL with new company, seed funding

Sokolovsky and Lester’s new company, Los Angeles-based Warp, emerged from stealth mode on Tuesday with the announcement of a $2.4 million seed funding round led by Bee Partners. The company, like AxleHire, will digitally connect customers to delivery capacity, but whereas AxleHire honed in on the last mile, Warp will focus on less-than-truckload shipments for the middle mile.

“What we’ve done is we’ve built a software platform that connects cross-docking facilities, and different sizes of trucking companies and different sizes of trucks, to stitch together a digital LTL network. And so basically, what’s happening is we’re putting tools — back-office tools, front-office tools, logic and optimization, and things like that — into the hands of everyday operators,” Sokolovsky said.

Watch: Automating the middle and final mile for retailers

At the time of AxleHire’s founding, Sokolovsky was aware of several trends. He noticed the increasing volume of same- and next-day deliveries, the relocation of facilities to cities and the growth of the gig economy that could enable a platform like AxleHire’s. But after spending over half a decade with the company, he started to identify a new set of trends.

“For many of AxleHire’s customers, and for many other people in the industry, it’s been very, very difficult to ship even a few pallets. Like, you can get a full truckload pretty easily — there’s a bunch of startups, a bunch of different people that you can use to transport a full truckload,” he explained. “But for companies who consistently ship, say, four pallets from one direction to the other, or ship a truckload, but it has five different destinations that it needs to go to, there aren’t really any great solutions.”

Enter Warp. Warp allows smaller companies to behave like much larger ones by connecting them to a digital pool of drivers and vehicles for their middle-mile LTL shipments. In doing so, Warp can enable same- and next-day deliveries for brands without them needing to invest in a permanent fleet of drivers or vehicles.

“Everything from taking in the order and verifying it, making sure that we have the capacity to do it, making sure that we’re doing it in the most effective manner, making sure that all of the data exchange is done properly — all of that was done by the software at AxleHire, and all of that has been done by the software here at Warp too,” explained Sokolovsky.

The key difference between the two companies is that due to Warp’s focus on LTL shipments, the platform works with established trucking companies rather than independent contractors, like AxleHire does. Because those middle-mile trips often cover longer distances than AxleHire’s last-mile offering, that also means Warp’s system is taking in more data points: things like weight capacity, weather conditions and whether the pallets are evenly balanced on the axles.

“With AxleHire, we could send a sedan, a minivan, an SUV, a cargo van — for Warp, we obviously can’t use these consumer vehicles,” Sokolovsky explained. “Instead, we are using a cargo van, or a 16-foot box truck, or an 18-foot box truck or a 24-foot box truck, depending on the size and price and capacity of those in our system. But the system is taking all of these things into account.”

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Currently, Warp’s platform is injecting directly into last-mile carriers like the Postal Service, handling inventory replenishment and transporting goods between facilities like fulfillment centers, distribution centers and production facilities in California, Texas, New Jersey, New York and Connecticut.

And in Sokolovsky’s mind, conditions couldn’t be better for Warp to expand its offering. GPS and sensor technology along with mobile apps and integrations have made a platform like Warp’s possible. But just as importantly, there’s an appetite for it.

“Now shippers, regular e-commerce businesses, even non-e-commerce businesses, they’re thinking about things like speedy delivery, traceability, reliability of your service offering, transparent pricing, flat rate pricing, easy-to-interpret invoicing — all of those different things that we can offer as a new age tech/logistics company,” Sokolovsky said.

Looking ahead, Warp plans to use its $2.4 million seed funding to continue to build out its product and accelerate growth in initial markets, as well as to expand operations with existing customers.

“I think what comes next is a very, very aggressive and strategic takeover of the LTL industry,” Sokolovsky asserted. “I think right now we’re obviously being very selective about the customers that we’re onboarding. We’re trying to work with the right partners over the next couple of years to make sure that we have the best bang for our buck in terms of growth.”

According to the co-founder, Warp is looking to work with companies that have consistent revenue streams, that have experienced significant growth and that place an emphasis on reliability, transparency and cost. 

And despite the inherent uncertainty in starting a new business venture, one thing is for certain — Sokolovsky has no shortage of optimism for the Warp’s long-term prospects.

“Five to 10 years down the line, we should be in a very, very good position, being competitive with companies like Old Dominion, Saia or FedEx Freight,” he predicted. “And we think we can be a real threat.”

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