This morning Convoy, the Seattle-based digital freight brokerage, announced that it has added a new feature—automated bidding for carriers—to its Request a Load offering. Convoy will now automatically bid on loads for carriers based on rate, preferred lanes, and pickup dates specified by the carrier. When a carrier wins a load, Convoy sends a push notification, and the carrier simply taps to confirm.
The feature is already live and nationwide.
Automated bidding is designed to minimize the amount of time carriers spend searching for loads and maximize the time trucks spend driving and generating revenue. When FreightWaves first learned of Convoy’s new feature, we immediately wondered what the market implications of automated carrier bidding would be—wouldn’t it tend to drive down prices?
It turns out that winning loads in Convoy’s platform is not just about having the lowest price, because Convoy also wants to connect its customers with high quality carriers. Service levels and on-time rates, as well as how many times or how often a carrier uses Convoy’s app, are weighted into a carrier quality score that helps high-performing carriers win freight even when they don’t offer the lowest rates.
Nikhil Jaipuria, director of product at Convoy, spoke to FreightWaves by phone.
“There are three basic scenarios we’ve seen so far where carriers use the feature to save time,” Jaipuria said. “A carrier may be looking for a load out of Seattle for a certain rate on a given day of the week, and they post that as a request. Or, if a carrier regularly delivers for a customer on a given day of the week, they can set up a recurring request looking for a load getting out of Seattle on a certain day of the week. Finally, if a carrier is consistently running a given lane, like the I-5 corridor, we can look for future loads that match their preferences.”
Automated bidding does not mean that carriers are locked in to certain rates, Jaipuria stressed.
“One of the options in our app allows carriers, as the market softens or tightens, to change their rate,” Jaipuria said. If a carrier has posted a rate that does not match market conditions and is unlikely to win any loads, Convoy can alert the carrier to adjust the rate.
“And when a carrier wins a load,” Jaipuria said, “we provide a whole lot of information about the load, including pick up and delivery details, commodity type, and everything that a carrier needs to successfully deliver the load.”
This feature is another way, beyond automated detention payments and drop trailers, that Convoy can increase carrier engagement in its platform and ‘stickiness’ in its app. Now carriers have to do even less work to benefit from Convoy’s increasing freight density and intelligence into market prices.
“What this feature will do is allow us to match carriers and shippers more efficiently, and at the end of the day it saves both money,” Jaipuria concluded.