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NewsTechnologyTruckingTruckload

Convoy says 100% automated brokering is now a reality in select markets

Ziad Ismail, Convoy’s chief product officer, told FreightWaves in February that the automation of pricing and load matching were two separate problems. At the time, Convoy was solving for the first – load matching. Now the company has announced it has solved the second.

Convoy said on Dec. 18 that it is now automating 100% of brokered loads in top freight markets and that the automation process is growing in markets across the country. Atlanta, Boston, Dallas and Los Angeles are among the areas where Convoy is automating 100% of pricing and load matching.

“Up until this point, we have had some human involvement in setting these prices, and sometimes a driver would call into a brokerage team to get the right rate,” Ismail told FreightWaves.

In select markets, the entire process of moving freight is now automated. In February, Convoy began matching loads automatically, which is now happening in 98% of the country. The process takes a tendered load and algorithms identify available trucks in the Convoy network and as bids are accepted or rejected, the system analyzes the process and makes adjustments as necessary to improve the chances the shipment is accepted.

The addition of the automated brokering component further streamlines the process and drives greater efficiency for every party involved in the transaction, Ismail said.

“We think this is the future of the brokering model, not only that it is automated but that the heart of it is a computer science model,” he said, adding that existing Convoy brokers are working on new markets and opportunities so there hasn’t been a displacement of workers. “What we are seeing is that this is going to happen in the industry as well. And we think that as you build a more efficient model, it’s going to shift the work.”

Convoy automated brokering national map
A map provided by Convoy that shows the growth of its 100% automated brokering in markets across the U.S. (Photo: Convoy)

Convoy’s machine-learning algorithms manage the entire process, from setting rates to helping connect those loads to carriers. As always, a carrier has the option of whether to take a load, and if loads are repeatedly rejected, the algorithm will adjust the rate, which can save hours or even days from the current manual process of negotiating rates to get shipments moved.

“This breakthrough on automated platform pricing by Convoy on high-density cargo lanes is significant and definitive towards achieving a future of truly automated touch-of-a-single-button-type brokering,” said Silpa Paul, team lead of commercial vehicle research and consulting at Frost and Sullivan. “Digital freight providers have been around for years, but where they have struggled is precisely in automating pricing. Most have had to create a system of customer account executives with call support to actually complete the brokerage process. Thus, they have been operating more or less like traditional brokers.”

It’s important to note that the process does not lower rates for carriers or raise rates for shippers, he said.

“Convoy works with shippers and we agree … which freight we are going to take for them, and then it’s up to Convoy to find the right driver for this work and what’s the right price for that work,” Ismail said. “Our models need to learn how the prices are changing so we can [set the right price].”

Ismail said with more than 15,000 brokers in the U.S., it’s impossible for any single company to set the market rate for carriers, which is why Convoy is focused on building tools that help all parties – brokers, carriers and shippers – work more efficiently. He pointed to the Automated Reloads program as an example.

Automated Reloads presents drivers with a package of loads with a single price that take into consideration criteria such as the carriers’ lane preferences, driver hours-of-service availability, driver locations and facility wait times. The idea is to provide carriers with multiple options so they don’t have to spend time looking for backhauls.

“Automating this process doesn’t reduce the rates that carriers are getting for the jobs,” Ismail said. “The thing it is doing is making it a lot easier and a lot faster for them to get the work they need. This work is really about reducing the hassle of drivers and helping them.”

The data science behind the automation of pricing as well as load matching will drive additional efficiencies for the supply chain, Ismail said.

“There will be a shift away from doing the mundane tasks,” he noted. “I think we’ll see the work move to things that are more [difficult] that only humans can do well. Things that are pure data science problems are going to be automated.”

The expectation is that through automation shippers will achieve better cost control and carriers will be able to search, select and deliver loads more efficiently, freeing up time and resources for additional loads or other cost savings. 

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Brian Straight

Brian Straight covers general transportation news and leads the editorial team as Managing Editor. A journalism graduate of the University of Rhode Island, he has covered everything from a presidential election, to professional sports and Little League baseball, and for more than 10 years has covered trucking and logistics. Before joining FreightWaves, he was previously responsible for the editorial quality and production of Fleet Owner magazine and fleetowner.com. Brian lives in Connecticut with his wife and two kids and spends his time coaching his son’s baseball team, golfing with his daughter, and pursuing his never-ending quest to become a professional bowler.

5 Comments

  1. Does this mean all the 3PL carrier reps are now out of a job?

    The 3PL market seems way too saturated with brokers undercutting each other.
    Is the 15% margin realistic anymore?
    Seems 5% or less is the margin of the future. Thanks venture capital funding money losers convoy and uber.
    Overhyped brokerage. Like CH Robinson Coyoye can’t do the same!

    1. I believe the Human element seems much more efficient then having to wait for a bunch of carriers to call in and the load is rejected then they move price down? There is no negotiation, besides every shipper is paying a different price, so what if you need a cheap truck for someone you just aren’t getting it? I don’t think it will effect us too badly anytime soon.

  2. This is a joke .FAKE NEWS if you actually KNOW this business lol. It will be automated less than 1% of the time.

    Why?

    The moment the carrier needs to negotiate? – NOT automated.
    Need a pickup appointment? – NOT automated.
    Need a delivery appointment? – NOT automated.
    Multi-stop load? – NOT automated.
    Running late? – NOT automated.
    Claim issue? – NOT automated.
    Breakdown? – NOT automated.
    Detained at shipper? – NOT automated.
    Update our TMS system? – NOT automated.
    Search their loads in our TMS? – NOT automated.
    Post pickup accessorial charges? – NOT automated.
    Toll payments? – NOT automated.
    Which dock door? – NOT automated.

    I’m sure there are more things like this in my daily life as a driver dispatcher. We are a LONG way off true automation.

    1. The VC investors are clueless Convoy and Uber are burning their money.
      No true innovation, just marketing spin.
      All the big brokers can do the same…
      Truely automous trucks, that is innovation.
      Any office job can be automated to some degree…

  3. I seen night dispatchers and some daytime dispatchers that look like they are 16 years old say ALL I GOT IS A GED AND A COMPUTER CLASS CERTIFICATE and all I do is sit here and wait for the computer to tell me to do something and answer the phone. SO HOW IS THIS CONVOY GOING TO AFFECT THE DISPATCHERS?

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