Scottsdale, Arizona-based less-than-truckload booking platform MyCarrier is growing revenue and shipment counts quickly after an important inflection point in the firm’s business plan.
Founded in 2017 by GlobalTranz veterans Michael Bookout and Chris Scheid, MyCarrier raised an $8 million Series A in March 2021. The platform’s vision was to connect small and midsized shippers to LTL carriers, returning automated quotes based on shipment characteristics provided by the user, as well as enabling booking execution with electronic bills of lading, enhanced visibility, dynamic insurance and payments.
If MyCarrier sounds like a relatively normal transportation management system, albeit one that serves the highly analog world of small less-than-truckload shippers, that’s because it is. But the secret to MyCarrier’s success, besides the quality of its technology, is a unique distribution model and pioneering monetization strategy. In other words, while MyCarrier is leading the charge in LTL connectivity and electronic bill of lading technology, it’s also innovating a new business model that the rest of the FreightTech sector can learn from.
When MyCarrier launched, its primary paying customers were various premium LTL carriers, not SMB shippers. The idea was simple: If MyCarrier could get a critical mass on its platform and build robust integrations with the carriers, the superior data quality of its electronic BoLs would allow a degree of automation and flexibility that would generate enormous efficiency gains for the carriers. And carriers would be willing to pay for those gains.
“MyCarrier was founded to become the ubiquitous platform that connects customers and carriers instantly, without barriers, to fuel the future of supply chain,” said Scheid, MyCarrier’s president. “From the beginning, our mission has been to deliver never-before-offered technology that streamlines the carrier and shipper experience to create exceptional business and customer outcomes.”
MyCarrier CEO Bookout added, “Our vision and approach, working closely with carrier partners and customers, are helping to break down technology fears previously seen throughout the SMB market. SMB shippers know they need to evolve, but have been left behind by most of the solutions in the market today. Thankfully, the active participation from our customers and carrier partners is helping us deliver innovative freight management solutions and accelerate technology adoption.”
But how does a software startup rapidly scale distribution in a fragmented, low-tech market like SMB shippers, full of customers that don’t spend very much money on transportation in the first place? MyCarrier built versions of its TMS that could be white-labeled by the carriers and distributed by the LTL carriers’ outside sales forces. Old Dominion Freight Line, for example, has approximately 250 outside salespeople who call on shippers regularly. Those sorts of carrier salespeople who travel their territories pounding the pavement are now distributing MyCarrier’s software to SMB shippers as part of their freight sales process.
Piggybacking on the carriers’ sales forces has unlocked rapid growth in MyCarrier’s marketplace, which grew platform shipments by 52% year over year to reach 514,400 shipments in the second quarter of 2022. The number of active shippers in Q2 grew 57% year over year to 5,162.
But that strategy only works when the software provider is truly creating value for both sides of the marketplace — shippers and carriers, explained Travis Rhyan, MyCarrier’s chief product officer. (Rhyan previously served as FreightWaves’ chief product officer.)
“MyCarrier has just started its journey, delivering strong value to both carriers and shippers,” Rhyan said. “MyCarrier is in such a unique position, having a large shipper base and over 99% of common carriers integrated into the platform. Plus, our platform shipping volume, on target for 2.5 million shipments this year, will allow our platform to provide unseen predictive data insights to both sides. Not only can we significantly streamline the ‘quote to order to invoice’ workflow, but we can layer additional services onto the platform while extracting data-driven intelligence for relevant parties.
“Ultimately, MyCarrier will transform and accelerate both sides’ operational maturity, improving automation for the carrier and streamlining workflows for the shipper.”
We’ve seen other FreightTech startups build free technology for one side of the market or the other in order to accelerate marketplace growth and improve transaction liquidity. Uber Freight built free fleet management software for small fleets to help dispatchers assign Uber Freight loads to drivers and manage their trips. Convoy built a TMS for small and midsized shippers, largely for the same reason as MyCarrier — because digitizing and standardizing data formats and document flows is a necessary first step to automation.
The challenge has always been to monetize the TMS or portal once it’s built. Otherwise, FreightTech startups may find themselves in the position of building and supporting a software platform with thousands of users for free while having to content themselves with relatively thin take rates on the transactions in their marketplaces.
Building software is expensive, but it can be justified by high-quality subscription software revenue that capital markets value at a high multiple. By building software once and selling it many times, software companies eventually achieve very high gross margins as revenue outgrows expense. Building free software but only getting paid a thin margin for moving freight is a kind of a trap (especially when adding technical features over time), where a company is forced to take on the expense of software engineering and development without the upside of the scalable revenue model.
In the second quarter of 2022, MyCarrier began monetizing the shippers on its platform, converting its free product to a “freemium” model that charged for additional functionality, like eBoLs and shipment visibility for non-platform carriers, unlimited pickup locations, detailed reporting and dedicated support chats.
MyCarrier has already converted more than half of its free users to paying customers and recorded monthly recurring revenue of $675,000 in the second quarter of 2022, up from approximately $300,000 in the second quarter of 2021. MyCarrier will hit an $11 million annual revenue run rate next month, according to MyCarrier Chief Revenue Officer Tommy Barnes, and is projected to more than quadruple its shipper and carrier ARR this year.
“MyCarrier and its go-to-market strategy have been based on a strong carrier foundation. It was purposeful and required for the SMB market,” Barnes said. “All other shipping management solutions are one-sided, benefiting a carrier, 3PL or shippers. MyCarrier is unique, designed from its inception to streamline shipping and optimize carrier operations by providing a true digital bridge between the two. Ultimately, both parties win because of the immediate efficiency and cost-saving opportunities it provides for both groups.”
Bookout and Scheid were able to capitalize on what they knew were the weak points of the less-than-truckload industry — low technology adoption, fragmented shipper landscape, small transaction sizes, little value add from intermediaries — to build not only a technology solution but a business model suited to address that specific market. Because LTL’s market structure is essentially the mirror image of truckload, with a fragmented shipper community and a consolidated carrier community, they recognized that the quality of inbound data from shippers was the key to driving efficiency at the carriers.
Now MyCarrier has its sights set on a market with different characteristics and a different competitive landscape: truckload (and other modes that are soon to follow). Small truckload shippers often come with a relatively high cost to serve owing to their irregular shipping schedules, lack of technology and low volumes, but MyCarrier is betting that it can roll up these shippers onto its platform, aggregate the volume and present an attractive line of business to large capacity providers.
Yl
I use them for LTL, great system.
flored deforp
I do not understand this, it sounds like many other companies already doing this. (The difference explained was not apparent to me) and LTL carriers (an ever-shrinking pool of companies) and large volumes of freight do not need brokers in 2022. Just my humble interpretation of this article.
M B
MyCarrier is not a broker but a technology enablement platform that lets shippers digitally connect to all the carriers they do business with. The platform dramatically streamlines the quote to order to invoice workflow – saving time and resources. What’s different is that 1) they deliver value to both shippers and carriers, enabling them to monetize both sides; 2) they have strong partner agreements with many of the top national and regional carriers, enabling them to increase the level of API use and visibility; and 3) they provide data intelligence tooling to both sides, enabling carriers to advance their rating operations while helping shippers identify issues with their shipping processes, ultimately costing them money. These things are unavailable to the SMB market or enterprise in many cases. The platform will be as disruptive as the early travel industry platforms, such as Expedia.
Cutabove The Rest
Freightview has been around before MyCarrier. Since this article is another commercial – note: “Travis Rhyan, MyCarrier’s chief product officer. (Rhyan previously served as FreightWaves’ chief product officer.)” – let’s give some print to Freightview by CH Robinson.
Freightview was founded in 2013 4 yrs before it was a thought for Bookout and Scheidto. Freightview equips shippers with revolutionary technology to streamline their freight quoting, booking, tracking and reporting. Freightview has since expanded to a one-stop shipping platform that offers parcel and truckload modes as well.
Freightview, transportation management system for small and mid-sized businesses (SMBs), is recognized as the FedEx 2021 Compatible Solution of the Year. Freightview was selected for its innovative approach to freight automation and parcel connectivity for SMB and e-commerce customers, a traditionally underserved segment in the transportation management system (TMS) marketplace.