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Project44 aims to revamps transportation’s data networks with latest funding round

Project44 chief executive Jett McCandless (Photo: project44)

Start-up looks to spread adoption of more nimble APIs to replace legacy EDIs used widely in transportation industry.

Project44 announced it’s raised $45 million in new funding as the company seeks to automate how carriers and shippers book, track and manage their freight.

Jett McCandless, chief executive of the Chicago-based company, says the widely used electronic data interchange (EDI) is not keeping up the needs of a modern freight system changed irrevocably by e-commerce.

The need to track and manage an ever wider array of truckload and less-than-truckload freight requires switching EDIs for application programming interfaces (APIs), which automate how freight transactions are recorded and communicated by back-office software.

EDI “is like the old entertainment centers with a tube television connected with different cables to different components,” McCandless said. “But now flat screens connect easily to other components and that’s what APIs do.”

“EDI is the incumbent and a lot of companies still use, but so much more can be done with APIs,” he added.

The new investment round, which was led by Palo Alto-based Sapphire Ventures, brings the company’s total funding to over $90 million.

Other existing investors including 8VC, Chicago Ventures, Emergence Capital, Omidyar Technology Ventures, OpenView Venture Partners, and Pritzker Group Venture Capital also took part in the round, along with new investor Insight Venture Partners.

Project44 says it’s addressing the “transportation visibility” market through wider adoption of APIs for software used in load planning and tracking, driver dispatch, and customer billing.

The APIs allow data from those systems to more easily communicate with one another and provide end-to-end tracking and management of transportation services.

McCandless says the new funding will be used to increase headcount and expand marketing efforts. He says project44, which currently has 120 employees, is looking to add another 60 positions with the new funding before year end.

API penetration is still relatively low among carriers. McCandless says project44’s APIs handle about 75,000 truckload and less-than-truckload moves per day, out of an addressable market of 1.3 million moves per day.

But the company has signed on marquee names in surface transportation. Knight Swift Transportation (NYSE: KNX), Werner Enterprises (NASDAQ: WERN), FedEx Freight (NYSE: FDX), Schneider International (NYSE: SNDR) and Old Dominion Freight Line (NASDAQ: ODFL) are among the carriers using project44’s API platform. It’s also integrated into major transportation management software vendors such as JDA and McLeod Software.

Smaller carriers are also providing a new market for project44, McCandless says. The increasing use of electronic logging devices and telematics allows those carriers to connect their assets to API-enabled freight management systems. Having API-based connectivity to shipper networks is increasingly necessary to become a carrier of choice, McCandless says.

“Small carriers never supported EDI because of the cost of implementation,” McCandless said. “But it’s possible for them to leapfrog larger carrier because they don’t have the legacy cost.”.

As for penetrating the intermodal market, McCandless says it’s looking to sign large carriers in the sector. He says the railroads are enhancing their API connectivity to shippers. But drayage trucking remains one challenge in intermodal, McCandless says, as ELDs and telematics are not as widely used in that segment.

“That mode is very early in its technology adoption,” McCandless said. “But there are some progressive dray companies that are we are working on solutions with.”

 

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Michael Angell, Bulk and Intermodal Editor

Michael Angell covers maritime, intermodal and related topics for FreightWaves. His interest in transportation stretches back several generations. One great-grandfather was a dray horseman along the New York waterfront and another was a railway engineer in Texas. More recently, Michael has written about the shipping industry for TradeWinds, energy markets for Oil Price Information Service, and general business topics for FactSet Mergerstat and Investor's Business Daily. When he is not stuck in the office, he enjoys tours of ports, terminals, and railyards.
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