Earlier this year, TNX caught our eye as an tech up-and-comer. With all three co-founders collected in their Chicago offices last week, we seized the opportunity to see how things have gone in this crazy year in TransportTech. The company was founded by Alex Hoffmann, Josh Bryan, and Jonah McIntire. They merged expertise in supply chain, machine learning, and financial markets. They chose New Zealand as a “pilot market,” and as the product has evolved and the team has grown, they’ve opened markets in Auckland and Berlin. Their official headquarters is Berlin, according to Crunchbase. They also have an office in Chicago.
TNX describes themselves as an optimization and communication tool for 3rd party logistics companies and large-frequency shippers. Their cloud-based technology is aimed toward helping dispatching staff sift through the multitude of possible transport alternatives to find the right one for each situation. A lot of different kinds of freight are supported, from high value requiring special care to bulk looking for the best price.
For private fleets they provide automatic co-loading and multi-stop sequencing of transport jobs “to keep trucks moving fuller, longer.” For transport companies operating with a group of subcontractors based on long-term rates, they offer “intelligent selection” to achieve the best cost-to-serve while maintaining service levels.
For transporters or cargo owners looking at improving procurement costs by opening up jobs to the spot market, their technology can also improve rates for a curated spot market. Cargo owners can maintain control over the group of carriers and service quality, while benefiting from the additional competitive pressure.
FreightWaves: So what’s been up in 2018? How have things changed for you all since we spoke earlier in the year? Do you have a lot human personnel that follows up on the daily information?
Alex: We’re on a mission to solve logistics companies on the road in particular. We want them to get more truck per truck. It’s all about transport planning. Which multiple cargo pieces get in your truck, and from where, is it contract or from spot.
Jonah: It’s 100% software driven. The software is doing classic transport planning, taking all the available jobs and helps trucks run fuller and longer. It’s also using some AI machine learning to make something good into something even more attractive. One part is the planning part, the classic part. What you find in practice in the last couple of TMS generations of software is that the plans don’t always get played out because of how the human factor interferes. The carriers have their own incentives and what works, and dealing with their own dispatchers. When dealing with these unknowns and the human factor. So, you have to strategize with how to tender through statistical machine learning. It’s a very practical AI.
Say you’re a carrier and you take a transport job quickly, you reveal your preferences. You’re willing to accept the work, and that particular job was attractive. Maybe next time we discount the offer a little bit and trying to see what your preferences are. If you accept say something lower but not as fast.
We’re not like a Convoy, trying to make money in the middle. We’re a SaaS business and we license the software. The minimum level is $150k. We’re targeting 2% of the value of the spend.
It’s been live since January 2017—about 18 months. We’re growing at 20% month on month. We’ve got about 15 or 16 very active carriers, and about 100 more that are less active.
FW: Are you all still working in Berlin and New Zealand? What are the differences? How do you plan on working in these various markets?
Jonah: It’s not a short-term advantage to be in these different markets. It’s crazy how many companies do well in one market and fail on the shores of another.
Alex: Because we started off as global our prospects are better. Each month Europe and New Zealand is growing. Europe will take over because of the size of the market. Yes, we’ll move into the states when we find a strong customer.
Jonah: We’d rather come to the US with an anchor customer with someone overseas that wants to help us bridge the gap.
Alex: It’s a very deliberate decision we must make.
FW: What would you say is your greatest strength?
Jonah: We’re product people. We’re engineers. We’re looking to solve a real problem with our tech. A combo with a great product strategy and engineering. We’re the adults in the room. We’re conservative about what we say this product can do. We want to offer a steady, strong proposition that can win out in the market.
FW: What are the biggest challenges you’re facing when it comes to getting customers to implement your tech? Is there a lot of follow up after you land one?
Jonah: TMS provider and transport planning and tendering is what we do. None of these guys that do the TMS and AI have a vision for how they bring these two things together. Eventually those companies will implement it, but it will take years to develop.
Cloud got ignored for a long time with TMS. Then people got on board after they began learning the economics. Same thing with AI. It’s the way our AI continuously improves the user experience that’s giving us and our customers a head start over other TMS providers.