Torch Logistics, based in Chicago, has closed an $850,000 pre-seed equity funding round led by Schematic Ventures of San Francisco. Torch believes it is the first and only digital freight marketplace and matching platform to be purposefully built to address the short-haul market.
Yesterday’s fast is today’s normal when it comes to shipping and delivery. It also stands to reason that today’s fast will become tomorrow’s normal as e-commerce stretches the boundaries of supply chain networks. Rising consumer expectations require faster deliveries and inventory positioned closer to the consumer. Short-haul freight is now too important to entrust to a run-of-the-mill brokerage, in Torch Logistics’ view, so they are going after the lower-mileage hauls that traditional brokers may overlook or overprice.
“Short haul is its own thing,” said Abtin Hamidi, founder and CEO of Torch. “Torch was born out of necessity. I have been inside the world’s largest and most successful brokerage as well as the best and brightest digital freight brokerages; what’s missing oftentimes is focus. Few brokers focus on one specific thing and just nail it. There are examples of specialized brokerages in heavy haul, time critical and a few other spaces but no one focused just on short haul.”
If anyone would know the opportunity in a space like this, it would be Hamidi, who cut his teeth at Echo early in his career, rising through the ranks of their sales organization and eventually becoming a director. Hamidi also served as president of XPO Logistics’ brokerage branch in Chicago before eventually co-founding digital freight-matching technology firm Cargo Chief as well as serving in an executive role at Cargomatic, the original digital freight broker.
“The pandemic has accelerated the already growing demand for reliable short-haul capacity. Over the past decade, the average length of haul has decreased by more than 30% due to e-commerce and the dynamics of retail, CPG and other shippers. The majority of the truckload transactions are now considered short haul, yet there are very few reliable, consistent options for shippers that are founded in digital principles,” said Hamidi when asked why now is a good time for his company to raise capital.
Julian Counihan of Schematic Ventures led the investment round and said, “While most supply chain networks have evolved to meet the demands of modern e-commerce, shippers still struggle to find consistent and efficient carriers for short-haul loads. Traditional brokers have had difficulty with the category given the idiosyncrasies and historical infrequency of short-haul transportation. Abtin saw an opportunity to fill the gap between shipper needs and broker ability. We’re excited to lead Torch’s seed round and partner with a great entrepreneur building the future of short-haul technology.”
What the investors see in Torch as key differentiators from the competition is simple — Torch is the first network to launch with:
● A commitment to the short-haul category.
● Technology purpose-built for the short-haul industry.
“Leveraging advanced image processing and machine learning, Torch’s intelligent perception awareness capabilities for data and data aggregation in the supply chain and logistics lumascape are helping our customers and carriers operate more efficiently. As the variability of the market continues, so needs the sources of data and machine-learning abilities to drive best-in-class pricing and liquidity reliability — in real time,” stated Mike Bosch, vice president of engineering for Torch.
For shippers, Torch’s commitment to short haul means more efficient load placement, higher service levels with trusted carriers and better pricing. For carriers, Torch can provide a consistent, high volume of loads from quality shippers that will maximize asset utilization within their region. For both shippers and carriers, Torch’s technology creates an experience tailored to the specific needs of shipments under 550 miles.
Currently servicing blue-chip clients across the country, Torch has seen significant growth through partnerships with large shippers and logistics service providers alike.