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FinanceNewsTechnology

Transplace acquires collaboration platform Lanehub

Transplace, a leading transportation management and logistics technology provider, announced Tuesday that it had acquired Green Bay, Wisconsin-based Lanehub. Lanehub is a freight collaboration platform that allows shippers and carriers to see where dedicated lanes in their networks overlap and to partner on improving asset utilization and reducing waste.

Transplace, based in Frisco, Texas, has $9 billion of freight under management and offers a wide range of technology and logistics solutions to its customers.

Lanehub demonstrated its technology at FreightWaves’ Transparency18 event in Atlanta in May 2018.

“This is a major milestone for our company because of how much more we can do as part of Transplace, a true leader in the global logistics industry,” said Mark Hackl, founder and CEO of Lanehub, in a statement. “With an industry-leading technology platform and $9 billion in freight under management, Transplace opens the door to an unrivaled network of carriers and shippers for unsurpassed freight lane collaborations and transportation cost reductions. We have high expectations about the opportunities ahead for our teams and customers as we join the Transplace organization.”

Frank McGuigan, chief executive officer of Transplace, said in a statement, “The strategic acquisition of Lanehub reinforces our mission to offer our customers the most advanced technologies, giving them a competitive advantage in the marketplace. 

“Our expectation is that the combination will create even greater opportunities to connect and convert traditional one-way moves into more collaborative round trips, significantly reducing empty miles and poor asset utilization for the entire community of shippers and carriers on the Transplace platform. Unifying our teams and technologies is a win for all involved,” he said.

McGuigan explained in a phone interview with FreightWaves that the deal made sense because the companies’ missions were so closely aligned. Transplace focuses on identifying and executing what it calls “dynamic continuous moves” by combining shippers’ lanes into a balanced supra-network and fully utilizing available trucking capacity. 

Similarly, Lanehub built a social network that enables shippers with overlapping transportation needs to collaborate on lanes, using algorithms to calculate cost savings and propose opportunities. More than 150 shippers uploaded freight data and lanes representing $23 billion in transportation spend to Lanehub’s platform; the company developed an expertise in consumer packaged goods, food, retail, manufacturing and automotive freight.

“It’s a pretty clean fit to bring them on,” McGuigan said, noting that while Lanehub was not a logistics provider and did not move freight, Transplace had the authority from its customers to automate shipments. 

“In conversations with the Lanehub community, shippers were thrilled with the software, the scale and opportunity, but it takes a lot to get from identification to execution,” McGuigan said.

Lanehub’s collaboration model differs from how Transplace manages freight because in Lanehub, shippers see detailed information about each other’s networks so that they can decide where to work together. It’s a transparent model that generates trust between collaborators. Most of Transplace’s customers, on the other hand, have wanted to keep their freight data closer to their vests; they don’t necessarily need or want to know whose freight is filling the other leg of a dynamic continuous move.

The Lanehub acquisition allows Transplace to offer that kind of peer-to-peer transparency and collaboration to customers who want that kind of partnership, McGuigan said. Meanwhile, Transplace can offer its visibility technology to Lanehub’s customers.

“Our system recognizes opportunities for millions of dynamic continuous moves,” McGuigan said. “AI comes into play as you’re assessing the viability of every single one and filtering it to something that’s executable. What’s cool about Lanehub’s system is that their customers — because it’s a shared community — can see opportunities from any other customers and look for those views. Our customers inside our platform don’t have those views.”

McGuigan said that Transplace management learned about Lanehub through a number of different channels, including industry research and some shared customer relationships (Transplace and Lanehub have about 5% customer overlap).

“We met them and they were 100% focused on doing the right thing, had terrific penetration and a small team that absolutely believed more networks are going to be about driving continuous moves, increasing private fleet utilization and reducing carbon footprint. That’s a religion for them like it is for us,” McGuigan said.

Citing recent trends in technology startups and changing venture capitalist behavior, McGuigan said that he expected a shakeout in the tech space. Valuations based on gross margins and unit economics rather than sheer revenue growth should make it easier to transact M&A deals in 2020, McGuigan said, and Transplace is looking to roll up more technology companies as part of its platform offering.

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John Paul Hampstead, Director, Passport Research

John Paul conducts research on multimodal freight markets and holds a Ph.D. in English literature from the University of Michigan. Prior to building a research team at FreightWaves, JP spent two years on the editorial side covering trucking markets, freight brokerage, and M&A.

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