Flexport, the supply chain logistics platform, is set to acquire the technology assets of Convoy, the former digital freight network. In an internal memo sent by Flexport CEO Ryan Peterson, it was revealed that Flexport plans to restore Convoy’s trucking logistics services for its customers in the coming weeks. Although the terms of the deal were not disclosed, Peterson stated that the purchase price relative to value is modest.
Key Takeaway
Flexport is acquiring Convoy’s technology assets to enhance its own supply chain logistics services, providing a one-stop shop for its customers. By incorporating Convoy’s sophisticated procurement technology, Flexport aims to lower carrier costs and expand its range of trucking services.
Flexport’s Plan for Convoy’s Technology
Flexport will not acquire Convoy’s business or liabilities but will retain a small group of team members from Convoy’s core product and engineering team. There are indications that Convoy’s co-founder and CEO, Dan Lewis, might join Flexport, although no official confirmation has been made. The acquisition allows Flexport to leverage Convoy’s advanced tech stack and procurement technology to streamline and automate the supply side of its logistics operations.
Expanding Flexport’s Services
The acquisition of Convoy’s technology assets enables Flexport to offer a full range of trucking services to its customers, including FTL, LTL, drayage (ocean) trucking, cartage (airport) trucking, and eventually intermodal (rail) trucking services. Flexport aims to become a comprehensive logistics solution, meeting all of its customers’ needs through a single platform.
Driving Cost Efficiency
Flexport plans to use Convoy’s technology to improve cost efficiency by lowering carrier costs. By automating the supply side of load bookings, Flexport aims to optimize its operations and reduce expenses. This strategic move aligns with Flexport’s goal to become more financially stable and profitable. With the recent cost-cutting measures, including layoffs, Flexport is focused on streamlining its operations and offering a superior service to regain profitability.
The Impact on the Freight Industry
Flexport’s acquisition of Convoy’s technology assets signifies the increasing significance of digital freight solutions in the industry. By incorporating Convoy’s innovative tech stack, Flexport aims to stay ahead of the competition and provide a seamless, end-to-end logistics experience for its customers. The acquisition also showcases Flexport’s commitment to responding to customer demands and becoming a one-stop shop for all their logistics needs.
As Flexport combines Convoy’s technology with its existing capabilities, the company is poised to offer a more comprehensive and efficient supply chain logistics platform in the market. This acquisition is a significant development for both Flexport and Convoy, reshaping the digital freight landscape and paving the way for the mainstream adoption of technology in the freight industry.
