The recent collapse of venture capital-funded Convoy was a major topic of discussion at the Investing in the Transportation & Logistics Industry Conference in New York City. Moderator Marc Blubaugh questioned panelists about the innovative technology that led to Convoy’s success in the trucking industry. Echo Global Logistics CEO Doug Waggoner, a traditional 3PL impacted by Convoy, acknowledged the strength of Convoy’s technology but also pointed out its shortcomings in market position.
Waggoner explained that Convoy focused on short-haul regional freight, while Echo Global operated on a larger scale with longer average haul distances. He mentioned that Echo’s internal classifications divided carriers into tiers, with tier 5 carriers like Knight-Swift offering the best pricing. Despite Convoy’s advantages, Waggoner noted that Echo often secured rates 50 cents per mile lower than the market average.
The discussion also highlighted the potential pitfalls of venture capital funding, with panelists emphasizing the importance of disciplined business practices. Kendra Tucker, CEO of Truckstop, expressed compassion for Convoy’s collapse, attributing it to the rapid influx of venture capital in the transportation industry. The panelists agreed that while Convoy’s technology was impressive, it was not necessarily unique compared to other industry players.
Overall, the Convoy collapse served as a cautionary tale about the challenges of managing rapid growth and VC funding in the transportation industry. Despite its downfall, Convoy’s legacy lies in driving technological advancements across the industry, ultimately benefiting all players in the market.
