Seatle-based company Convoy has reportedly canceled all loads (as of 18 October). FreightWaves has seen a letter sent to customers confirming it is taking “several necessary steps to prepare Convoy’s business for a transition.”
Details are still sketchy, but it’s understood that more information will be shared in the coming days. Customers have been advised to contact the business via email for any support.
FreightWaves says Convoy’s load board went blank on Wednesday, with rumors that it might have gone bankrupt.
Heading into troubled water
The freight broker business was booming during the COVID-19 pandemic when the volume of shipments increased. “The volumes have now come down, and the cost of deliveries have reduced dramatically for trucking type of movement in the US,” says Locate2u CEO and entrepreneur Steve Orenstein.
The company started moving into efficient freight in 2015, building technology to connect shippers with carriers. Its last investment came from existing investors, at around $260 million.
Many brokerage companies have been clutching at straws for the last few years. “It looks like they potentially weren’t profitable; they needed to raise some more money,” says Orenstein.
Eight years in a logistical Convoy
The company was last valued at $3.8 billion over a year ago. Former Amazon executives founded it. The Wall Street Journal reports that Convoy is considering “selling off teams, software or intellectual property,” according to someone familiar with the matter.
Earlier investments came from vehicles backed by Bill Gates, Microsoft’s co-founder, and Amazon’s founder Jeff Bezos. Three years into the business, U2 lead singer Bono also invested in the company.
A bleak future
Eight years later, it doesn’t look good for Convoy. Similar companies aren’t better off either. “Some of the banks have been lending money to a number of these digital brokers, and apparently their balance sheets don’t look great,” says Orenstein. There are concerns among industry experts that there could be more digital freight brokers finding themselves in deep waters in the coming months. “Hopefully, these businesses can sort of control their costs and funding and recover.”
FreightWaves reports that Convoy has hired an investment bank to help it explore possible options for its future ownership and capitalization.
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Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
