Flexport Acquires Convoy’s Tech Stack to Expand Logistics Capabilities
In a strategic move aimed at bolstering its technological capabilities and enhancing its position in the competitive logistics industry, Flexport has recently announced the acquisition of Convoy's technology stack. While Flexport has secured the technological assets, it is important to note that this acquisition does not encompass Convoy as a company or any of its associated liabilities.
Despite not assuming ownership of Convoy's business, Flexport has expressed its intent to revive Convoy's full-truckload service in the near future. Encouragingly, some of Convoy's prominent customers have already shown a willingness to resume their engagement with the service.
Convoy had established itself as a technological leader in the trucking sector, aligning with Flexport's overarching mission to streamline global commerce. Given that trucking plays a vital role in every international shipment handled by Flexport, the acquisition opens doors to a vast network of over 400,000 truck drivers and 80,000 carriers within Convoy's ecosystem. Furthermore, Convoy's technology includes advanced procurement tools that automate the supply side for 98% of load bookings. This automation promises to substantially reduce carrier costs, not only in the truckload segment but also in drayage and cartage operations in the long run.
Flexport's decision to acquire Convoy's technology goes beyond the technological stack; it reflects their commitment to addressing their customers' desire for a comprehensive logistics solution. The company's strategy for its trucking business unit differs from Convoy's and other large truck brokerage firms. Instead of pursuing massive Fortune 500 full-truckload (FTL) accounts, Flexport aims to offer an array of trucking services tailored to the diverse needs of its clientele. This strategic shift, they believe, will help them avoid the complexities and financial challenges faced by large-scale players in the industry.
Flexport's expanded suite of trucking services will include not only FTL but also less-than-truckload (LTL), drayage (ocean), cartage (airport), and eventually intermodal (rail) trucking services for customers of their international freight forwarding services. This comprehensive approach is designed to streamline the entire logistics process, ensuring that every container is efficiently transported to its final destination.