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August 28 2023

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40 Journal of Commerce | August 28, 2023 www.joc.com Surface Transportation a platform that fellow brokers can use to tap into Convoy's shipper cus- tomer loads. In May, a program co-led by Convoy to drive appointment scheduling standards across brokers and transportation management sys- tem providers also gathered momen- tum, signaling Convoy's position as a technology leader in truckload. Collectively, those products paint a picture of a freight intermediary aiming to innovate in what some consider a staid part of the industry. But some industry veterans have been critical of this approach, arguing that Convoy is merely repackaging long-ago tested truckload products in a shiny new wrapper. At the same time, Convoy has undergone several rounds of layoffs beginning in summer 2022, just months after it landed a $410 million funding round that pushed its valua- tion at the time to $3.8 billion. The truckload market, in gen- eral, has suffered for most of 2023 under the weight of easing demand due to bloated inventories, overca- pacity generated by new capacity entering the market during the COVID-19 pandemic and rising operating costs for carriers. Those factors have combined to pull down truckload rates, which in turn has squeezed broker margins. Convoy has long argued its approach — using the data gleaned from its app to secure and track capacity — eventually will lead to better margins on lower freight costs for shippers. JOC email: eric.johnson@spglobal.com routing of these assets," Convoy said in the statement. "This rigidity often leads to an inadequate response when demand fluctuates — any surge in volume can result in the need for expedited carriers, who charge a premium for their services." Just-In-Time uses Convoy's brokerage network of more than 400,000 trucks and a pool of several thousand drop trailers, which the company said enables it to reroute trucks and trailers to facilities nationwide within days. That, in turn, allows shippers to access just- in-time services "while eliminating the need for expedited services." Latest attempt at innovation The new product is the latest in a string of releases from Seattle-based Convoy in recent years. Those include Convoy Go, the company's drop- and-hook program, and Guaranteed Primary, which ensures capacity for priority truckload freight for shippers willing to agree to a fixed margin on rates. More recent releases include a visibility tool that builds on mile- stone data collected from its app and its drop-and-hook trailer assets and TRUCKLOAD BROKER CONVOY on Aug. 10 said it will begin offering a product that guarantees on-time arrival within 15 minutes of a sched- uled delivery time. Convoy has been testing the product, called Convoy Just-In-Time, over the past year with a group of automotive and industrial manufac- turers and consumer packaged goods companies, with 98% of those test shipments arriving within the allot- ted 30-minute delivery window. If a shipment booked using Just- In-Time arrives more than 15 minutes early or late, the broker said it will cover an agreed-upon portion of pen- alty costs owed by the shipper to the factory or retailer delivery facility. "Shipments that arrive early or late can result in production shut- downs that cost manufacturers on average $22,000 per minute," Convoy said in a statement. "Similarly, con- sumer product companies often need to adhere to stringent on-time deliv- ery policies at retailers' facilities or incur fines that can increase the cost of each shipment by thousands of dollars. These same retailers then face out-of-stock or out-of-shelf invento- ries and lose out on realized sales." Convoy said the goal of Just-In- Time is to give shippers the ability to meet tight delivery windows while overcoming asset-based carriers' historical lack of flexibility in help- ing their suppliers adhere to on-time performance metrics from their retail and industrial customers. The company did not reveal the differ- ence in price between Just-In-Time and its standard truckload service. "To meet the stringent require- ments of just-in-time shippers while maximizing fleet utilization, these carriers need to plan weeks in advance to position their trucks and drop trailers, and optimize the On the dot Convoy promises on-time truckload deliveries with new guaranteed product By Eric Johnson "Shipments that arrive early or late can result in production shutdowns that cost manufacturers on average $22,000 per minute." Just-In-Time uses Convoy's brokerage network of 400,000 trucks and a pool of several thousand drop trailers. Credit: Convoy

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