Hear from CIOs, CTOs, and other C-level and senior execs on data and AI strategies at the Future of Work Summit this January 12, 2022. Learn more
Roughly 80 percent of all cargo in the United States is transported by the 7.1 million people who drive flatbed trailers, dry vans, and other heavy lifters for the country’s 1.3 million trucking companies. The trucking industry, which generates $726 billion in revenue annually, is forecast to grow 75 percent by 2026 — and digital freight broker Loadsmart wants a piece of the action.
Today, the New York startup announced it has raised $21.6 million in a series A funding round led by shipping company A.P. Moller-Maersk’s Maersk Growth investment arm, Connor Capital SB, and Chromo Invest. This funding brings the company’s total raised to date to $34.7 million. Loadsmart cofounder and CEO Ricardo Salgado said the new capital will be used to “scale [the company’s] operations team” and “double down” on product and engineering.
“Our strategy has been to focus exclusively on product development and technology,” Salgado said. “This round of investment will enable us to increase the business exponentially while maintaining high-service levels. It will also enable us to scale without losing the edge on innovation and technology.”
Loadsmart taps artificial intelligence (AI) and hundreds of data sources to automate truckload booking. Its algorithms attempt to keep carriers within its network full and minimize so-called empty miles — trips during which they aren’t carrying anything — by matching loads with roughly 900,000 available transport lanes. Freight shippers on the platform can request instant quotes that factor in the estimated time of loading, the commodity involved, and the overall load, after which they’re offered the choice of booking trucks directly or through Loadsmart’s APIs.
Loadsmart offers GPS-guided real-time cargo tracking through its web dashboard and mobile app, both of which issue notifications throughout every step of the delivery and fulfillment process. And it screens motor carriers daily to ensure what it claims are “the highest safety standards, insurance compliance, and reliability scores” in the industry.
In the three years since Loadsmart launched in the U.S., chief product officer Felipe Capella says it has invested heavily in data analytics.
It recently analyzed all truck roadside inspections performed in the U.S. over the past few years to build a heat map of trucks stopped, which it used to profile trucking companies and the estimated 272,000 carriers running on U.S. roads. And it engineered an in-house system that automates the monotonous (and time-consuming) task of classifying shipping documents, including bills of materials and invoices, using machine learning.
More than 60 percent of its loads today are sourced through algorithms, Capella says, and those algorithms have helped some of its clients reduce spot exposure and procurement execution time by up to 50 percent and 90 percent, respectively.
In the case of one customer — Daimler Trucks North America (DTNA) — Loadsmart cut down the time it took to process a shipment from five hours to 18 minutes, and the lead time its carriers experienced in receiving payments from a month to just two days.
“We are at our core a data company,” Capella said. “With the highest ratio of engineers in the industry, we were the first to introduce truckload instant pricing and booking, and the market’s first server-to-server autonomous truckload booking via our API. This tech-first approach has allowed us to set in place a fully scalable and automated distribution model.”
Loadsmart isn’t the only player in the digital freight broker business, of course. Seattle-based Convoy, which has raised hundreds of millions of dollars from backers such as Jeff Bezos and Bill Gates, boasts a platform — Dynamic Backup — that optimizes routing guides from real-time, guaranteed prices for contractual freight. Transfix, which operates in New York, has an online marketplace that matches loads to drivers. And Uber recently extended its Uber Freight fleet management platform to small and mid-sized businesses.
But Salgado and Capella contend that Loadsmart is building on upward momentum. It already counts “several” Fortune 100 companies among its customers, including the aforementioned Daimler and Anheuser-Busch InBev and Electrolux.
“We see huge potential with Loadsmart,” said Sune Stilling, a partner at Maersk Growth. “Forward integrations between ocean shipping and over-the-road services can create incredible synergies and eventually provide a full service to shippers.”
VentureBeatVentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative technology and transact. Our site delivers essential information on data technologies and strategies to guide you as you lead your organizations. We invite you to become a member of our community, to access:
- up-to-date information on the subjects of interest to you
- our newsletters
- gated thought-leader content and discounted access to our prized events, such as Transform 2021: Learn More
- networking features, and more