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Supply chain logistics platform Flexport is acquire the assets of shuttered digital freight connection Convoy , harmonize to a memoranda Flexport CEO Ryan Petersen sent to staff Wednesday .
Flexport will restore Convoy ’s trucking logistics service for customers in the come weeks , according to the memo , shared by Freight Waves . Petersen said Flexport wo n’t develop the business or any of its financial obligation , but does contrive to keep back “ a modest group of team members from their core mathematical product and applied science squad . ”
Convoy co - founder and CEO Dan Lewis might be one of the squad members link Flexport , reports theWall Street Journal , adduce a somebody intimate with the agreement . Lewis did not respond to TechCrunch to confirm .
The full term of the hatful were not reveal , but Petersen said in his memoranda that “ the purchase price relative to value is modest . ” In April last year , Convoy wasvalued at $ 3.8 billionafter a $ 260 million Series E round .
Flexport could not be reach for input .
Petersen also noted that Flexport ’s expenses “ will be limit to what ’s necessary to maintain the tech . ” When Petersen take back the CEO title in October after hissuccessor was pushed out , the administrator ’s big message was about let Flexport ’s pecuniary resource back in ordering . He had criticized former chief operating officer Dave Clark for overspending on hiring and expansion . Since step back into the CEO theatrical role , Petersen has overseen a plan of cost cutting , includinglaying off about 20 % of its workers , or around 600 people .
With that monetary value slip also amount a need for Flexport to claw its way back to profitability , and offer a better service is one way of life to do that .
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“ We made today ’s acquisition not just because of the incredible tech stack that Convoy build , ” write Petersen . “ We have get word from our customers that they want Flexport to be a one - stop shop class for all their logistics needs . ”
Convoy ’s customer al-Qa’ida could be a blessing to Flexport ’s service as well . The once - promising startup boasted more than 400,000 motortruck drivers and 80,000 carriers in its electronic web , and its tech quite a little includes “ sophisticated procurement engineering that fully automates the supply side for 98 % of loads book , ” say Petersen . He remark the tech could help Flexport miserable carrier costs .
Petersen also laid out how Flexport will come near the business differently than Convoy and other orotund motortruck brokerages that have focalise on scaling quickly by pursue bighearted Fortune 500 chronicle . That character of scale leaf led to complexity and burn , tell Petersen , which made it unmanageable for Convoy to change by reversal a profit . Convoy ’s operating view also was score by the current freight recession .
In the time to come , Flexport will offer a full range of trucking services to customers , “ including FTL , LTL , drayage ( ocean ) trucking , cartage ( aerodrome ) trucking , and eventually intermodal ( railing ) trucking services to customers of our outside freight forwarding services , ” said Petersen .
Why Convoy ’s Dan Lewis expects digital consignment to go mainstream within the year
