The French freight industry is one of the largest markets in the world, with it worth around $52 billion in revenue every year. But like its North American counterpart, the industry suffers from considerable fragmentation, with 90% of the fleet companies owning fewer than 10 trucks.
Convargo, a startup based out of Paris, is connecting shippers and carriers in real-time by creating a digital freight marketplace for the French industry. “If you are a shipper, you can get a quotation in real time and find carriers for your merchandise within a few clicks. Similarly, if you are a carrier, you can receive more freight at a better price,” says Oriane Dusserre, CMO of Convargo.
Convargo was founded to solve a problem that has plaguing the industry for too long; doing away with the frustrating phone and email exchanges that wasted precious man hours.
Convargo’s founder, Maxime Legardez, had a lot of experience in running marketplaces like FoodPanda and Vaniday, across different continents, before he embarked on his journey within the freight industry. “Maxime saw that this industry is the backbone of the economy and has a huge potential for optimization,” says Dusserre. “Ninety percent of all the products we consume have at some point gone through road freight. So it is a key market that could be improved.”
Dusserre believes that there are different friction points in the industry that need attention. “Apart from the time wasted on conventional exchanges, lack of price transparency is something that needs looking into,” notes Dusserre. “Also, there is the problem with empty trucks. Between one-fourth to one-third of all trucks plying on the road are empty. So that is a big issue, both economically and for the environment.”
Acquiring customers has been about getting to meet prospective clients in person, understanding their needs and explaining what Convargo can do for them. “We want to adapt to their ways of working,” adds Dusserre. “We wish to develop tools that would integrate with their workflow, to make sure they don’t need a whole new system in place. And this strategy is working quite well for us.”
The startup is firm on not straying away from human interactions and does not plan to replace humans working in the industry. Convargo has deployed a team which is always available to speak with clients on the phone and to meet with them. “We understand that in this industry, human interaction is very important and we will never try to eliminate them,” clarifies Dusserre.
Convargo is not wary of competition; on the contrary, the startup finds it positive to have some rivalry because it throws the limelight on a problem that is collectively being solved. “We also think that there are a few factors that differentiate us from the rest. We have a very global approach, both geographical and product-wise,” says Dusserre. “We are already opening up to other European countries, and by 2018, we plan on opening a European office out of France.”
The startup recently concluded its Series A funding round raising $19 million from Inventure Partners and Earlybird Venture Capital. Convargo also counts Tony Fadell, the inventor of iPod, and Roger Crook, the former CEO of DHL Freight Forwarding, as investors.
The company started with a marketplace that worked well for spot transport. Over time, with the experience of working alongside bigger companies involving larger volumes of shipping, Convargo adapted to change. “We are now developing EDI and API integration for our clients. We study their transportation plans ahead of initiating a partnership to guarantee that we have the capacity of fulfilling their orders, so that they don’t have to plug in their info one by one,” explains Dusserre.
Convargo has partnered with 2,000 trucking companies to date and is working with sizeable European trucking companies that are both regional and international. The recent investment in the company will be used to leverage the growing amount of data it has, to perfect its pricing algorithm, and to provide tracking and planning services to shippers and truckers. The company also plans to reduce payment time to 72 hours and to develop other tools to simplify drivers’ daily life.
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