KeepTruckin, the freight tech unicorn that leveraged an electronic logging device software business into end-to-end visibility technology and a freight-matching marketplace, told employees today that it was shutting down One Point Logistics (OPL), the freight brokerage it acquired in April 2019.
About 30 employees will be reallocated to fleet sales inside KeepTruckin’s organization, but the majority will be laid off. KeepTruckin briefly considered selling OPL, but decided against it in order to retain as many people as possible, KeepTruckin CEO Shoaib Makani said.
The OPL shutdown came amid a wave of large cuts at other freight brokerage companies, including C.H. Robinson and Coyote Logistics. The Passport Research’s team study of fourth quarter earnings revealed that across the freight brokerage space, earnings were down 22.4% on average year-over-year.
Venture capitalist investors have also become more risk-averse and sensitive to valuation, re-emphasizing unit economics and gross margins. VCs are less willing to value low-margin, non-recurring revenue at tech multiples.
But KeepTruckin never intended to scale a freight brokerage, Makani said. Instead, KeepTruckin needed to understand how freight is transacted to build the technology to power the Smart Load Board. KeepTruckin also needed OPL to feed the first version of its marketplace with freight. But once the tech stack was built out and KeepTruckin was ready to invite third-party brokers and shippers to its load board, it made sense to remove the conflict of interest that came from operating a marketplace and participating in it at the same time.
“In April 2019, we wanted to build an open marketplace where any broker or asset-based carrier could post loads and get access to our capacity, and we believed our data would allow us to build a fundamentally differentiated marketplace by matching intelligently and pushing loads to the right carriers,” Makani said. “We announced that we acquired One Point Logistics so we could learn how to move freight and build matching models to power the marketplace.”
Still, KeepTruckin invested in OPL, more than tripling the brokerage’s headcount and hiring high-powered executives and salespeople from Coyote, GlobalTranz, and FourKites. OPL was adding new account executives as recently as last month. Makani said that, ultimately, freight brokerage proved to be operationally intense and distracted from KeepTruckin’s core mission of building its technology and marketplace.
Makani acknowledged that KeepTruckin’s extensive carrier network needed more freight than OPL could provide, and that the key to getting other 3PLs into the marketplace was by making it truly neutral.
“Now that the marketplace is ready, our intention is to invite the market in, including all 3PLs, large brokers, and asset-based carriers with 3PL arms, and as part of that it didn’t make sense to continue operating OPL,” Makani said. “It’s not ideal to have to shut it down, but if we want to actually realize our mission, we have to remove the conflict and we have to allow all parties to participate on a level playing field.”
In the coming weeks, KeepTruckin will open its marketplace to a wider swath of the 3PL segment, validating and vetting new brokers who will pour loads into the marketplace. Makani said KeepTruckin is already engaging a number of 3PL partners who will participate in the public version of the smart load board.
“We’ve always known that if we could bring trucks online, we could change the way freight moved,” Makani said. “We came across the universal application—electronic logs. We believed that by giving away a free app to drivers, we would build connectivity that would allow us to build the marketplace. Fast forward six and a half years and we have 60,000 carriers, and 300,000 trucks using our ELDs, dash cams, and fleet management. We’ve built this incredible network and now we have the opportunity to build the freight marketplace of the future.”
And I'm done
Investors steer clear of this incestuous mess of a company. COO is CEO’s brother in law, highly incompetent – I mean it’s his first job ever. High paying bro network at the exec level. The people they kept? Coke heads and sleezeballs.
Former employee
This is verified and true, the head of sales and top sales guys would do cocaine on recruiting trips.
Matthew Boyd
I see another company going out of a business they shouldn’t have never been in .the trucking industry is being bleed dry by these brokerage people looking for an easy dollar. Sad to see people losing jobs .but if you put money up you will make it find another job and stop feeling sorry for yourself . this company will get what is coming to them one day
Anonynous
“never intended to scale a freight brokerage” was never stated in the job postings nor in the huddles that were led by Makani promoting “vision and goals” for one point. Speaking as a now former employee this stinks. 150 people were straight up lied to, held to metrics, used and disposed of. Families moved to Nashville on a lie to work for one point. Promised high salaries and gIven at will employment.. more like temporary laborer status. If there was a clear vision for the intentions of the 150 people you lied to and hired to test out your products then surely 150 people would not have left other careers to be temporary workers.
Keep trucking- dumbest name in history of transportation
You have no idea what you are doing. You lost so much knowledge and skill today. Just wait until you have a multimillion dollar loss or a nuclear verdict against your company because you fired people today who could help protect you. Wait until you have a stolen load due to a fictitious pick up.I am sure you know NOTHING about any of this.
Hey Shoaib, I know you will read this after your minions put it on your desk. .This venture will fail. There’s a big group of people who will see to that and also promote your support is out of Pakistan. Your numbers are all small independent contractors- they churn and change as the wind blows- don’t count on their steady revenue. Of the people I talk to your product is garbage- you pander to the 1 unit owner operator. No reputable fleet would use your product. When that word gets out you will see a steady state of decline. You used people and then disposed of them when it was convenient to you. Here’s the bottom of my shoe. Feel good?
Dave
Not sure why it won’t work. Am i missing something? Every shipper and broker always wants to know where the best and available trucks are. A load board that gets that info direct from live ELD’s is THE best info on trucks you can get, no?
There is no liability issue here if they are purely a load board / load matching service like DAT or Truckstop, except their truck data will be much better.
The key for keeptruckin will be getting integrated to all the TMS systems like Mcleod, AscendTMS, TMW, and the rest. This is how we all post and search today. I bet DAT and Truckstop will do everything they can to stop the TMS softwares from integrating the keeptruckin board though. it will kill them both and from another post above it sounds like DAT hates keeptruckin lol.
Interesting times. But as I said before it sucks for the employees who are real people. hopefully they can find a place for them somewhere else.
Dillon
I was one of the people hired in October 2018 right after OPL was bought by KT. Keep Truckin’ bought OPL in October 2018 not April 2019 and the load board was not even a thought. The main idea was to scale a brokerage while using the drivers ELD data to find out where most of the fleets truck were and then sales teams target those areas. The load board was thought of when our DAT account was shut off due to DAT finding out that OPL was a part of KT. When leadership decided to scale a “load board” I raised concerns to all leadership about a conflict of interest and I was told that it won’t be an issue. I left OPL 6 months ago due to not wanting to be apart of this, as I knew this was coming.
Dave
Dillon – it sounds like KT must be going after DAT and Truckstop boards then – and they will have the real time trucks to solve the age old problem of efficient matching (if you know EXACTLY where a truck is or where a truck is going you are in prime position to be the matching winner). I bet this will be one of the biggest boards out there eventually as the shippers and brokers will flock to any place that gives them the best chance of getting the cheapest truck.
Still sucks for the laid off people though.
TK
Hi D, set the record straight! I thought about you, Johnny, and that exact meeting when it happened! Quite terrible and all a LIE, never been part of anything like this before in my career!
Sam sran
How you used the key employees is despicable and less than ethical or professional. Shame on you!!
Big Rig Butters
Corporate Bull Dog. My prayers go out to all the employees you chewed up and spit out.
Dave
This could be the biggest load board in the industry in a few years it they connect to all the TMS systems like DAT and Truckstop already do.