Drayage digital platform Dray Alliance announced last week it has closed on a $40 million series B round led by Headline with participation from Craft Ventures, Matrix Partners, Quiet Capital and Harpoon Ventures to continue building a solution to make the shipment of containers from ports to nearby warehouses more systematic.
The drayage technology company was co-founded by Steve Wen, who grew up around port drivers in California while helping his immigrant parents with their importing company for selling plastic goods.
“I think I learned a lot of my English from truckers while helping my parents translate, book trucks, schedule deliveries and answer emails,” Wen told FreightWaves. “Drivers would deliver freight and while waiting to be unloaded, I would ask about their life and the frustrations of their job.”
After going to college for software engineering and spending time working with an e-commerce company, Wen said he was able to gain a true global perspective of how drayage issues affect global supply chains. He said many of his competitors focus more on the operational issues of drayage, but Wen believes the true problem lies with something more minuscule: data.
“We are a data company that happens to be applying our data points to solving problems in supply chain,” said Wen. “We are looking at everything from a data perspective and we are collecting as much data as possible and that allows us to do a lot more for drayage in this time of need.”
Using that data, Los Angeles-headquartered Dray Alliance has built two software platforms. The first allows shippers to have full visibility and control of the logistics of their containers as they move across the globe. The second, a driver application, allows drivers to directly choose the containers they want to haul, with appointments at the port and at the warehouse already set, leveraging the company’s data to eliminate wasted time.
“Drivers don’t have to spend time planning out these shipments or their day,” said Wen. “I think in order to really fix the problem at the ports, this type of information needs to flow by the seconds, not hours and days with another broker in between.”
Using these tools, not only have shippers seen more efficient port pickups, 70% of transactions have been dual transactions or empty containers swapped out for full containers at the same terminal, bringing even more efficiencies to the ports themselves. The industry average of achieving dual transactions sits around 20%, according to Dray Alliance.
With its new capital, Dray Alliance plans to scale its technology efforts and test for geographical expansion as the company looks to grow outside of the Los Angeles ports. Wen said this would include increasing the number of technical hires to focus on automating more decisions for its shippers with its data intelligence.
| Funding details | Dray Alliance |
|---|---|
| Funding amount | $40 million ($20 million in equity, $20 million in working capital) |
| Funding round | Series B |
| Lead investor | Headline |
| Secondary investors | Craft Ventures, Harpoon Ventures, Matrix Partners and Quiet Capital (working capital from JPMorgan) |
| Business goals for the round | Expand into other ports, increase number of technical employees, maintain carrier payment quick pay standards |
| Total funding | $55 million |
This round includes $20 million in working capital financing from JPMorgan. Dray Alliance plans to use the working capital to support its carriers through a same- or next-day payment program, said Wen.
Wen said he was proud of his team’s ability to build an organization and platform that can make a strong impact on global shipping.
“We don’t own any trucks and yet our shippers find us much more reliable,” said Wen. “So how do we define what we are? We are a multisided marketplace that contracts chassis companies directly, that works with container yards to house those containers in times of need and an outlet for trucks to be more efficient. Many carriers are working their entire available hours of service just on our platform. We started building a data platform to do all of this but ended up building a large trade company.”
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