Phoenix-based freight brokerage FreightVana announced plans Thursday morning to purchase more than 1,000 53-foot dry van trailers in 2022 and expand its power-only brokerage offering, FreightVana x, nationwide.
FreightVana’s founding team is stacked with veterans from Knight-Swift Logistics who cited their deep asset-backed “pedigree” as the reason why FreightVana would be able to efficiently acquire, stage, utilize and maintain so many trailers. Co-CEOs Shannon Breen and John Gamero, Chief Technology Officer Don Everhart, and VP of Business Development Lars Ward all came from Knight-Swift.
The team has deep experience in blending asset trailers into a truckload brokerage network.
“Shippers are typically forced to work with large asset-based carriers to establish drop trailer programs, while most small to medium-sized truckload providers are unable to operationalize these offerings because of equipment availability and financing constraints,” Breen said. “We started FreightVana x, in collaboration with our supply chain partners, to help alleviate this specific issue so that shippers can now enjoy a scalable and strategic drop trailer program, backed by smaller trucking fleets, who represent most of the available capacity in the market.”
FreightVana is already moving freight with brokered power and its own trailers in Southern California, Arizona and Nevada. Over the next 90 days, the company expects to bring approximately 250 trailers online. Breen said that FreightVana was responding to shippers who wanted to reduce their proportion of live loads so they could make their operations — which are in many cases constrained by tight labor conditions — more flexible.
Live loads require matching the drivers’ time with the warehouse employees’ time and using both efficiently. But it’s been difficult for many shippers to staff their warehouses and distribution centers with enough flex labor to quickly load trucks after they arrive. So wait times have gone up across the country, frustrating carriers and driving up accessorial charges.
That’s where power-only comes in: By setting up a power-only brokerage with its own trailers, FreightVana seeks to solve pain points on both sides of the marketplace. FreightVana will stage trailers at a shipper location and let the customer load them when it’s convenient to do so, and then the carrier’s tractor can come for a quick pickup of a pre-loaded trailer.
“Small to medium-sized carriers covet these opportunities,” Breen said. “They get access to consistent, dense drop-and-hook freight without having to commit any trailers themselves.”
FreightVana will initially target two to three turns per week on its trailers, Breen said, depending on the length of haul. He said that FreightVana will work to build a highly efficient trailer network by “pairing up multiple customers to close up the networks,” or using overlapping customer lanes to reposition trailers, eliminate empty miles and generate revenue at the same time.
Part of FreightVana’s thesis is that after a tumultuous couple of years in the freight market, during which shippers have seen service deteriorate, rates spike and capacity suddenly evaporate, customers will appreciate that FreightVana is putting “skin in the game.” From FreightVana’s perspective, customers’ freight won’t just be moving on brokered equipment, but on their own FreightVana-branded trailers.
Having skin in the game isn’t just a talking point for the sales team, though — it actually has important technological and operational implications. Because FreightVana was able to purchase trailers in bulk, it can customize them and fit them out with a uniform telematics package across the pool, prioritizing up-time and interoperability. All of FreightVana’s trailers will have GPS-based visibility and tracking enabled, as well as cargo sensors that can give loaded and empty status updates.
FreightVana’s asset-backed strategy is emerging at a time when not only has capacity in modes of transportation like truckload, ocean container and intermodal tightened, but when it’s also become more difficult for transportation providers to add equipment. Some of the same factors that are slowing down the supply chain, including the combination of high demand and labor shortages, have prevented more tractors and trailers from being delivered to carriers. Many medium-size carriers that sought to add capacity last year were faced with historically high prices for new assets, both tractors and trailers.
“Fleets with fewer than 100 trucks struggled to buy new equipment,” Breen said. “They’re trying to keep what they do have on the road and rolling.”
Breen stressed that FreightVana is looking for a fresh way to build collaborative relationships, hence the “x” in FreightVana x, which stands for “collaboration” in the same way as Yeezy x Adidas or The North Face x Supreme. Historically, asset-based trucking carriers offering drop trailer programs have charged a substantial premium for the service, but Lars Ward said that FreightVana’s model will involve a more generous share for the carriers, without overcharging the shipper.
“Shippers want the advantages of working with a megacarrier without the premium cost,” Ward added.
FreightVana x comes in a period when transportation and logistics providers are perhaps more willing to experiment with new models involving combining purchased transportation and owned assets. Convoy and Uber Freight both operate drop trailer networks; J.B. Hunt’s 360box service and Schneider’s ‘orange boxes’ are neutral with respect to mode and power. Breen said that FreightVana’s financial structure, which is not backed by venture capital, allows it to put more assets on the balance sheet compared to the typical digital freight brokerage model.
