Successfully building a FreightTech company takes engineering brilliance, the right people and the right product. NEXT Trucking is going through that journey and learning first-hand what it takes to build an innovative, driver-centric company disrupting industry.
“It is a unique, one-of-a-kind product we are building,” Lidia Yan, chief executive officer of NEXT, said. Speaking on the opening day of FreightWaves LIVE Chicago on Nov. 12, Yan told the audience NEXT has tripled its engineering team but remains committed to delivering on its core mission – to help truck drivers make $1,000 a day and “get home for dinner.”
“We view the solution as being [driver-centric],” she said.
Founded in 2015, NEXT has developed its product solutions while dealing with one of the most difficult markets in North America – the ports of Los Angeles and Long Beach. Yan said the idea to create the company came from personal experience. Her family owns a logistics company and she saw employees constantly working the phones to cover loads, calling drivers in a quest to get the lowest price possible. Secondly, she saw a truck driver arrive at a warehouse one day with only a number for the load.
“It took our warehouse three hours to learn the load was not there, simply because there was a single number wrong,” she said.
Yan knew there had to be a better way. NEXT Trucking is out to find that way with a focus on solving issues facing drayage drivers.
“Forty percent of [product] on shelves is imported,” Yan said. “Drayage is very important because it represents the first mile. If [drayage fails], 40% of our shelves are empty. It’s extremely important, but also extremely difficult.”
Yan pointed to the customs process, chassis providers, warehouses, navigating the ports, and finding and paying drivers as just a few of the challenges that make drayage so difficult. “There are over $315 million in wasted costs, so there is a big opportunity,” Yan said.
NEXT has doubled its headcount to over 200, and Yan said that represents challenges for any company.
“People say when you get over 100 people, the company culture changes,” she said. “The challenge right now is to establish consistency across the board.
To meet this challenge, NEXT is looking for people who are innovative and not set in old-school ways. NEXT encourages its research and development team to spend time on the road learning first-hand what challenges drivers face.
“You have to be in it to learn it,” Yan said.
The company’s growth has resulted in it securing contracts with six of the top 10 shippers in the world and allowed it to introduce products designed to meet that $1,000 a day goal. In January 2019, NEXT announced a $97 million Series C round of funding led by Brookfield Ventures and Sequoia Capital. Sequoia led the company’s $21 million Series B round, announced in January 2018, and total funding to date is now more than $125 million.
The funding is being used to accelerate product development, including its Relay offering. Relay, NEXT has said, could increase driver revenue by at least 20%.
“We combined the traditional drayage routes with over-the-road routes,” Yan explained. Drayage drivers pick up containers from ports and haul them to drop yards, where they pick up an empty container and bring it back to the port. At the yard, an over-the-road driver picks up the loaded container and hauls it to a warehouse, where an empty is picked up and brought back to the yard.
This set allows drivers to haul more revenue loads and ensures empty containers are located where they are needed.
As part of this, NEXT is also acquiring facilities to expand this operation. It recently opened an 18-acre facility about 10 miles from the ports of Los Angeles and Long Beach. Relay also utilizes another eight-acre facility near the ports.
Yan said the future remains bright for NEXT.
“We are looking to bring the same solutions to multiple ports,” she said.