MyCarrier, a software company with a less-than-truckload transportation management system for small and midsize shippers, announced Tuesday morning that it had raised an $8 million Series A venture capital round led by Greycroft and Lerer Hippeau.
MyCarrier was founded in 2017 by Michael Bookout and Chris Scheid, both transportation industry veterans who worked together at GlobalTranz. The company launched its minimum viable product in 2018 and was bootstrapped until Andrew Leto, the founder of GlobalTranz (2003) and Emerge (2016) made an angel investment in early 2020.
Will Szczerbiak, partner at Greycroft, knows the team and their history well. Previously when Szczerbiak was at Volition Capital, he led GlobalTranz’s Series A. He also sits on the board at Emerge, which Greycroft invested in.
“I met Mike and Chris back in 2019, well over a year ago, after an introduction from Andrew Leto,” Szczerbiak said. “I took the meeting and everything they put in front of me — numbers, product — they did it and executed against it. I kept in touch through periodic check-ins, and that’s what drove me to say, ‘Let’s lean in and do this.’ This is the first TMS we’ve seen that has cracked the code of distributing to SMB, which includes small manufacturers but also Shopify-style e-commerce businesses.”
The platform allows small shippers — who, as a segment, mostly move less-than-truckload freight — to easily compare major carriers’ rates and transit times on a given lane and electronically tender loads. Calendar views make load planning easier and extensive API integrations automate shipment tracking.
While the technology and user experience may be similar to other transportation management systems, MyCarrier’s distribution model sets it apart from other entrants in the space. Although MyCarrier is a solution for shippers, the company’s main customers are major LTL carriers that white-label the platform and then offer it to their SMB shipper customers for free.
That distribution model has created something rare in freight tech: a true network effect by which each new user adds value to the existing users in the network. MyCarrier has scaled rapidly and now more than 4,000 less-than-truckload shipments per day are executed on its platform.
In an interview with FreightWaves, Bookout, who serves as MyCarrier’s chief executive officer, said that previous approaches to the problem of disorganized logistics processes at SMB shippers were flawed because the technology solutions were offered by individual carriers and didn’t create a fair marketplace.
“We’re strictly a tech company that helps carriers go to market with technology to offer their clients and operate in a different way than carriers have been able to do prior,” Bookout said. “Carriers have had a hard time pushing out a TMS. One carrier can’t control a TMS because other providers don’t want the one carrier to have the data. There were a couple entries into the market before that didn’t have the right kind of approach. If you really want to grow this marketplace and have it truly belong to the carriers, it has to be fair.”
MyCarrier relies on the historical fact that large less-than-truckload carriers tend to have legions of outside salespeople who understand their territories and physically visit the shippers in their region. Those salespeople can give their customers a way to automate their freight management and also improve the quality of the data connection between customer and carrier, allowing the carrier to achieve the operational efficiencies necessary for serving small customers well and profitably.
“An LTL carrier dealing with SMB shippers doesn’t know how they are going to receive that freight — there’s a lot of disorganization in the SMB market, and we can help streamline and digitize that business,” Bookout explained.
But what would incentivize carriers to put forth the effort to distribute a white-labeled software platform that isn’t directly tied to revenue generation? There are at least two basic incentives. The first is that MyCarrier automates many of the functions traditionally performed by a third-party logistics provider or freight broker, and thus maintains a direct relationship between the customer and the carrier. It’s truly a platform where carriers can build customer-facing solutions without an intermediary.
“Old Dominion and SAIA are working on billing solutions and Averitt is working on dynamic pricing,” Bookout said. “Our network effects emerge from more technology innovation in the carrier community.”
The second incentive that carriers have is that while MyCarrier helps shippers and carriers more efficiently execute LTL freight, it also generates clean data that benefits both sides. Shippers can easily compare available service levels and rates between carriers, manage their logistics, and track their freight. Carriers, on the other hand, also benefit from the insights generated by MyCarrier’s data.
“Carriers can understand how much of the customer’s business they actually have, even down to the specific market or segment that the rep is in, and can understand how they sit inside that customer or market,” Bookout said. “How does SAIA stack up against ODFL from Phoenix to Dallas? Are customers price-conscious or transit time-conscious?”
Another benefit that has materialized from MyCarrier’s platform is the way that carrier rates are consistently compared and displayed alongside each other so that even if a carrier is too expensive or slow for a customer on the first five lanes she searches, if the carrier is the “right” carrier on the sixth lane, the customer can see the carrier and book it. In a world where LTL carriers often manually calculate and verbally communicate rates, a customer might tire of a carrier that is over-market for the first three loads she’s trying to book and may not call them again, even for lanes where the carrier is more competitive. By keeping all platform carriers in front of the customer on all applicable lanes, MyCarrier helps carriers compete where it makes sense for them and helps shippers understand exactly which carrier is suited for any given situation.
FreightWaves spoke to Todd Polen, vice president of pricing services at Old Dominion Freight Lines, about ODFL’s use of MyCarrier.
“What’s really happened in the marketplace over the past few years is that customer behavior has changed,” Polen said. “More and more customers are looking to do transactions through digital engagement from their computer screen. This tool MyCarrier has developed allows that to happen and makes it pretty easy for the carrier and customer, whether it’s a pickup notice, shipment status and potentially invoicing in the future, all communicated through API. It helps our goals at Old Dominion as they relate to automation.”
Polen said that Old Dominion appreciated the way MyCarrier ranked LTL carriers on a given lane.
“By default, MyCarrier ranks carriers by service level, and the customer can switch to ranking by price,” Polen said. “But we don’t market to the cheap customer who wants to do everything with the cheapest possible price. The tool doesn’t necessarily guarantee us more business, but it’s something the customer should have and we believe that adding value will help us in the long run. Do the right thing by the customer first and hopefully the freight will follow.”
MyCarrier plans to use its Series A capital to continue scaling and developing the platform and eventually build premium services that will enable it to monetize its shipper users, including automated insurance and freight payment auditing products that SMBs are willing to pay for.