via Mike Shedlock:
There’s some sad news today in the trucking business today that unfortunately has some people cheering.
Digital Startup Convoy Is Winding Down Its Freight Business
Digital freight startup Convoy, a business founded by former Amazon.com executives that has drawn a star-studded lineup of tech investors, has suspended operations and is winding down its core business as it seeks alternatives that may include selling its technology, according to people familiar with the matter.
Convoy, which raised $260 million in a funding round last year that valued the business at $3.8 billion, on Wednesday told employees in an email that it would stop accepting shipments until further notice and that it was rescheduling or canceling existing loads.
Convoy, which matches loads to available trucks, is one of the largest in a slew of technology-driven companies that have started up in the past decade looking to make freight marketplaces more efficient. Its customers have included major companies including retailer Home Depot, consumer-goods companies Procter & Gamble and Unilever, and drinks business Anheuser-Busch.
Early investments came from vehicles backed by Microsoft co-founder Bill Gates, Amazon founder Jeff Bezos and former U.S. Vice President Al Gore. The company said in 2018 that U2 lead singer Bono and guitarist The Edge were also investors.
The company said in announcing its Series E funding round in April 2022 that its technology linked shippers and freight brokers to some 400,000 trucks on the shipping sector’s spot market.
Digital freight startup Convoy, whose star-studded lineup of tech investors includes Bill Gates and Jeff Bezos, has suspended operations and is winding down its core business https://t.co/tF13rsEYu8
— The Wall Street Journal (@WSJ) October 18, 2023
Dan Lewis is the Chief Executive Officer and Co-Founder of Convoy.
Craig Fuller Chimes In
You are so right @FreightAlley. Lots of haters out there. I have terrific respect and appreciation for how hard it is to a scale multi billion dollar company in this industry. I don't know Dan but know @MarkOkerstrom and @brookstmcmahon well. Great people / leaders.
— Will Urban (@WillFUrban) October 18, 2023
Hope I get paid on my $1.5/mile load I booked with them
— usa_transportation (@bob_kruz_) October 18, 2023
Why would one celebrate these situations… so sad. Even if some could be avoided it isn’t something to celebrate. Many front line workers losing their jobs with holidays around the corner and families to support.
— Seth Parker (@Seth_Parker_) October 18, 2023
“Why would one celebrate these situations… so sad. Even if some could be avoided it isn’t something to celebrate. Many front line workers losing their jobs with holidays around the corner and families to support.”
Why the Cheers?
“Early investments came from vehicles backed by Microsoft co-founder Bill Gates, Amazon founder Jeff Bezos and former U.S. Vice President Al Gore.”
Lots of people hate Bill Gates and Al Gore. Bezos is mot particularly well liked either.
But it’s not like Bill Gates, Al Gore, or Jeff Bezos is going to be hurt by this. It will hardly matter to them at all.
Meanwhile, housing is in the gutter, auto companies are on strike, inflation is soaring, mortgage rates are 8.0 percent, and there is excess capacity in the shipping business.
Existing-Home Sales Decline 17 of Last 19 Months
On September 21 I commented Existing-Home Sales Decline 17 of Last 19 Months – Yes, This is a Crash
Yes, This is a Crash
- Existing-home sales are down 35.8 percent in 2.5 years.
- Existing home sales are back to a level seen in the mid 1970s.
- If there is a decline next month, an that is highly likely, existing-home sales will drop to a 12-year low.
It’s a transaction crash not a price crash but consider the impact on trucking.
When people do not buy homes, they do not buy new carpet, new appliances, lawn mowers, paint, wallpaper, or start families.
Family formation impacts clothes for toddlers, toys, and playground equipment.
In addition, the auto strike means autos and parts don’t get shipped.
Cheering the demise of Convoy is cheering for recession and job losses.