Flexport CEO Ryan Petersen has confirmed they have acquired Convoy’s technology stack. The supply chain logistics platform plans to retain a small group of team members from Convoy’s core product and engineering team.
In a letter posted on its website, Flexport clarifies the details: “We are not acquiring Convoy the company or any of its liabilities, and our expenses will be limited to what’s necessary to maintain the tech.”
Convoy closed its business two weeks ago after failing to find an investor while battling to make a profit.
According to Convoy, their demise resulted from a “massive freight recession and contraction in the capital markets.” The company believes the climate ultimately crushed their progress.
However, Flexport will, in fact, be looking to “restore their full-truckload service” in due course. Some of Convoy’s larger customers have already indicated that they are willing to come back.
Flexport says its strategy for the trucking business unit will be different from Convoy’s. Where other large truck brokerages focus on driving “immense scale” Flexport will be doing something different.
The startup says with that scale came “complexity and burn”. Amid a highly competitive market with low barriers to entry, it can be challenging. Even with all of Convoy’s “amazing” tech, they could not reach the scale required to run a profit.
“We have heard from our customers that they want Flexport to be a one-stop shop for all their logistics needs,” says Petersen.
What will Flexport be doing differently?
- Offer a full range of trucking services as a one-stop shop for global logistics.
- Offer expanded trucking services, including FTL, LTL, ocean, and airport trucking.
- Every container gets trucked onward to its final destination.
“Thanks to this deal, we’re now in a great position to complete our product vision as a true one-stop-shop to ship any product, in any quantity, between any two places in the world,” says the CEO.
Eyes wide open
Petersen acknowledges to make this deal successful, he and his team will have to remain “disciplined and focused” to integrate the technology successfully.
“We’re not talking about financial risk, as the purchase price relative to value is modest. Rather, as a company, we are already heads down and focused on returning our business to profitability. We will do everything in our power to minimize distraction and ensure that our leaders can stay focused on the mission at hand.”
About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand. Do you have a story you would like her to expose, report on, or consider? Please send your request to Newsdesk@locate2u.com.