One man’s death (Convoy) is another man’s (Flexport) bread. This proverb is true for what’s about to happen here in the digital freight startup industry if media reports are anything to go by.
Freightwaves and The Wall Street Journal have independently verified with sources close to the deal that Flexport is negotiating to buy Convoy’s technology assets.
The freight startup Flexport has been in hot water for the last few months after co-CEO founder Ryan Petersen forced his co-CEO, Dave Clark, out of the company. Since then, Petersen has been active on social media, trying to save the company and returning it to profitability.
Earlier this month, Flexport was still reducing 20% of its staff. Petersen says this is necessary to return the company to profitability without raising prices.
How Convoy ended
Reports suggest that Flexport will hire a small team of Convoy employees – to ensure the implementation of the technology runs smoothly.
The US-based company closed operations last week, failing to find an investor to buy the business. In a memo, co-founder Dan Lewis told employees: “Convoy will be closing down its current core business operations.”
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.
Logistics expert Nick Fanelli says only companies who have experienced this high financial pressure previously weathered the storm. “Carriers are very hungry for volume. They’ve built these large networks that need delivery density, and right now, it’s just not in the market.”
But not everyone agrees that there is a freight recession.
In a recent interview, Circle Logistics’ senior vice president, Andrew Smith, shared his insights with Locate2u. He attributes the decline in the freight market to oversupply.
He doesn’t believe there is a freight recession at the moment.
Details about the deal
The Wall Street Journal is reporting that if Flexport’s deal goes through, it has plans to restore Convoy’s trucking services “for as many customers and partners as possible.”
The specifics of the deal are still unclear. The discussion already started on October 27, 2023.
Convoy has not responded to any media inquiries regarding any potential business deal.
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.
