Convoy rolls out new services for its Convoy Go Drop-and-Hook offering

Following three years of investment from its engineers and data scientists, Seattle-based digital freight network Convoy announced today that it has introduced new automated drop-and-hook services for backup and spot freight through its Convoy Go offering, a drop & hook marketplace that enables any United States-based carrier or owner-operator to begin hauling pre-loaded trailers and be able to operate at the same level as large asset-based carriers, which was rolled out in 2019.

Convoy said that these new services provide shippers with what it called unmatched flexibility on a nationwide basis at times when unexpected surges occur.

And it also explained that Convoy Go is now able to flex in different to meet shipper demand, including shippers being able to rely on nationwide drop-and-hook coverage across primary, backup, and spot—all from the same provider—with the company estimating that shippers using these services can save 9% of their annual freight spend on average and also increase efficiency and service quality.

A Convoy executive told LM that there were various drivers for these new automated backup and spot services for its Convoy Go drop-and-hook offering.

“Over the last couple of years, we’ve expanded our drop-and-hook program (Convoy Go) nationwide,” he said. “As with all other drop trailer programs, ours was originally focused on primary contract freight. The feedback we received from shippers was that our unique approach helped them handle the day-to-day fluctuations in demand more effectively than traditional drop programs. By predicting trailer demand weeks in advance and rerouting trailers to facilities with expected demand surges, we significantly reduced the chances of their contract drop loads failing over to the spot market and live loading.”

And for shippers who run drop with Convoy, he observed that this addressed the long-standing problem of traditional drop being inflexible for contract freight. But for all the shippers still running traditional drop with asset-based carriers, he said there was still the prospect of tender rejections and failover to live loading on the spot market.

“So we worked in partnership with some of our biggest drop shippers to create a new solution specific to running drop-and-hook for backup and spot loads,” he said.

As for the main shipper customer benefits of these new services, the Convoy executive said that when asset-based carriers reject a drop tender, the shipper is typically forced to convert the shipment to a live load and source coverage on the spot market. This creates several problems, including the logistical hassle of coordinating appointments, the potential for shifting labor requirements at the facility in order to handle live loading, the increased cost of sourcing spot freight, and the potential for lower service quality from spot carriers who aren’t familiar with the facility.

“Flexible drop addresses all these problems,” he said. “By providing automated backup and spot services for drop freight, shippers can continue working with asset-based carriers for their primary drop loads and supplement their variable demand with Convoy to keep the loads as drop, even when their primary carrier rejects a tender. And if Convoy is the primary freight provider on any lane, shippers get peace of mind that we can flex our tractor and trailer capacity to cover their loads even when demand fluctuates.”

Regarding the estimated 9% decrease in annual freight spend on average these services can provide, Convoy said it is based on four types of savings.   

• Avoiding the live-live spot market for surge volume;
• Improvements in productivity at the warehouse or distribution center - specifically the number of loads that can be handled per square foot and per employee;
• Improved carrier performance - specifically, the reduction in falloffs; and
• Avoiding direct or indirect costs associated with trailer underutilization 

“This is the first drop-and-hook program of its kind,” the Convoy executive said. “Traditional carriers and 3PLs rely on massive, redundant trailer pools, owned power units, and manual management of these assets to cover consistent drop volume on dense lanes. This inherently limits the scope and scale of drop-and-hook, and creates overhead costs that are ultimately passed along to shippers. By contrast, we’re using machine learning models and automation to manage a trailer fleet much more efficiently. This provides all the efficiency upside of traditional drop, while providing a level of flexibility that’s never before been possible.” 

This announcement has been several years in the making, and is only possible through a few key investments, cited by Convoy including: 

• its nationwide network of carriers that represent a combined fleet size of more than 300,000 trucks, which provides Convoy with instant, on-demand access to power unit capacity anywhere in the country.
• a shared pool of telematics-enhanced trailers, which provides Convoy with 24/7 visibility into the precise location and status (loaded vs. unloaded, moving vs. idle, etc.) of every trailer in the fleet; and
• machine learning models that predictively route trailers and dynamically price freight. These models can’t just be deployed and expected to immediately operate at full efficiency—instead, they need to be trained with years of real-world shipment data as Convoy has done with the millions of truckloads moved through its network