New Convoy Just-In-Time service aims to meet fluctuating demand challenges

A new truckload freight service offering recently introduced by Seattle-based digital freight network Convoy aims to provide shippers with guaranteed on-time performance within 15 minutes of the scheduled delivery time.

Entitled Convoy Just-In-Time, the company said that this offering provides manufacturing and retail shippers with a pairing of service quality compliance and flexibility to handle fluctuating demand. And it added that based on internal company data, shippers that use this offering are able to reduce total transportation costs by up to 11% and also maintain higher service quality levels.  

Mitch Violett, Convoy's Product Lead for Just-In-Time provided LM with a detailed overview of the new offering in a Q&A, which follows below.

LM: What drove the need for Convoy JIT? How long had it been planned/in the works?

Violett: At Convoy, every shipment is critical and on-time delivery is one of our primary priorities. When we heard from our existing and prospective customers about their need of having deliveries on-time along with other stringent requirements, we actively developed a service that can give them the assurance of on-time delivery as well as flexible capacity even when their demand surges. 

As we delivered successfully for these customers, over this past year, we increasingly understood that by using our processes and technology we can address the industry’s existing limitations. This service is a reflection of one of our core values of ‘start with the customer’. 

LM: What are the main shipper benefits of this offering? 

Violett: Guarantee of delivery helps shippers avoid production shutdowns and maintain schedules. For a certain set of customers, it helps avoid penalties from late deliveries. Just-In-Time shippers can save up to 11% on their annual freight cost by virtually eliminating expedited services and/or backup carriers.  Other benefits include access to capacity even when demand surges and real-time status updates and granular on-demand insights. 

LM: What does this provide for customers that was needed or missing?

Violett: Asset-based carriers (ABCs) are rigid as they need a month’s notice to optimize their fleet count. As demand rises, ABCs often fail. Primary carriers have to find an alternative when they fail, they turn to specialized expedited carriers which can cost 1.5-2X the cost of shipments, which they pass on to the shipper. As demand falls, ABCs return lanes and shippers have to move all the freight with specialized expedited carriers in turn increasing overall costs. 

During the pandemic, as the capacity tightened, shippers facing disruptions moved from just-in-time to just-in-case inventories, where they ordered more inventories in case demand surged. With the easing of supply-chain pressures and falling inventory levels our customers / shippers have been looking at ways to re-adopt just-in-time inventory methods but want more assurance and improved visibility into each shipment. They are especially seeking carriers that are flexible and can react to demand or volume surges quickly. 

LM: What are the main competitive advantages and benefits of this offering from a Convoy perspective? 

Violett: Convoy offers an innovative and better alternative than ABCs because of its app-connected flexible capacity, on-demand insights that help supply chains become more cost efficient, and depth of visibility into each shipment

Flexible capacity is a key differentiator: Convoy Just-In-Time harnesses our network of 400,000 trucks and thousands of telematics enabled trailers. When demand surges, by leveraging our machine learning models, we can reroute trailers to our customer’s facilities in a matter of days. This added flexibility enables shippers to virtually eliminate expedited services, save costs, and reduces the operational burden on load planners. With all of our carriers automatically vetted before every shipment, our shippers get access to a high-quality carrier base. Our crash rate in our network is 16% lower than the industry average and our claims rate is 20x better.

Guaranteed service: We cover a portion of the shipper’s costs, if we don’t meet the OTP delivery requirements. We are the only carrier who’s willing to put “skin in the game.”

On-demand insights is the biggest value-add: Many ABCs still depend on manual interventions in many of their processes. They don’t have access to the granularity of data and insights that we have. Just-In-Time shippers collect their own data but that again does not go to the level of depth as we do. We have impressed our existing Just-In-Time customers with the actionable insights we have offered to improve their cost efficiency and facility ratings. 

Tech-enabled service: Our data models enable our in-app carrier matching. We match the right carrier to the Just-In-Time load based on proximity, past performance, likelihood of on-time delivery amongst others. The models predict shipment delays and potential disruptions allow our customer experience teams to respond in real-time and identify the optimal recovery path. Convoy leverages our automated carrier outreach (ACO) platform to send reminders and ingress points back into the app to capture the trailer number and BOL numbers at the proper steps in the execution process.  We configure automated status emails, which can be customized per shipper/facility needs to ensure they get the info they want when they want it. Our dedicated service teams monitor each shipment and proactively work to recover from potential disruptions that are under carrier control.

Convoy offers more comprehensive visibility compared to traditional ABCs: Convoy has achieved the highest level of carrier app connectivity (97% Convoy carrier app use vs. 20-30% industry average), which allows us to provide the most complete picture of supply chain performance and shipment status. ABCs promise real-time visibility through a combination of EDIs, APIs, and manual human interaction but are limited in the overall depth and granularity compared to what Convoy offers.