- Convoy is rolling out direct-to-shipper load bidding, allowing carriers to directly bid on loads, the digital freight broker announced in a press release emailed to Supply Chain Dive. It has piloted the offering for the last few months and is now expanding it to its entire network.
- This will allow carriers to bid on all spot opportunities posted by shippers and could provide access to 10 times the amount of spot freight, Convoy said.
- The update doesn't require any changes for shippers that already work with Convoy. If a carrier wants to bid on a load, Convoy will confirm it with the shipper. If the carrier wins the bid then the trip will be completed in the Convoy app like any other job.
Convoy previously followed a traditional broker model, which required it to bid on loads posted by shippers, according to Ziad Ismail, Convoy's chief product officer. Loads would then be posted in Convoy's app where carriers would bid on them.
The issue with this system, said Ismail, is in the past carriers didn't end up seeing all the loads for any given shipper if they just looked at Convoy. All of a shipper's loads would be spread across multiple brokers.
"So what we changed is now in real-time, these shipments are available through Convoy at the shipper level," Ismail said in an interview with Supply Chain Dive.
If a shipper is posting 1,000 loads, then the carrier will be able to see 1,000 loads and bid on the ones they're interested in. Convoy then transmits the carrier's bids directly to the shipper's system, he said.
In some cases, Convoy itself will still bid on loads. The company has enough historical data on past trips to bid on some loads and set the price knowing it will be a good fit for the carriers in its marketplace. But sometimes there isn't enough information to know if the load will sell, "for example, in new markets, or let's say there's a storm that hit a region in the United States and pricing and availability of trucks might be very uncertain," Ismail said.
Loads Convoy might have passed on will show up as available for the carriers to bid on directly.
This can reduce Convoy's risk, but also help shippers by making more trucks available for their loads, Ismail said.
Convoy ran the pilot with a limited number of shippers in a few select markets.
"We're seeing that we can submit this back to the shipper within minutes," Ismail said. This has lead to a substantial increase in loads booked with carriers, especially when there's volatility in the market.