Uber-like trucking startup Convoy inks its biggest deal with Unilever

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Bloomberg  /  November 1, 2016

Convoy Inc., a Seattle-based startup that aims to become an Uber for trucking, has struck its biggest deal yet -- with consumer goods giant Unilever NV.

The four-year agreement will have Convoy connect Unilever to trucks for tens of thousands of shipments a year and is worth millions of dollars over the next year, Convoy Chief Executive Officer Dan Lewis said in an interview. Unilever, the company behind Dove soap, Hellmann’s mayonnaise and Lipton tea, chose Convoy over several other trucking technology providers, the company said.

The deal is a vote of confidence in Convoy, which uses software to match companies needing tractor-trailers with smaller providers, line up deliveries and track them to better ensure on-time pickup and receipt. It’s particularly important as car ride-hailing app Uber Technologies Inc. gets into the freight market through its acquisition of Otto.

Uber and Anheuser-Busch InBev NV (also a Convoy customer) recently sent an 18-wheeler full of beer more than 120 miles down Colorado’s I-25 highway without a driver, a stunt intended to prove the company could use autonomous trucks for commercial deliveries. The company is working on trucking marketplace software to connect drivers of regular trucks with cargo loads and signing up shippers to try it when the app goes live, Uber said. Over time, Uber plans to merge the self-driving technology, obtained in its acquisition of Otto, and the marketplace app.

“It doesn’t make me nervous -- the market is gigantic,” said Lewis about Uber. “All we see today is their self-driving truck. I haven’t seen anything in the field that implies there’s an actual freight service.”

When Convoy, backed by Amazon.com Inc. CEO Jeff Bezos, Salesforce.com Inc.’s Marc Benioff and Uber co-founder Garrett Camp, started in April 2015, it was mainly focused on ad hoc deliveries for companies needing a truck here and there. It has since added deliveries scheduled ahead of time and on a regular basis, said Lewis. 

In fact, he’s starting to dislike the Uber-for-Trucking moniker because it leads people to think “we only mean an ad hoc truck waiting on the side of the road.” Besides Unilever, other customers include Anheuser-Busch, Peterbilt Motors Co. and lawn-care company Scotts Miracle-Gro Co.

"We want to shift the mindset from Convoy is a little more niche to Convoy is going to build the highest service level trucking company in the world,” Lewis said.

Becoming a regular trucking vendor for a consumer goods giant may help. Unilever has been trying Convoy since February and has graded the company against its existing trucking providers and other startups that use technology to try to improve the process. 

"Our partnership with Convoy allows us to jointly shape the future of on-demand trucking while adding flexibility into our supply chain," Reginaldo Ecclissato, a Unilever supply chain executive, wrote in an e-mailed statement.

Convoy’s deal is not exclusive and Unilever will still be working with standard trucking companies, Convoy’s Lewis said. While it’s not as exciting as an 18-wheeler full of beer, organizing thousands of trucks full of soap, mayo and tea should be lucrative work for the startup.