Smart freight transport startup Loadsmart raises $200M in late-stage funding
The rail transportation company CSX Corp., asset manager Janus Henderson Group and existing investor BlackRock also participated in the Series D round, which takes Loadsmart’s valuation to $1.3 billion.
Chicago-based Loadsmart sells a platform that helps shipping and trucking companies connect with customers. The platform uses artificial intelligence to help transportation firms price, book and ship goods while maximizing capacity.
Supply shortages resulting from the COVID-19 pandemic have put a spotlight on the logistics industry, and that’s good news for companies such as Loadsmart. In an interview with VentureBeat, Loadsmart co-Chief Executive Ricardo Salgado said the logistics industry is full of deep-rooted inefficiencies. Most trucking firms are running their trucks at 20% to 30% empty, he said, and yet all the while the news is full of stories about delays at ports and warehouses.
Salgado said supply chain problems can be solved by unlocking more efficiency and his company aims to do that using technology to bring carriers, shippers and warehouses together so goods can be moved in an automated way.
Loadsmart’s platform is powered by AI algorithms that work hard to ensure all logistics carriers within its network of 680,000 trucks are full, while also minimizing the “empty miles” those trucks have to travel, which it does by matching loads with available transport lanes. Customers that need goods shipped across the U.S. can use Loadsmart’s platform to request quotes that consider loading times, the overall size of a load and other factors.
Salgado said Loadsmart’s pricing AI algorithm takes into account more than 400 parameters to calculate shipping prices for virtually all lanes in the U.S. The algorithm also takes into account variables that shift at high frequencies, such as “customer elasticities, Loadsmart’s internal operational capacity, shifts in conversion and shipper momentum, and future market movements.”
The platform also uses AI to organize shipping documents such as invoices and bills of materials.
Loadsmart’s platform is in big demand. In August, the company announced a major partnership with The Home Depot Inc., helping the retailer to leverage its flatbed capacity through Loadsmart’s Flatbed Messenger platform. It allows Home Depot to find its carrier network backhaul, thereby reducing its direct transportation costs.
Loadsmart said its carrier network has grown to more than 680,000 trucks, and its freight procurement software now processes hundreds of millions of dollars’ worth of goods every week. In addition, some 600,000 dock appointments have been scheduled through Loadsmart’s platform in the last month.
“The logistics industry is ripe for transformation, as it remains heavily reliant on analog systems and processes that create fragmentation and prohibit collaboration,” Salgado said in a statement. “The future of the supply chain and logistics industry relies on digitization and automation, where Loadsmart is leading the way.”
Loadsmart said it will use the funds from today’s round to expand its technology offerings that connect shippers, carriers, brokers and warehouses to further increase efficiency and transparency.
Despite the strong financial backing and impressive growth, Loadsmart does quite a bit of competition in the freight tech market. New York-based Transfix Inc. offers a similar online marketplace that helps truck drivers find loads, while Seattle-based Convoy Inc. optimizes routing guides from real-time prices for freight.
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