There’s some sad news today in the trucking business today that unfortunately has some people cheering. 
Digital Startup Convoy Is Winding Down Its Freight Business
Digital freight startup Convoy, a business founded by former Amazon.com executives that has drawn a star-studded lineup of tech investors, has suspended operations and is winding down its core business as it seeks alternatives that may include selling its technology, according to people familiar with the matter.
Convoy, which raised $260 million in a funding round last year that valued the business at $3.8 billion, on Wednesday told employees in an email that it would stop accepting shipments until further notice and that it was rescheduling or canceling existing loads.
Convoy, which matches loads to available trucks, is one of the largest in a slew of technology-driven companies that have started up in the past decade looking to make freight marketplaces more efficient. Its customers have included major companies including retailer Home Depot, consumer-goods companies Procter & Gamble and Unilever, and drinks business Anheuser-Busch.
Early investments came from vehicles backed by Microsoft co-founder Bill Gates, Amazon founder Jeff Bezos and former U.S. Vice President Al Gore. The company said in 2018 that U2 lead singer Bono and guitarist The Edge were also investors.
The company said in announcing its Series E funding round in April 2022 that its technology linked shippers and freight brokers to some 400,000 trucks on the shipping sector’s spot market.
Dan Lewis is the Chief Executive Officer and Co-Founder of Convoy.
Craig Fuller Chimes In
“Why would one celebrate these situations… so sad. Even if some could be avoided it isn’t something to celebrate. Many front line workers losing their jobs with holidays around the corner and families to support.”
Why the Cheers?
“Early investments came from vehicles backed by Microsoft co-founder Bill Gates, Amazon founder Jeff Bezos and former U.S. Vice President Al Gore.”
Lots of people hate Bill Gates and Al Gore. Bezos is mot particularly well liked either.
But it’s not like Bill Gates, Al Gore, or Jeff Bezos is going to be hurt by this. It will hardly matter to them at all.
Meanwhile, housing is in the gutter, auto companies are on strike, inflation is soaring, mortgage rates are 8.0 percent, and there is excess capacity in the shipping business.
Existing-Home Sales Decline 17 of Last 19 Months
On September 21 I commented Existing-Home Sales Decline 17 of Last 19 Months – Yes, This is a Crash
Yes, This is a Crash
- Existing-home sales are down 35.8 percent in 2.5 years.
- Existing home sales are back to a level seen in the mid 1970s.
- If there is a decline next month, an that is highly likely, existing-home sales will drop to a 12-year low.
It’s a transaction crash not a price crash but consider the impact on trucking.
When people do not buy homes, they do not buy new carpet, new appliances, lawn mowers, paint, wallpaper, or start families.
Family formation impacts clothes for toddlers, toys, and playground equipment.
In addition, the auto strike means autos and parts don’t get shipped.
Cheering the demise of Convoy is cheering for recession and job losses.
1/ Wasn’t everyone crying about lack of truck drivers not so long ago? What happened? Or was it just alarmist?
2/ So I guess people who do not move never buy a new chair, tv, lamp, ….
These guys didn’t actually own any trucks or employ drivers, right? They were just attempting be intermediaries that got a nice taste of the money, at the expense of those who actually did own trucks and employ drivers.
They didn’t even enable anything that wasn’t already available unlike ride sharing which made a new service possible.
The economic ebbs and flows continue, as always. One sector slows while another grows. Net result seems to be slow growth overall, in spite of current GDP measures showing surprising strength.
Gasoline demand down a bit. Gasoline supply plentiful. Gasoline prices down.
Diesel demand flat. Diesel supply barely keeping up with flat demand. Diesel prices up.
Global oil inventories continue to drop, but at a slower pace than a month ago. They are projected to keep dropping through to Q2 24. Though the future is always hard to predict. So many moving parts. US at record production in spite of dropping rig counts all year. We should be able to add another .3 mbpd next year. Venezuela may add .3 mbpd next year. Iran’s current 3.5 mbpd may get cut due to conflicts. OPEC trying to balance the global 102 mbpd market, with a tightening bias, to get prices to $90.
I continue to sell portions of my oil stock portfolio into the current strength. Always good to cash in profits. But will keep holding a good chunk of the stocks as they remain cash flow juggernauts at $80 and up WTI.
The people who drive the trucks are what matter, not another faux uber tech company attempting to take advantage of the drivers.
Correct. I talked to a trucker at a hotel in Illinois and he said when he blew a tire (front?), he intentionally steered his rig into a guardrail so that the load of blueberries would not tip over. He knew it was better to have more damage on his rig than to get a bad reputation with the producer by messing up the product.
1) A glut of F-150 and trucks.
2) A glut of new privately owned houses under construction, total 1.7M, while transactions stalled.
3) A glut of your money in the gov roach motel for 5%. Election dysfunction ==> stealthy raids. Don’t blame congress.
4) Illegal immigrants.
5) Colleges.
6) A glut of elderly beyond the prime age.
7) A glut of junk food, salt, sugar and fructose…
1) A glut of F-150 and trucks. > Union Run Companies build, build, and build, and don’t care about inventory or sales. They are propped up by Our Government (#1 Voters for more Government is Unions), and will always side with the Government and they know it.
2) A glut of new privately owned houses under construction, total 1.7M, while transactions stalled. > Builders build, build, and build, and don’t care about inventory or sales. They are propped up by Our Government (#2 Voters for more Government is Home Builders), and will always side with the Government and they know it.
3) A glut of your money in the gov roach motel for 5%. Election dysfunction ==> stealthy raids. Don’t blame congress. > Governments Spend, spend, and spend Our Taxpayers Money, and waste way more money everyday than the entire population waste in a day.
4) Illegal immigrants. > Good reason why they shouldn’t be here. HINT: “The Word Illegal”
5) Colleges. > Very Highly Over Priced Indoctrination Camps.
6) A glut of elderly beyond the prime age. > Many are called Baby Boomers and many are still working because they have no choice. Inflation has wreaked total havoc on their ability to make ends meet. Sad!
7) A glut of junk food, salt, sugar and fructose… > Much like Alcohol and Drugs, but without the Moniker! Salt, Sugar, Fructose, and many other items are the Demon’s utilized by the Medical Industry for Continuing prescriptions and wealth as a result. Just Take A Pill!!!
I feel the same way about Cigarettes and Alcohol, which are ALL simply avenues for profit. This is a Massive Industry of Prescription Drugs, Doctors, Psychiatrist, Lawyers, Attorney’s ETC. They ALL FEED off of this industry for Power, Money, Notoriety, and when possible even Fame!!!
Mish Talk over powered Wolf.
For me the interesting subject is why Convoy failed. Sure the environment for trucking is very bad now but this not the first time and trucking tanks every time the economy weakens and soars on the upswing. The other freight brokerage companies have gone through several cycles already and I suppose that Convoy, as a new man in the market, either missed the signs or overestimated their ability to adapt. They marketed themselves as the “Uber” of trucking, but after a bit of superficial research, other more established freight brokers use a similar technology.
Perhaps someone here who knows the industry could give us a primer on why Convoy failed. Myself I would find it much better use of my time than to read comments filled with lamentations and breast-beating.
“For me the interesting subject is why Convoy failed.”
Because US trucking still remains a reasonably competitive business. And very likely noone in “Convoy” even knows how to drive a truck. Yet expects to “make” more from trucking than those sufficiently competent to do so.
“Convoy” made money, though. The only way any of these guys have “made money” for the past couple of decades: Selling $260mill worth of cheap paper to idiots flush with Fed loot.
A chuck which was looted directly from those who do know how to drive trucks, rendering that industry a bit less competitive than it otherwise would have been. Hence leaving every American person and company which in any way depends on shipping, yet another competitive step further behind their Chinese counterparts.
Such is the price of keeping incompetent idiots flush in their fantasies that they are somehow useful beings (which they aren’t), just because some clown tells them they can “truck digitally” and sound, like, visionary and, like Musk and, like, stuff!
$260 million last year, far more than that in ‘the before times’.
link to geekwire.com
Dumb Comment.
Yellow Freight went Bankrupt only Two Months ago. They knew Trucking.
JB Hunt just got crushed with a bad Earnings and They Knew Trucking…
Like it or not Luddite…
Technology is being used in EVERY industry or it will be soon. Trucking & Logistics is a HIGHLY cyclical business where even the most experienced can get burned. Mom & Pop Big-Rig Drivers all the way up to the biggest in the world.
Perhaps those high-powered “founders” felt that they had extracted peak cash from the “investors” and decided further work wasn’t worth the effort.
Not how it works.
That money goes away when they get shut down.
They can’t make it work in this economy.
Yellow Freight just went BK…
JB Hunt getting smashed currently.
Trucking is cyclical and everyone in the industry is taking a BIG Bite of a Shite Sandwich.
Cheers!
boom bust economy
next cycle hopefully will not be as extreme or volatile
Boom bust economics
The cycle will repeat but may not be as extreme or volatile
Looks like a rice and beans economy for the next decade. Secular bear market.
Trucking is like the number one employer for middle age men.
LA County median home price tops $900K for the first time.
link to ktla.com
Awesome. A million bucks to live in a hellhole with the devil himself in charge. One of my favorite suppliers just packed up and left. $22,000 a month electric bill in CA to $4500 a month in Idaho.
Unfortunately You then have to live in Idaho. “All the Potatoes you can Eat” don’t make it good enough. Cold as crap in the Winter and convenient to nothing.
That’s good advertising for Idaho, Davey. Please continue to stay the hell out of the state.
Hat tip to Mish for acknowledging the stupidity of “hating” an organization for having Gore or Gates as an investors, people so engorged in hate they’ll chew off their own nose to spite.
Folks, I hear Al Gore bought oil futures, so, welp, gonna hafta walk for awhile.
.
Agree. Way too many haters here. Which wouldn’t matter if there was an IGNORE button.
Gore also bought oceanfront place in Summerland, he wants a front -row seat to watch the sea-level rise!
I recall Truckers, only two and a half years ago, being offered $150,000 to drive trucks.
I feel SOOO sorry for Billy “The Liar” Gates, though.
The Mysterious UN Illegal Migrant Debit Cards |
Some of the The money funding the INVASION and thus THE destruction of the USA revealed!!
link to winterwatch.net
This is a drop in the bucket compared to J. B.Hunt’s dismal earnings report today. A 30% drop in profit this quarter. A huge slide in market cap. That was a leading cause today for the trucking sector decline. I made a tidy intraday profit trading puts. Perhaps again tomorrow.
This wingdoodle internet startup thinks it can tell truckers how to run their business. Ha!
A rising tide of Fed largesse floats many boats, even those made from a sieve to drain investor dollars. Until the punch bowl is strangely empty.
Then, in Buffet’s irreverent words, we discover who was swimming naked.
Yeah, it’s getting old having a bunch of limp wrist internet cowboys trying to run the world sitting at their desk pounding away on the highway to hell machine think I ng everything can be solved with 0000111001100001.
Your comment added exactly: 0000000000000
Yellow Freight went Bankrupt just a couple months ago. JB Hunt getting crushed. They probably should have a couple more people involved in Tech on their team.
Pretending Trucking and Freight is a better run business is silly. It’s boom and bust too.
Looking for answers?
Look here:
Convoy, which raised $260 million in a funding round last year that valued the business at $3.8 billion, on Wednesday told employees in an email that it would stop accepting shipments until further notice and that it was rescheduling or canceling existing loads.
Hmm…
Anxious to read the NAR existing homes sales tomorrow. Economic slowdown is a slow process this time around because of all the stimulus money sloshing around. The Feds are just getting started allocating all the money associated with the porky “Inflation Production Act.”
Too bad for the employees, but not for the “investors.”
Investors lose money too. Guess you don’t really know how that works.
Easy fix. Make all the trucking companies buy really expensive environmental scrubbers for every truck unless they “donate” a lot of money to politicians. The payments must be labeled “campaign contributions”, do not call them bribes.
Require all truck drivers to stop every four hours, hold hands and sing “Our Dear Leader, Biden”. You sing it to the same music as North Korea, and FBI agents will be distributing the lyrics.
Do not fix highways. Do not reduce traffic jams. Do not allow truck drivers to think for themselves. As Canada’s Trudeau explained, thinking for yourself is an act of terrorism. Or was it racism? All the truck drivers have nasty hair, and Trudeau’s hair is amazing! Truckers are racists, Trudeau has big hair, who you gonna believe?
See? Easy fix. No trucking problems here.
In between being a college professor, looking for Nelson Mandela on the streets of Soweto, and fighting Corn Pop, FJB used to drive an 18-wheeler, man.
link to nypost.com
At least two mishtalk readers need a better sense of humor
“Easy fix. Make all the trucking companies buy really expensive environmental scrubbers for every truck unless they “donate” a lot of money to politicians. The payments must be labeled “campaign contributions”, do not call them bribes.”
Isn’t this current policy?
Just wait till turdows brother Gavin gets behind the wheel.
Gates and Gore. Probably one of those woke businesses that people hate these days.
Interesting one of the strongest segments in the retail sales report was appliances. So slow home sales is not crushed appliances. Seems like nothing post pandemic post stimulus really holds form.
Noted, and it’s confusing as f@#$, trading/investing specific sectors is whacked. Looking at housing, you think it’s a recession, yet jobs are strong as all getup.
People can’t afford a house so are upgrading the kitchen as a consolation prize??
Home improvements tend to pick up when home prices stall sales, that’s actually a trading strategy.
Never heard of it