by WEX Fleet
When we think of the trucking industry, we rarely think of startups, but the truth is the trucking industry introduces new ventures regularly, and technological innovations in transportation are attracting investors and driving fleet growth more than ever before. Speculators are even suggesting that the trucking industry will be a trillion-dollar industry by 2024.
According to a recent report from New York research firm CB Insights, investors have poured $2 billion into trucking tech startups as of May 21. Hyeri Kim from CB notes that the $2 billion figure encompasses 27 deals. For all of 2018, investment in the sector reached $3.6 billion.
Shoaib Makani, co-founder and CEO of KeepTruckin, a fleet technology and connectivity firm based in San Francisco, suggests that investors see a huge value and even bigger potential in the technology able to connect freight from factory to warehouse to truck throughout the course of a scheduled trip. Transparency in telematics and fleet management software are providing data and real-time visibility of every truck on the road today. KeepTruckin supports fleet growth by helping companies manage their fleet and drivers through real-time connectivity and visibility. The company is currently worth $1.4 billion and does not show signs of slowing down, which means they will continue to enhance and implement new fleet technologies, transforming the industry as we know it.
Connectivity in trucking is a global venture inspiring many companies to consider the global market beyond the capacity here in the United States. Three such companies using fleet technology and global access have been successful in attracting investors to help grow trucking around the world. While these companies have different objectives than OTR trucking, they will still have an impact on the industry and are proof that technology in trucking is growing rapidly.
1. Kargo Myanmar describes itself as a marketplace for trucks. According to the Myanmar Times, the company wants to link up truck drivers who aren’t getting much business with companies that need them. The company also wants to eventually provide farmers in rural Myanmar with access to logistics services directly.
2. From the customer angle, Berlin- and Hamburg-based startup FreightHub raised $30 million last week. The company wants to make freight more “digital.” It provides real-time insights and transparency to customers with an eye not only on rail freight, but also services for the sea and air. It has 1,500 customers, Freightwaves reported.
3. Finally, from the company perspective, Data Gumbo said it raised a $6 million Series A to add blockchain to the supply chain of the oil and gas industry —another traditional industry that you wouldn’t think was ready to be techified. The founder, Andrew Bruce, told Crunchbase News that two years ago, people in the oil and gas industry would have ignored this kind of concept. Now, he said, they’re listening.
Fleet Technology Is Not the Only Thing Driving Fleet Value
While advances in fleet technology are attracting investors to the industry, other strategies and tools are giving individual fleets considerable value and should not be ignored.
1. Brand Identity and Culture: A positive brand perception by both external audiences and internal teams is vital in building brand value and company worth. Without a strong brand platform and rich company culture, profitability might not be possible. How your company is perceived matters now more than ever, which is why more and more fleet managers are focusing on and embracing culture to attract and retain employees as well as partners and customers.
Trucking companies are beginning to realize that customers and employees are making choices based on the perception of a company culture built on real and specific beliefs and values. That is why they are investing in brand culture as part of the overall business strategy.
— Jane Naillon, founder, See Jane Brand Strategy
2. Strategic Partners: Trucking companies are also looking to partners for guidance on aspects of the business where they may not have specific expertise themselves. They are looking to industry leaders like WEX to help with the financial aspects of the business. By engaging a partner like WEX, who knows the trucking industry as well as they know payments, a fleet can focus on delivering the service they know best. A partner like WEX can also simplify business systems through fleet payment technology, unlocking insights and opportunities that will lead to even more success in operations and fleet growth.
3. Planning and Cash Flow: While the industry may be growing to a staggering trillion dollars in worth, individual fleets still find challenges when it comes to immediate cash flow. Knowledgeable fleet factoring partners can be considered fundamental in planning for a one- to five-year budget. A company like Fleet One Factoring can advise on best strategies for investing, provide recourse or non-recourse options, and protect your fleet from lost revenue.
Developing a fleet growth strategy can seem daunting, but with the support of a strong brand image and healthy culture, fleet technology, expert partners, and thorough planning, it is not only possible, it is guaranteed.