Valued at nearly $800 billion, the U.S. trucking industry is a massive market involving millions of stakeholders, including owner-operators, fleets and brokers. Albeit a vast economy, the trucking industry is highly fragmented, with over 90% of all the fleets being owner-operated and about 5% of the remaining fleets being small and mid-sized (less than 20 trucks in operation).
Much has been reported on the trucking industry’s resistance to adopting technology into mainstream operations. Technology growth in the ecosystem has been sluggish, in part because its price point was too much for the majority of owner-operators, who incidentally, run less than five trucks.
For instance, the transportation management system (TMS) software of major providers was seldom developed to meet the needs of small trucking firms. Deploying a highly rated TMS solution across a fleet of 50 trucks would cost over $100,000 in implementation and annual licensing fee – above the financial bandwidth possible for owner-operators and small fleets.
California-based startup LoadStop is addressing this disconnect in the market by providing a TMS solution that is affordable to every trucking fleet – however big or small. “Our idea was to create a software that offered the value of a $100,000 TMS. Though our TMS comes with a built-in compliance manager, LoadStop’s unique proposition is our autonomous dispatcher,” said Omer Cheema, the co-founder of LoadStop.
The autonomous dispatcher takes in data from all the major load boards across the country, runs them through its machine learning algorithms to help match fleets on its platform with their best load options, placing them in the order of choice. The dispatcher does this by tapping into available market intelligence and analyzing the fleet size, preferred hauling region, available drivers, and several other parameters, to focus on compatible matches.
Cheema explained that having visibility into the market and trucking operations is critical to staying afloat in the highly volatile market – the absence of which forced several hundred of small trucking fleets to go bankrupt over the last year.
Before launching LoadStop, Cheema and the other co-founders spoke with a few of their potential customers across several markets, including northern California and Ontario – two of the major trucking markets on the West Coast. “We realized that there were a lot of gaps between workflows. For example, issues with finding split load functionality in existing workflows,” said Cheema. “And no two markets have the same set of problems. The Seattle market has different issues than in northern California.”
For the beta testing phase, LoadStop ensured it addressed workflow needs while introducing several other functionalities. Cheema explained that the sizes of the trucking companies dictated what they wanted out of the solution. “The larger companies were more demanding of technology, while the smaller fleets were primarily looking to sort internal organizational issues and regulatory compliance,” he said.
After extensive beta tests, the startup launched publicly in October 2019, and over the months since has built itself a customer base of more than 1,000 trucks. However, Cheema contended the actual number of trucks might be around 2,000 as the startup allowed its customers to split their loads with their subcontractors. That said, LoadStop monitors all the trucks that carry freight that is transacted via its platform.
For LoadStop, the current challenge is about scaling up seamlessly, as the startup has gotten more traction than expected in its initial months. Cheema explained that this was due to the company’s promise to provide fleets with a single window for all their operations and visibility needs, making life simpler for fleets.
“The whole effort of LoadStop is to make freight operations simple and one-window operable, while helping grow the fleet’s bottom-line by increasing access and visibility to the freight market,” said Cheema.