The trucking industry is among the U.S. economy’s largest sectors, valued at roughly $800 billion annually. However, fragmentation and the sheer number of small- and mid-tier fleets operating within the market has hindered the adoption of technology within the industry. Many asset-based carriers in the market today still run their processes on outdated systems, struggling with inefficiency and a general lack of visibility into operations.
Traditionally, trucking businesses have operated on slim margins. This, when added to the volatility brought in by COVID-19, can put operations in a tight spot. Austin-based logistics software startup Magnus Technologies solves this issue by helping small- and mid-tier trucking fleets remotely track and manage their operations via a cloud-based platform.
“The asset-based carrier market is generally underserved, in the sense that there aren’t many tech-forward firms that are building products for them. You do have several solutions in the market for digital brokerages and freight matching marketplaces, but carriers – especially small- to mid-sized carriers – are still mostly using archaic technology and antiquated paper-based processes,” said Matt Cartwright, the co-founder and CEO of Magnus.
For Magnus, this was reason enough to build a technology platform that can run the entirety of a trucking fleet’s business operations – including features that help fleets to integrate Magnus with other platforms in the market. Cartwright contended that the industry is “ripe for digitization” because the technology of today can automate most recurring back office processes.
“Trucking fleets run a multitude of systems that are siloed and disparate. These systems require them to log in and out of five to six different platforms every time. People also run spreadsheets and write on whiteboards in the back office, running their operations totally offline,” said Cartwright. “This causes problems. For instance, fleets find that their electronic logging device systems don’t talk to their spreadsheets. At Magnus, we displace this entire cobbled-together infrastructure and replace it with a single system that can fully take on the entire process in the cloud.”
Assimilating all disparate business processes into a single system allows fleets to grow their businesses more profitably, while also yielding a higher margin per load.
Before building its platform, Magnus worked with a highly regarded management consulting firm to do a comprehensive study of the market and gain a more granular understanding of the issues faced by carriers.
The 12-week long study shed light on the size of the market, the systems in widespread use, the willingness of fleets to switch to a better product, and whether fleets were running systems patched together in-house or running off-the-shelf systems. Cartwright explained that the study’s observations fell in line with Magnus’ market view.
“Our basic premise was that carriers would choose a better platform if given an option. They would be willing to go through the switching costs required because the payback was immediate,” said Cartwright. “There is a dearth of such platforms today. The slightly better ones in the market only target 5-10% of a carrier’s business. But now, Magnus offers a product that can take on the entirety of a carrier’s business and align it to growth.”
The company’s growth so far has been through word of mouth, said Cartwright. Part of the challenge now is for Magnus to build its brand by getting the story out. The company’s ability to integrate seamlessly with other platforms in the market helps its cause too, making it easier for carriers using different platforms to adopt Magnus.
Cartwright contended that a crisis like COVID-19 highlighted the need for a reliable, cloud-based system to automate operations, allow teams to work virtually and integrate with their customers, partners and suppliers. Too many operators have shared with Magnus that they were having a hard time staying connected with their fleets, people and customers. These challenges are largely driven because companies have their servers in a now-empty office or use antiquated methods of interacting with their clients.
“With our solution, we fill in significant gaps in existing systems. It will take a while before everyone adjusts to the new normal as the pandemic subsides. As companies wait for the pipeline to refill, now is the time to begin shifting to a better way of doing business – one that ensures that their companies are positioned better for growth,” said Cartwright.
