[vc_row][vc_column][vc_column_text]The founder of asset-based truckload brokerage Archerhub has spun off the transportation management technology it developed into a new software-as-a-service (SaaS) provider called Alvys aimed at serving small carriers.
The move is part of a broadening of technology options for independent owner-operators and small fleets to run their businesses and manage shipments. That trend is largely driven by the need for shippers to get digitized access to more sources of truckload capacity.
Nick Darmanchev, who founded Archerhub in 2013, told JOC.com he realized small carriers were reticent to commit data to the broker, which was designed to primarily use outside capacity and backfill loads with a small fleet of owned capacity. The company used its proprietary technology to raise driver profitability by sequencing loads for them.
“I saw an incredible opportunity to offer at-scale TMS technology to smaller carriers that is reliable, cost effective, and aligned with the carrier’s interests,” Darmanchev told JOC.com about why he spun off the Archerhub technology. “Like merchants on Amazon’s marketplace, carriers on a broker’s TMS worry that their data will be used against them. Carriers are reluctant to join a platform operated by a freight broker.”
The decision to spin off Alvys was based on the notion that those carriers would feel more empowered using neutral software. There are a range of existing transportation management systems (TMSs) for carriers, with widely used ones such as McLeod Software that appeal to larger carriers competing with lower-priced options designed for small fleets, such as AscendTMS.
Freight broker Transfix in October launched its own standalone carrier TMS, which it offers free, to pull small fleets into its available network of capacity. Drivers using the Transfix product don’t have to work with Transfix loads, but the free nature of the product is clearly designed to induce drivers to stay in Transfix’s network, with the New York-based broker betting on its software being able to attract and retain them.
Network first, then tech
Darmanchev has similar ambitions for Alvys, only as a neutral solutions provider, not a broker. “That’s why we’re going all in on the carriers,” he said. “We want them to come for the network and stay for the tech.”
Solutions for drivers include shipment visibility, fleet management, automated driver payment, and a brokerage module to use overflow capacity. Alvys also lured Leo Gorodinski, former vice president of engineering and an early employee of Jet.com, as chief technology officer and co-founder. Jet.com was acquired by Walmart and serves as the retailer’s e-commerce fulfillment backbone.
Alvys’ system also has tools for shippers and brokers, as Darmanchev envisions all sides benefiting from a common platform in which each party benefits from tools that make some component of their operations more efficient. Kuebix, acquired by Trimble in January, is also trying to build a multi-sided TMS environment in which all three entities can benefit. That approach has been a hard sell historically — many TMSs say they cater to all sides of the industry, but most have a core customer base composed of either shippers, carriers, or brokers.
Another category of software for small carriers that’s emerged in the last year is multi-tenant operational software for small carriers and independent drivers. These solutions, most notably brought to market by CloudTrucks and SmartHop, provide operational support and dispatch software for small truckload carriers. San Francisco-based CloudTrucks dubs itself a “virtual carrier,” while Miami-based SmartHop focuses on back-office software to carriers that generally lack the capital to invest in any administrative or dispatching technology.
Both of these have TMS-like elements but aren’t strictly TMSs. But the range of technology options for small carriers, including mobile apps provided by third-party software providers and incumbent brokers, hints at the importance of structuring the capacity they provide so that shippers can use it.
In November, SmartHop also tied up direct integrations with two brokers — Redwood Logistics and Loadsmart — connections that place available loads from those intermediaries directly in front of drivers using SmartHop’s software.
Darmanchev said small carriers have largely been overlooked and need solutions that let them run their business with ease.
“We believe what sets Alvys apart is our fusion of bottom-up domain expertise, long-term technical strategy, and relentless focus on smaller carriers,” he said. “Without domain expertise, you get tech for tech’s sake, and without a technical strategy, you get a slow, unreliable system, and are constantly fighting fires to keep it running.”
Contact Eric Johnson at firstname.lastname@example.org and follow him on Twitter: @LogTechEric.