Parade raises $12.7 million to match shipping with transportation
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Freight connecting services, which connect shippers with freight carriers like trucks and vans, are attracting increasing investment. Despite slow initial adoption – in a 2018 FreightWaves survey, carriers using connecting freight services said they only source 11% of their freight from the services – they have become a bigger source of business as the pandemic encourages businesses to invest in digital supply chain solutions. Flock Freight, Loadsmart, Next Trucking and Convoy have raised hundreds of millions of dollars to expand their networks to hundreds of thousands of trucks.
As the freight matching industry becomes increasingly competitive, new startups with new approaches – or what they claim to be new approaches – are emerging to take on the incumbents. Among the newcomers is Parade, which leverages AI-powered technology to help find on-time cargo load, route, equipment type and reliability matches of a carrier (i.e. a sender). Unlike many freight connection services on the market, Parade works with freight brokers – intermediaries between shippers and a freight service provider – rather than shippers directly.
Applying AI to freight matching
Parade, based in San Francisco, Calif., which was founded in 2015 by Anthony Sutardja, Preet Sivia and Tony Wu, offers an operational metrics dashboard designed to help brokers choose the right equipment for a given load. Parade operates as a service and infrastructure provider, providing tools that allow freight brokers to find and book trucks online from most trucking companies in North America.
“[Parade] was first known as a digital broker that sought to quickly connect freight to carriers and owner-operators,” Sutardja said. “We realized that our software would greatly help brokers and [third-party logistics companies] optimize their operations while automating some daily manual workflows and streamlining the process of finding and booking loads digitally. Have these digital tools [allows] brokers [to] scale the business and improve the manual processes currently used in the industry. »
With Parade, brokers can use “AI-informed” carrier profiles to determine lane eligibility and store notes on carrier preferences, capabilities, and engagement metrics. (In trucking, a “lane” refers to any route a carrier covers on a regular schedule.) They can also automatically email targeted opportunities to re-engage and reuse carriers and compare historical and pricing information to bid and negotiate freight shipments. .
“Brokers receive hundreds of emails every day from trucking companies about available trucks. Parade has built a natural language processing engine to read and respond to these emails so brokers don’t have to,” Sutardja explained. “The data available to brokers on trucking companies is incomplete, [so we also] use machine learning to predict what trucking companies like to do and what equipment they have. »
A growing company
Over the past year, Parade said it secured contracts with 97 customers, including major freight brokerage firms like Armstrong Transport, Schneider, USA Truck and Worldwide Express. Highlighting this growth, the company announced today that it has raised $12.7 million in a Series A funding round led by Menlo Ventures with participation from Greenhawk Capital, Jones Capital, The House Fund and Oriza Ventures.
“The team has seen digital transactions handled by Parade customers increase by more than 500% in the past year. The pandemic has increased the demand for trucking capacity,” Sutardja said. [the] labor shortages facing the industry, [there’s] a massive need for digitization across different functionalities, such as marketing or operations. There are [also an] increased need to acquire tools that help increase flexibility, improve the use of human resources and reduce the cost of doing business.
Parade’s total capital of twenty-six employees is $18.4 million, which the company plans to invest in expanding platform capabilities and hiring talent.
Investor enthusiasm aside, it’s critical to note that while software solutions like Parade deliver on their promises, they aren’t always a silver bullet. In another FreightWaves survey conducted in partnership with Redwood, among shippers using APIs – including freight matching services – to digitize their business, more than 40% said APIs had “no significant impact” on revenue.
Still, Sutardja argues that Parade has a significant track in the ever-growing shipping and logistics segment.
“Given the severity of supply chain delivery issues, Parade’s ability to help businesses through brokers is important. Parade’s brokers work for shippers, many of which are businesses and manufacturers in many industries. Shippers have real problems getting the goods delivered. Therefore, they relied heavily on freight brokers and third-party logistics companies to help place the loads on the trucks,” he said. “Parade helps brokers reduce the overhead of booking a load, improve operational efficiency, [and] increase the number of reserved loadouts and digitally reserve loadouts. »
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