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Flock Freight, a "hubless" freight logistics company, today announced a $50 million Series B funding round led by SignalFire and GLP Capital Partners.
With the latest funding round, the Solana Beach, California startup will continue to build out its core technology – assembling "algorithmically created carpools" of less-than-truckload (LTL) freight shipments so they can be shipped via full truckload, increasing affordability for shippers and revenue potential for carriers.
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"We're taking LTL and repackaging it as FTL," Oren Zaslansky, chief executive officer and founder of Flock Freight, told FreightWaves. "Our value creation is in repackaging the freight."
A serial entrepreneur who founded – and still owns – companies in the truckload and brokerage spaces, Zaslansky said he zeroed in on LTL for his next venture because "it is high price and low quality."
He's not taking a shot at the LTL providers, he explained, but at the "hub and spoke model," which typically requires trucks to transport less-than-truckload freight to a processing facility, where it is distributed via another truck.
"That [hub and spoke] mousetrap is a 100-year old innovation," Zaslansky said, providing more opportunities for delays and damaged delivery. "It's time to change."
Bundling parcels and other freight shipments to improve efficiencies is not exactly a new idea. Shippers and carriers have done just that "since the dawn of time," Zaslansky acknowledged. What distinguishes Flock Freight is its automated product offering that brings an ad hoc system into the 21st century.
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"Never before has a customer had the opportunity to run a quote and order something, and have it guaranteed to be pooled or hubless," he said.
Ticking off a list of benefits, Zaslansky said the service never moves freight from the truck until it reaches its final destination, eliminating the potential for damaged shipments. It offers a guaranteed delivery date, ensuring that companies won't run up the hefty fees associated with late deliveries.
Flock Freight is also redefining the pricing structure associated with the traditional LTL model – expanding partnerships with truckload carrier networks and tapping their excess capacity to ensure trucks are filled.
"We're taking on the risk and the mathematical work that it takes to build multi-stop carpools," Zaslansky said.
Zaslansky described Flock Freight, founded in 2015, as a technology company and brokerage. He said the company isn't particularly interested in load matching – the purview of many digital brokerages – but as it scales does want to become more efficient.
"Every time you double your volume, you see an 8x degradation of time, which is a nightmare," Zaslansky said. "So we're investing constantly, hiring more Ph.Ds, more data scientists to build better and better technology."
The team will also use the latest funding round to invest in a "major digital integration," via electronic logging devices or a transportation management system.
Image Sourced from Pixabay
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.