Convoy, the tech-heavy digital freight network and load board, will close down amid a hammering from the harsh freight market, according to an internal message from CEO Dan Lewis.
Previously, we reported that the load board had gone blank, canceling all current loads. We heard back from several truckers, some of whom reported loads completed as normal, and others concerned about payments as all shipments on the app were canceled in bulk.
Convoy representatives on Wednesday blamed the cancelation on a technical error in the app, but the company confirmed on Thursday that this was the end. In his message to the company, Lewis told employees, besides a select few that will stay on to help in the "transition," that "today is your last day at the company."
"So, what happened? In short, we are in the middle of a massive freight recession and a contraction in the capital markets," Lewis wrote. "This combination ultimately crushed our progress at the same time that it was crushing our logical strategic acquirer -- it was the perfect storm."
Convoy had raised venture capital funding, most recently being valued at $3.8 billion.
Anne Reinke, president and CEO of the Transportation Intermediaries Association, the trade group for brokers like Convoy, echoed Lewis' statements about the rate environment.
"The freight market currently faces some substantial challenges, evidenced by the rate compression throughout the supply chain, and we are seeing this impact on numerous TIA members," she wrote in an email. "With Convoy, we are, first and foremost, mindful of the employees who lost their jobs and the carrier relationships that will be affected. Many companies continue to grapple with this freight recession, necessitating constant adaptation. Nevertheless, the industry's inherent resilience leaves us confident that our members and our industry will overcome these obstacles over time."
