Truck Technology Startup Raises $97 Million for Port Freight Plan
January 23 2019 - 5:29AM
Dow Jones News
By Erica E. Phillips
The developer of a freight-matching app for truck drivers and
shippers at the ports of Los Angeles and Long Beach has raised $97
million in new funding as the startup works to improve its
fledgling technology and expand to other ports.
NEXT Trucking Inc. said Wednesday that Brookfield Asset
Management Inc.'s venture investment arm is leading the Series B
funding round together with Sequoia Capital, logistics property
developer GLP and other backers. Brookfield owns some 37 seaport
facilities globally, including the TraPac LLC terminal at the Port
of Los Angeles, where NEXT trucking has been working to integrate
its technology with the facility's container-pickup appointment
system.
NEXT's app seeks to provide greater visibility on cargo
movements at the nation's busiest container shipping complex.
Seaport terminals tend to be particularly opaque points in many
supply chains, said Josh Raffaelli, a managing director with
Brookfield Ventures. "We're dealing with a fragmented base of
trucking companies coming in and shippers who want to know where
their goods are," Mr. Raffaelli said.
"I think TraPac will be at the vanguard of what the art of the
possible will look like" in logistics, added Mr. Raffaelli.
NEXT is part of a stream of startups that have drawn big
investor interest with plans to use new app-driven technology to
smooth out inefficiencies in freight transport by matching shippers
with truckers. Most freight-brokerage startups, including Convoy
Inc., Transfix Inc. and Uber Technologies Inc.'s Uber Freight arm,
have focused primarily on the full-truckload market.
A smaller number have focused on hauling goods to and from
seaports, including Cargomatic Inc. and DrayNow Inc. Among those,
NEXT, of Lynwood, Calif., has drawn by far the most investor
interest, raising a total of $125 million to date.
The investment comes as a pretariff surge in imports has caused
extensive delays and congestion at Southern California ports, key
gateways for goods coming from Asia. The crowded conditions have
led to lengthy delays in handling goods and triggered a battle
between shippers, carriers and port operators over fees that
terminals impose on containers left for too long on the docks or
held for too long off-site, known as detention and demurrage.
U.S. maritime regulators are looking at the charges, which are
aimed at preventing cargo owners from using the docks or shipping
companies' equipment for storage. But shippers say the fees are
often onerous and don't take into account the delays that arise
when ports are backed up for various reasons.
NEXT's technology aims to connect available truck drivers and
small trucking companies with retailers and manufacturers in real
time. The technology streamlines communications between carriers
and their customers, scrubbing inefficiencies from what often
appears to be a dense and complicated freight-booking process.
Last year, NEXT added a port-specific booking platform
integrated with the company's own warehouse and container yard
about 15 miles from the Southern California ports. Rather than
hauling containers to customer sites up to a day's drive from the
ports, truckers bring goods to the company's nearby yard and head
back to the port for more. A separate fleet of drivers then take
containers from NEXT's yard to their final destination, booking
those trips through the app.
"We believe we have completely reimagined the traditional
carrier-shipper relationship," said Chief Executive Lidia Yan.
Since launching in 2015, NEXT has added more than 15,000 drivers
to its platform. With the new round of funding, NEXT plans to hire
more engineers to build out its new "Relay" program and add sales
and operations staff to expand the business, all while expanding
its footprint to a handful of other port markets.
"It's the top of the funnel, the beginning of the process when
you're bringing something into the country -- it all starts at the
port," said Omar Hamoui, a partner at Sequoia Capital, which led a
funding round for NEXT about a year ago.
Write to Erica E. Phillips at erica.phillips@wsj.com
(END) Dow Jones Newswires
January 23, 2019 05:14 ET (10:14 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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