Freight trucking startup Shipwell gets a $10 million boost

A booming American economy coupled with failing infrastructure and a low-margin business reluctant to adopt new technologies have put stress on domestic logistics companies in the $900 billion market for U.S. Shipwell combines a marketplace for shippers to connect with freight companies and online tools to manage those shipments. In effect, the company is pitching a version of the proprietary logistics management toolkit that has made Amazon so successful, to any retailer or outlet. We coordinate the freight, we pay the truckers, we help optimize the fleets, says Shipwell president and co-founder, Jason Traff.

Those services and the companys growing business among small and medium-sized suppliers to the construction industry brought the Austin-based company to the attention of Fifth Wall Ventures, the Los Angeles based investment firm whose limited partners are among the biggest construction companies in the world. Shipwell’s full-service, digitized brokerage platform can streamline the way many of our Anchor LPs and portfolio companies approach large-scale freight shipping, the firms principal and newest Shipwell board member Vik Chawla wrote in a blog post announcing its most recent deal. The companys business isnt for big shippers that deal with thousands of shipments per-day, but rather the small and medium sized businesses that spend $100 million or less per-year on freight. And the small-fleet shipping companies that make up the bulk of the industry.

Beyond these, however, there are easy tie-ins within a number of key categories of Fifth Wall Anchors [sic] that regularly ship or receive freight—developers, of course, but also retail, office, homebuilding anchors. If you are doing $50 million in freight per-year then youre doing dozens of shipments per week, said Traff. Most of our freight is less than a truckload or a full truckload freight and its more long-haul. Supply chains were very complex and there was a lot of building to do, Traff said. Shipwell makes money by charging a commission on freight services and fees for its freight management software platform. This connective approach makes all of the difference in an industry with so many small companies at play, Chawla wrote. A surprising 89% of freight trucks in the U.S. are owned by carriers with fewer than five total trucks, and 99% of freight carriers possess fewer than 10 total trucks in their fleet. Despite the big business of freight shipping in the U.S., it’s actually a fragmented market of small businesses.

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