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Drew McElroy was born into the trucking industry. His parents even named their freight brokerage after him, Andrew’s Express.
After his father passed away, McElroy took over the family business, which had long been a two-person operation using written ledgers run out of a spare bedroom, matching shipments to truckers. His parents were already doing an impressive $4 million in annual revenue, but McElroy helped grow that to $12 million.
But the truth is, the way his parents and the rest of the industry have historically run their operations was terribly inefficient. It generally takes three hours of calling around and faxing orders to set up every shipment, according to McElroy. And it doesn’t work that well: Some 20 billion miles per year in the U.S. are driven by empty trucks.
I know what you’re thinking. There should be an Uber for trucking. And in fact, there are: DashHaul, CargoMatic, Keychain Logistics. But perhaps who better than McElroy, a 32-year-old native of the industry, to take the idea on.
McElroy has now founded a New York City-based startup called Transfix, which has a smartphone app that matches shipments with drivers. The aim is to remove the need for businesses like his family’s, while taking a slightly smaller cut of transactions than the norm — generally 10 percent. “My family’s little business was not going to be the platform for taking over the world,” McElroy said.
Transfix is already being tested by Barnes and Noble, Samsung, SuperValu and J.Crew, and cutting their “deadhead” runs (time driving without cargo) in half or more, according to McElroy. Last year the company received $1.8 million in funding from Bowery Capital, Lerer Hippeau, Founder Collective, TriplePoint Capital and others.
Tranfix fits into the larger phenomenon of consumer technology being extended into enormous existing industries. Annual American trucking spending is estimated at $600 billion. It’s been surprisingly easy to break into the market, McElroy said, because large retailers and brands are increasingly willing to work with startups — and because some 90 percent of truck drivers already have smartphones.
“They spend so much time in the cab,” McElroy said, “that on a consumer level, they’ve really embraced technology.”
This article originally appeared on Recode.net.
