In under two years since Flexport acquired Convoy's technological infrastructure, it is now being offloaded to DAT.
DAT Expands Freight Offerings with Acquisition of Convoy Tech Stack
In a strategic move aimed at enhancing its presence in the freight sector, DAT Freight & Analytics, a unit of publicly-traded Roper Technologies (NASDAQ: ROP), has announced the purchase of the Convoy tech stack. This acquisition follows Flexport's decision to sell the technology to focus on its core global freight forwarding business and AI-powered tools.
The Convoy Platform, which has been admired for its robust fraud prevention tools and automation capabilities, will complement DAT's existing flagship load board, DAT One. This combination is expected to enhance DAT's network scale and efficiency, providing brokers and carriers with more loads, greater capacity, reduced manual workload, and faster freight matching.
"The acquisition of the Convoy Platform will advance DAT’s vision of a smarter, more automated freight marketplace," said Jeff Clementz, CEO of DAT Freight & Analytics.
For Flexport, the sale allows the company to refocus on its core global freight forwarding business and product innovation, particularly AI tools. As a key customer of DAT, Flexport is expected to benefit from improved service through focused innovation in freight forwarding tools.
The sale of the Convoy tech stack to DAT reportedly occurred at a price near $250 million.
In addition to the Convoy Platform, DAT has also recently purchased visibility provider Trucker Tools and payments platform Outgo. These acquisitions are part of DAT's ongoing efforts to expand its offerings beyond its traditional load board.
Fees for using the Convoy Platform will be transactional, meaning a DAT user will only pay if a transaction is completed. There will be no upfront fees for users to sign up.
The Convoy system's automation capabilities are expected to make it the primary place for loads to be placed. Brokers may choose to use their private network and put the load on what will now be DAT's Convoy platform if they prefer a hands-off approach.
The load board is expected to remain the primary use case for a long time. However, with the integration of the Convoy Platform, DAT is positioning itself as a comprehensive freight marketplace, offering best-in-class automation, digital freight-matching technology, and a robust, neutral freight execution layer.
This move towards more integrated, technology-driven freight marketplaces is expected to benefit brokers, carriers, and the overall logistics industry. The sale demonstrates the value and potential of neutral tech layers in the evolution of the freight market.
Ryan Petersen, CEO of Flexport, stated that the return on the sale of the Convoy tech puts Flexport in an awesome financial position. The sale of the Convoy tech stack to DAT allows Flexport to continue using the system, with Flexport being DAT's biggest customer.
In summary, the acquisition of the Convoy tech stack by DAT Freight & Analytics signifies a significant step towards a more integrated, technology-driven freight marketplace. This move is expected to benefit all stakeholders in the logistics industry by offering improved service, increased efficiency, and better automation.
The acquisition of the Convoy tech stack by DAT Freight & Analytics marks a strategic advancement in their vision for a smarter, more automated freight marketplace, merging finance and technology to boost efficiency. As a result, DAT's objective to expand its business beyond traditional load board offerings in the freight sector becomes more defined.
