Like many of the small-time truckers who bet big on Convoy, the Seattle freight startup that failed last fall, Angadjot Sandhu didn't realize the ride was over until it was too late.
Sandhu, 37, started using Convoy in 2020 to find jobs for his one-rig trucking business in Kent, Wash. Convoy's app, a kind of Uber for cargo, let Sandhu bid on freight from local companies more efficiently and often at a better price than through traditional freight brokers.
Within a year, Sandhu was so busy hauling Convoy loads that he bought a second truck and hired a second driver. By last October, Sandhu, a tall, soft-spoken Punjabi immigrant who also works on his family's Central Washington commercial orchards, had five trucks, $500,000 in annual revenue and his own truck yard in Auburn, Wash. Convoy, he says, "was a revolution in the industry."
It was a common reaction for many of the hundreds of thousands of truckers who were swept up in Convoy's ambitious plan to digitally disrupt the century-old system of truck freight.
On Oct. 17, the Convoy revolution collapsed.
Late that evening, Convoy began canceling Sandhu's scheduled loads, one after another. Sandhu told his drivers not to worry. He had contracts with Convoy. He knew Convoy employees and had even visited its posh headquarters in downtown Seattle. "They're a multimillion-dollar company," Sandhu told himself.
But two days later, Convoy said it was shutting down and laying off most of its roughly 500 staff due to a slumping freight market and balking investors.
Nearly four months on, Sandhu still hasn't seen the more than $30,000 he says Convoy owes him. He has let drivers go and struggles in a market that no longer needs so many trucks. "If you could see my pressure right now, my stress level," said Sandhu, standing next to his idled rigs. "This is a big hit."
When Convoy closed last year, the headlines focused on the startup's epic fall from grace. In a matter of days, a tech "unicorn" once valued at $3.8 billion and backed by Jeff Bezos, Bill Gates and even U2's Bono had been shut down and its famous technology sold off.
But Convoy's failure set off another, quieter collapse among the army of small trucking companies that Convoy built its business around.
Some haven't been paid, although that number may be relatively small, according to several former Convoy employees who spoke on condition of anonymity to avoid complicating employment prospects.
Others were left with expanded, expensive operations in a down freight market, along with a tangle of broken business relationships and litigation.
Eagle Radovish is a literal mom-and-pop carrier in Illinois that grew from six to 11 rigs working for Convoy. The carrier is now fighting over $156,000 Convoy owes an intermediary that manages Eagle's payments, according to Biljana Filipova, who runs Eagle with her husband. The dispute, she said, "is breaking my whole family."
Ironically, Sandhu and Filipova were exactly the sort of small-scale operators Convoy turned to as it took on the trucking business nearly a decade ago.
Most U.S. truck-hauled freight is moved under contract, often by big national carriers hauling loads for major companies such as Walmart or Costco.
But a significant share goes with smaller trucking companies and one-rig "owner-operators" who make up much of the U.S. trucking fleet. Smaller carriers frequently had to scrounge for jobs on online load boards or with commissioned brokers who often relied on phone calls, emails and personal relationships.
If Convoy could automate that load-to-truck "matching" through an easy-to-use app, founders Dan Lewis and Grant Goodale reckoned they could poach many of those smaller trucking companies, organize them into a virtual mega-carrier and win business from Fortune 500 companies.
Volume would be key. Convoy initially went after freight that bigger carriers didn't want.
Convoy didn't initially target the smallest carriers. But when the app went live in late 2015, it was carriers with five or fewer rigs who used it most consistently, according to several former employees.
These smaller carriers soon formed the bulk of Convoy's fleet and became the center of its strategy. As Lewis told Forbes in 2017, "Anything we can do to help these small trucking businesses on our platform, certainly we want to do."
It proved effective. Eagle Radovish, for example, had six trucks when the company started driving exclusively for Convoy in January 2023, but quickly expanded, said Filipova.
Sandhu had just two trucks when he switched to working full time with Convoy in early 2022, but soon added two more trucks and dreamed of a fleet of 13. "The growth I was doing -- they let me grow that much," Sandhu said. "Simple as that."
Convoy wasn't the only company trying to disrupt freight. Uber and Amazon both launched freight services and other startups were entering the space. Bigger carriers and brokerages were getting more digital.
But Convoy's early success was getting traction with investors. By 2018, the startup had raised $265 million and was valued at $1 billion, the threshold for a tech "unicorn." By early 2022, Convoy had raised nearly $700 million more and was valued at $3.8 billion, with much speculation about going public.
As Convoy added more carriers, it was able to take more loads from more customers, which in turn let it recruit even more carriers, and so on. More loads also meant more data for Convoy's engineers to steadily improve the platform and push down per-load costs. If all went to plan, the company would break even and start to profit by around 2024, according to a former employee.
And much of that growth in volume would come by continuing to appeal to smaller truckers -- those already on Convoy's platform, but also the newcomers flooding the market to take advantage of a pandemic-fueled spike in freight rates.
Sandhu, who became dedicated in early 2022, knew it was risky to rely solely on Convoy. His family's farm had nearly gone under when their sole fruit buyer went bankrupt in 2016.
Indeed, it was in response to that loss that Sandhu and his father diversified into transportation, first as Uber drivers in the Seattle area, and then as commercial truckers.
But Sandhu said any concerns about Convoy were allayed by its well-run operations and by its trappings of startup success.
Just before Christmas 2022, Sandhu paid a visit to Convoy's headquarters in downtown Seattle. As he was shown around, he said, he was deeply impressed by the size and "high end" quality of the space, which had a "nice view," all of which seemed proof of Convoy's stability.
"They're big," Sandhu recalls thinking. "They look pretty solid to me."
In fact, by Christmas 2022, Convoy's volume-driven strategy was already deflating.
The pandemic-fueled freight boom had begun to cool in mid-2022.
Even before then, some carriers were worried. They were keenly aware that the market was cooling. Trucking companies were cutting staff or closing down: In August, Tennessee-based trucking giant Yellow Corp. filed bankruptcy. Some complained about deteriorating communication between Convoy and its carriers.
For others, however, Convoy was acting as if nothing was wrong. Around September, Convoy extended Eagle Radovish's contract through December 2024, Filipova said, and offered a contract to Gersch, the trucker from Virginia.
As late as Oct. 16, Convoy was offering Sandhu extra work hauling at night, he said. Sandhu was so confident in Convoy that in early October, he paid $35,000 for a fifth truck.
Barely a week later, Convoy shut down.
As for Convoy's former carriers, the picture remains cloudy.
After the shutdown, a skeleton crew of Convoy workers were kept on to collect funds owed by customers and pay carriers, two former Convoy employees said. But it's not clear how long that effort lasted or who was left unpaid; queries to a member of the collections crew and to Hercules got no responses.
Hari, a California-based carrier, tried to hold onto four of the trailers as leverage for $100,000 it lost after Convoy failed to pay Hari's factor. The plan fizzled after the trailer-leasing company reported the trailers as stolen and police showed up, said Rajiv Goswami, Hari's chief operating officer.
Goswami doesn't blame the equipment companies. Anyone who worked with or for Convoy has a legitimate grievance, he said, "except for Convoy, who screwed up everything."
Last month, Sandhu heard that Flexport plans to revive the Convoy platform and possibly bring on former Convoy carriers. Yet as much as he misses the Convoy app, he's leery. Flexport also has been slashing staff, with 400 more layoffs last week. And in any case, Sandhu said he'll never again rely on a single broker.
Still, Sandhu remains upbeat. He hasn't sold any of his trucks, in part because there aren't many buyers, but also because he wants to be ready when the freight market rebounds.
He credits that hopefulness to his life in farming, a cyclical business, much like trucking, where the inevitable bad years make optimism a job requirement.
"Losses are part of life," Sandhu said. "Simple as that."