FreightVana Comes Out Of Stealth Mode

In June, about a dozen transportation veterans' LinkedIn profiles suddenly lit up with a new company name — FreightVana — but details about the outfit and its objectives were hard to come by. But now FreightVana's founding team, which includes co-CEOs Shannon Breen and John Gamero as well as Chief Technology Officer Don Everhart (all from Knight-Swift), is ready to talk.

FreightVana executives pointed to what they said was a broken promise of digital freight brokerage, which was, in theory, supposed to use technology to drive internal productivity and maintain profitability on thinner gross margins. Instead, FreightVana maintains, brokers have used their technology to stabilize their own gross margins regardless of market conditions and let their partners — shippers and carriers — take a ride on the rate roller coaster.

"Our reason for being is to create deeper partnerships, built on trust and transparency, between shippers and the small to medium-sized carriers with less than 75 trucks that represent the vast majority of North American truckload capacity," explained Breen.

FreightVana's website touts its team's more than 200 years of transportation and logistics experience to emphasize its freight-centric worldview and its experience in understanding the incentives and pain points that every party to a freight transaction deals with. 

A lot of that experience was at mega-carrier Knight-Swift. Breen, Gamero, and Everhart all came from Knight-Swift, but so did a number of mid-level FreightVana employees spread across the organization in data science, operations, and sales roles. FreightVana executives said that while the company had taken on some strategic investment, Knight-Swift didn't have a financial stake in the company.

Many of FreightVana's core team members were involved in Knight-Swift's brokerage office in Phoenix's East Valley, where the Knight Logistics and Swift Logistics operations were to a great extent merged, stitched together by a new technology platform. When that office opened in 2019, personnel made clear that the logistics organization worked in service of Knight-Swift's vast fleet of tractors, feeding the network with freight optimized for asset utilization and yield.

"For 18 years, I've had the privilege of leading teams that have built technologies primarily focused on solving the problems from the carrier's side of the fence, and now under this new FreightVana banner, we get a chance to take those learnings and efficiencies directly to our shippers' doorsteps," Everhart said.

What shippers want, according to FreightVana, goes far beyond automated load matching and market rates piped in via API. FreightVana is betting that addressing more complex shipper needs like forecasting, warehouse efficiency, yard management and customer delivery compliance will help generate the stickiness and trust it needs to work through the turbulence of freight market cycles. 

Conversations with FreightVana returned more than once to the idea that in today's trucking industry, the short-term way that freight brokers look after their own interests — giving freight back to their customers when the market tightens and pushing rates down when it softens — makes true partnership nearly impossible. By building a team with no physical footprint and no financial sponsors, Breen thinks that FreightVana has given itself the flexibility to put its customers first.

"It turns out, after surveying our shippers and carriers, that none of them want to pay for an office in downtown Chicago with opportunistic margins of 16 to 20% plus," Breen said.

While FreightVana executives demurred when asked about the specifics of their commercial agreements with customers, they emphasized that the 3PL was positioning itself such that it would not gain an advantage by decommitting from freight in tight markets. Executives said that FreightVana had a technology platform in beta that gave its customers "unparalleled access and analytics in real-time," suggesting that new forms of contracted freight agreements, marked to market in real-time, might play a role in FreightVana's solution. The point of the company's model, Breen said, was to align FreightVana's incentives with those of its partners.

Those partners include carriers, of course, and one of FreightVana's capabilities on that side of the market is unique indeed: mergers and acquisitions advisory services. FreightVana co-CEO John Gamero was one of Knight-Swift's top dealmakers, serving as senior vice president of finance and M&A for nearly three years. 

At FreightVana, Gamero wants to use his valuation chops and the 3PL's deep insight into its carrier partners to help those trucking companies sell themselves or combine into larger companies when they're ready. FreightVana said that its diligence and advice is enriched by its insight into its carriers' operations and networks and vice versa — the way it works with carriers on freight is informed by the business profiles created by the advisory business.

"We're able to understand our carrier partners unlike any other broker or 3PL, all the way from their networks, lanes, rates and equipment, and we can deliver that intelligence directly to our shipper partners," Breen said.