To eliminate brokers from trucking, one must first walk in their shoes.
That’s the thinking of Sudu, an Atlanta-based startup looking to disrupt the logistics industry. Many tech companies envision a broker-free marketplace, but Sudu is not trying to push automated technology before the industry is ready. It does not even require a mobile app.
Instead the company focused on becoming a channel to minority, women and veteran-owned carriers in mind.
“We initially saw them as the most underserved group, so we focused [there] first,” Amari Ruff, Sudu’s co-founder and chief executive told Trucks.com. Ruff and fellow serial entrepreneur Michelangelo Ho, who also is a co-founder, saw the opportunity to connect these diverse, smaller carriers with larger corporations looking to fulfill diversity initiative commitments.
“The industry is so fragmented,” Ruff said. “If we could create this model to put the trucker first and then layer on speed and efficiency, we could be pretty interesting pretty fast.”
Sudu — which means speed or tempo in Chinese — has received more and more attention since it started, especially in its hometown. The 3-year-old company was included in the first cohort of Engage Ventures, a venture fund backed by the city of Atlanta and 10 heavy-hitting corporations, including Delta Air Lines, UPS, The Home Depot and Cox Enterprises. Sudu gained access to executives at those companies, office space and funding through the program.
Tapping UPS’ access to Coyote Logistics, a large freight services provider, has proven especially valuable, Ruff said.
Sudu structured itself as a conduit between larger companies and the smaller carriers. Larger organizations usually can’t do business with carriers that have less than 100 trucks because they aren’t transporting enough volume to make it worthwhile.
“It’s hard to find diverse carriers that have scale,” Ruff said.
Those smaller carriers normally have to turn to freight brokers, which take hefty margins, sometimes up to 35 percent, he said.
Today, Sudu has evolved the platform originally built into a network of 300,000 carriers of all kinds. It has landed contracts with Walmart, Georgia-Pacific and UPS.
Now Sudu thinks its load-matching technology will set it apart.
“The main goal for us is to remove the typical traditional freight broker out of the equation, harness the truckers up and create a true marketplace where there’s no intermediary to stall the process,” Ruff said.
He envisions a company with a 60 to 70 percent smaller headcount than a traditional logistics operation.
That’s why Sudu has been serving as a traditional broker while building its technology.
“You can’t start on day one with tons of customers and technology that’s going to rule the world,” said Chad Ruff, the company’s chief technology officer. (He is not related to Amari Ruff.)
“We started off as 100 percent brokerage and zero percent technology,” Chad Ruff said. “We’re migrating toward 80 percent technology and 20 percent brokerage. Along the way we’re building the pieces and parts to get there.”
From within the brokerage industry, they are able to see where automation can best be applied in a way that serves the market, he said.
Sudu’s technology applies machine learning and artificial intelligence to carriers’ and shippers’ preferences and activities, continually making the matching process more efficient, Amari Ruff said.
Eventually, a trucker could have “the ability to not only receive a load from A to B but from A to B to C to D and back to A.” This will eliminate empty miles and provide a more stable base from which to project revenues, he said.
Though the business model may sound similar to other companies such as Cargomatic, Transfix and Uber Freight, Amari Ruff said he doesn’t spend much time worrying about competitors and that his customers do not ask about them.
“The value proposition to our customers is over time, as we learn more about you, we will drive down your shipping costs,” he said.
Shane Williams is the owner of SEL Transportation, a five-truck operation out of Dacula, Ga. He said he reaches out to Sudu first when he has availability.
“They don’t ignore a driver sitting,” Williams said. Sudu “knows where I like going. They normally call me whenever they’ve got those loads available.”
Sudu has made a conscious effort to reach drivers and shippers in the ways they prefer. This includes communication via their own website portal, email, online chat or phone call. That is why, unlike some of its competitors, it doesn’t require a mobile app.
“We know that the adoption rate in this industry is very low, so to expect a trucker to have to download a mobile app to work with you is going to cut off a large portion of the market,” Amari Ruff said.
Lisa Marshall handles office sales and customer service out of Arcadia, Calif. for Canna Gardening, a Dutch indoor growing fertilizer company.
She prefers to directly send Sudu the loads she needs shipped.
“What’s nice about them is they let me give them all my [cargo], and they take care of it for me,” Marshall said. “I don’t even know what their website looks like.”
Sudu now needs to raise funds to scale up the business, Amari Ruff said.
“When dealing with the largest corporations in the world, getting that relationship is one thing, but executing is another,” he said.
Beyond its core goal to create a broker-less marketplace, the team has other big ideas about change in the trucking industry, Amari Ruff said. These include trip planning, better insurance rates and parking.