Auptix wants to change the way less-than-truckload works, launching a “hubless” LTL freight-pooling service.
The new service, Auptix Pooling, uses an algorithm to combine LTL shipments that are shipping along the same lane to a specific geographic area. These shipments are loaded in real-time onto a full truckload, bypassing hubs and terminals. Because pooled shipments never see the inside of a warehouse and are never unloaded until they reach the final destination, freight can move faster and cheaper, as well as with much lower risk of damage and loss, according to the company.
Auptix works with thousands of small and medium-sized businesses that ship any combination of LTL, partial, and full truckload shipments, company officials explained to HDT. The pricing model passes discounted rates to all customers regardless of size/volume. Some customers ship as little as a few times per month, whereas others might ship 20 or more times per week.
The company was founded by Oren Zaslansky, who has been in the trucking and logistics industry for some 20 years, starting out with asset-based truckload carrier E&H Transport, then eight years ago starting a company called SolSource Logistics. SolSource uses cloud-based technology and project management to handle logistics for commercial construction and renovation projects, mostly in the hotel and grocery business, with customers such as Whole Foods and Four Seasons.
Trying to coordinate the LTL timing on some of the shipments SolSource was handling for customers led Zaslansky to realize there was an opportunity here, Peter Frys, vice president of operations, told HDT in an interview.
“They were paying high rates for guaranteed LTL and seeing a very high claims rate,” Frys explained. “Within the scope of SolSource, they began experimenting with combining some of these LTL shipments that were going to same client or even to multiple clients in an area, where they would combine them into multi-stop truckloads and move LTL freight without it ever hitting a terminal. They found they were able to hit their pick up and delivery dates with zero damage, and to do it at a lower cost.”
So Zaslansky teamed up with some Silicon Valley contacts and investors to develop a routing and sequencing algorithm that could book LTL shipments from a large and diversified client base, take into consideration constraints such as pickup/delivery times and driver hours of service, and find the most logical, profitable combinations that would meet those constraints. By 2016, they started using it to sell outsourced LTL services in 2016 and broker those out to truckload carriers. It now has enough density of LTL shipments and customers to work well, Frys said.
He also noted that Auptix defines an LTL shipment as anything from a single pallet up to 24 pallets.
“Many people in the industry define 30 feet or 30,000 pounds to be a truckload, but we look at a 24-pallet truckload that’s not sealed and realize it can be paired with a two-pallet LTL, which drastically changes the economics of that load.”
So shippers get a less-expensive way to get their freight where it’s going, with less chance of damage, and truckload carriers that are willing to do multiple stops get more profitable loads.
What's in it for Truckload Carriers?
“We can give a carrier a larger paycheck for any given linehaul,” Frys said. “That’s because by pooling LTL and partial shipments to put together a truckload, we have more revenue than a typical truckload, so we are able to pay a premium on top of what that linehaul rate would be.”
Currently there’s an app for shippers to use, but the carrier interface is still more of a traditional broker situation, with emails and phone calls. However, Auptix is building an app to automate the carrier end of the equation as well, which it expects to be available sometime in 2019.
Frys said truckload carriers typically have concerns about doing multi-stop loads, such as whether all the freight will be ready to pick up on time, and concerns about driver hours of service. “These are all things that we have built processes around, because this is what we specialize in,” Frys said.
The pooled LTL is still only a fraction of the company’s business, but it’s growing fast. While Frys wouldn’t share specific volume numbers, he did say the amount of business has increased by multiple times since a year ago, with the number of pooled loads put together increasing by some six-fold. “Right now we’re executing 10, 20, 30 multi-stop truckloads a day. Right now that’s still a fraction of our LTL, but that fraction we’re able to move has gone up every single month.”
In a press release, Zaslansky said, "At Auptix our main goal is to fundamentally change the LTL shipping industry for small and medium-sized businesses across North America, and, Auptix Pooling does just that.
"The traditional hub and spoke method is not ideal - it takes longer because trucks have to navigate through hubs in route to the final destination and there's a higher chance of damage and loss," continued Zaslansky. "These damages, delays and risks are something small and medium-sized businesses cannot afford.”
