Transfix Sells Brokerage Business to NFI, Pivots to TMS Offering – Fleet Management

Transfix is the latest digital freight-matching company to be felled by the freight recession.

In a June 5 announcement, trucking and logistics company NFI announced it has acquired Transfix’s freight brokerage operation. Transfix will pivot to focus on its software, with NFI the first customer for Transfix’s TMS.

The acquisition will help NFI grow its brokerage business, coupled with its existing in-house technology. And it will add more than 15,000 motor carriers to NFI’s carrier network.

”As one of the largest and most diversified 3PLs in the marketplace, NFI can leverage its scale and offer its existing service offerings of dedicated transportation, warehousing and distribution, and port services to the Transfix customer base,” said Sid Brown, NFI CEO, in a news release.

“We believe the Transfix TMS will be a game changer for us,” added David Broering, president of Integrated Logistics Solutions at NFI.

“This acquisition and ongoing partnership is a great opportunity to accelerate our digital approach while combining our operational strength with their technical expertise to create more value for our customers and carriers.”

The Rise and Fall of ‘Uber for Freight’ Startups

Established in 2013, Transfix started out as a mobile-based brokerage app that evolved from the founder’s traditional family-owned brokerage business.

The investor market was attracted by this “Uber-like” tech approach that many said would “disrupt” trucking.

In 2016, for instance, Transfix raised $22 million in Series B funding led by an investment from New Enterprise Associations.

At the time, NEA said, “Transfix has differentiated themselves in a space, which is expected to grow more than 20% in the next decade, by using a tech-first approach to the full truckload market. Seventy percent of the trucking industry relies on brokers to help match customers to carriers, and Transfix’s technology brings much-needed innovation to the market, as well as efficiency not previously available.”

Other tech brokerage/freight matching startups included Convoy, Next Trucking, Loadsmart, Doft, Trucker Path, Cargomatic, and CargoX, before Uber actually launched its own platform in 2017.

By 2019, HDT was writing about how this technology was changing the way carriers, shippers, and brokers connect.

But the two-year downturn in the freight industry and a pullback from investors, as well as high interest rates that made it harder to raise new funding, have hit digital freight brokers hard — not just Transfix.

Last year, for instance, one of the early digital freight companies, Convoy, closed its doors, selling its technology to Flexport.

Another early digital freight pioneer, Next Trucking, was acquired a few months ago by competitor CDL 1000.

Uber Freight, however, appears to still be going strong and expanding its offerings.

Transfix: New Focus on its TMS

By divesting its freight brokerage operation, Transfix will now entirely focus on taking its technology to market as a Software-as-a-Solution (SaaS) and data solutions provider for brokers, shippers, and carriers.

The new chapter of Transfix starts by offering a software-as-a-service suite designed to bring efficiency and transparency to various stages of the truckload lifecycle for freight brokers, shippers, and carriers, according to Transfix — and cut processing costs at the same time.

The Transfix Intelligent Freight Platform, a TMS that uses automation and machine-learning, has helped power the logistics networks of hundreds of retailers, consumer brands, manufacturers, and logistics companies, according to the NFI announcement.

“Finding a home for our brokerage gave us an incredible opportunity to open up all the innovation we’ve created and offer it in a more meaningful way to our freight brokerage peers,” said Transfix CEO and Co-Founder Jonathan Salama in a blog post.

“For 10 years, Transfix has been building and optimizing a technology and data platform that has not only addressed the challenges of the industry in real-time, but with a level of sophistication and firsthand experience that, we believe, is unmatched in this sector.”

“As someone who grew up in the brokerage business, I am thrilled about the next chapter at Transfix,” said Drew McElroy, co-founder and chairman of the board at Transfix.

“Opening up our decade of technological advancements to brokers industry-wide is set to create substantial value for brokers everywhere.”