Austin Startup Bets on AI Reshaping the Trucking Industry
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Austin-based trucking startup AI Fleet is betting that using artificial intelligence technology and focusing on drivers could help transform the trucking industry.
CEO Marc El Khoury, who formerly worked in the trucking industry as a consultant, co-founded AI Fleet in the summer of 2020. The company uses artificial intelligence technology to streamline operations and improve pain points.
“Our mission is to make truck driving better. That means better for the drivers, better for our customers and better for the overall nation,” El Khoury said. “Today the driver shortage is really nothing but a symptom of how poorly utilized drivers are.”
The trucking industry has a shipper-centric and customer-centric business model, as opposed to driver-centric, he said. The industry is dealing with a high turnover rate among its drivers, El Khoury said.
“Our current drivers overall in the U.S. are unhappy and they’re not making enough money. Clearly, that’s the problem that we have to solve,” he said.
El Khoury said he and his team realized starting a software company that sells products to trucking companies wouldn’t be the best route, because trucking companies tend to not be good buyers of software. Instead, they began to brainstorm about what an ideal trucking company and its business model would look like, and how technology could play a role.
“We basically ended up starting a trucking company from scratch,” El Khoury said. “We use technology to replace a big chunk of our operations. Instead of helping humans do a better job as many trucking companies do, the AI technology is the brain behind making decisions.”
The company’s technology automates order acceptance and planning, as well as a number of back-office operations. Its AI technology is able to pick loads for drivers based on what’s best for the driver, and what will generate the most revenue for the truck. It also provides drivers with details on what their next load will be before they even finish their current one, minimizing downtime.
“A driver journey starts when a driver is available. They usually drive empty miles to pick up their load. But once they arrive to pick up their load, they usually have to wait for their appointment. Once they get to their appointment, you have to wait to get loaded. And then after you’re loaded to drive to your destination, then you have to wait to get unloaded and then you have to wait to get assigned for next load,” El Khoury said. “Every time I said ‘wait’ that is actually an inefficiency in the driver journey.”
El Khoury said some of these issues are within the trucking companies’ control and can be solve with the help of technology.
“Where our technology comes into play, it’s helping us make better decisions by being able to review those billions of options and then assigning loads to drivers in a way to maximize drivers utilization,” he said.
AI Fleet also offers benefits including a guaranteed salary, health care and paid time off. El Khoury said the company also encourages drivers to go home at least once a week. El Khoury said that more than 60% of the company’s hires have come in through referrals, and 30% of the drivers are women.
The company said this week that it raised $21 million in a funding round led by Obvious Ventures, AI Fleet plans to use the funding to acquire new trucks and to improve its technology. It also plans to more than double its employees in operations and technology, as well as hiring more drivers.
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The company has about 60 employees, most of whom are drivers. About 20 are based in Austin, including most of its operations team. The company started in New York but moved to Austin in April.
“We always knew that Austin was actually where we’re going to end up building the company,” he said. “We wanted to take advantage of more space, great talent, both in terms of operations and more specifically, logistics within operations, as well as technology.
El Khoury said AI Fleet’s goal is to become the nation’s largest trucking company.
“Trucking is not scalable today, this driver utilization problem means that large trucking companies at some point say, ‘You know what, if we keep growing or utilization is already low, and it’s going to potentially get worse.’ We are hoping to show that through a different business model and through technology, we can build a scale with trucking companies,” he said.
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