Fast-growing Convoy Takes on Uber in Freight Brokering
Trucking startup Convoy has landed a powerful ally in its race against Uber’s freight efforts through a new multi-year partnership with Anheuser-Busch. Brewing giant Anheuser-Busch was already a Convoy customer, but will commit to move more of its beer over Convoy’s network of trucks as part of the deal. The two companies will also work directly together on logistics and service improvements.
The deal will make Convoy one of the top dozen or so carriers working with Anheuser-Busch, shipping about 500 million cans—or about 9,800 truckloads—of beer next year. But Convoy CEO Dan Lewis is more excited about the improvements he believes his company will be able to make by sharing data with Anheuser-Busch’s teams over a long-term period. As a marketplace for connecting trucks to customers that need their freight hauled, Convoy’s relationship with its clients is typically transactional and “arms-length,” Lewis says. “Together, we can think about how we can innovate to break the mold on a supply chain.”
For Anheuser-Busch, the partnership allows Convoy to see the company’s raw logistical data, something it historical has not done lightly, says vice president Ties Soeters. Anheuser-Busch is looking for ways to better align incentives with its own drivers, improve their routes and contribute to the company’s goal of reducing carbon emissions, the executive says.
Founded in April 2015, Convoy has moved fast in the short time since, going from a tech luminary-studded seed investment that fall to a large Series A investment the following year. It has gained enough scale—10,000 trucking company partners working with 300 corporate clients—to raise a considerable $62 million Series B round from Y Combinator’s Continuity Fund in July. At the time, Convoy already counted Anheuser-Busch and Unilever as flagship customers.
Convoy’s typical user to date has encountered the startup through its app, a short-term marketplace for finding truckers who are both available and cheap. Its marketplace drew immediate comparisons to Uber’s platform for hailing rides—and competition from Uber itself, which has worked for months on its own trucking solution called Uber Freight. Uber also acquired startup Otto, which worked with self-driving trucks, in 2016 and eventually made it part of a group called Uber ATG.
At Convoy, Lewis has repeatedly said that his company is a more open market compared to competitors, who have looked to build up their own supply of truckers—and who may be looking to replace the truckers with technology eventually. To Lewis, Convoy’s app has been a critical tool for collecting data on shipping patterns from clients; the partnership with Anheuser-Busch and long-term deals like it could help the company reduce waste by studying that data collaboratively. “It allows us to focus on the problem, which is, how do we have endless access to capacity and zero waste,” says Lewis.
Anheuser-Busch will continue to partner with other technology companies, says Soeters, but will meet with Convoy on a quarterly basis and share data more regularly than that. He notes that Anheuser-Busch was the customer of Uber’s self-driving truck’s first delivery of a load of Budweiser beers in October 2016. For Convoy, the scale of the Anheuser-Busch commitment represents a coup that could help it sign similar large-scale partnerships with other corporations in the future. Perhaps more importantly, the deal gives Convoy access to a steady stream of data at massive scale. More than anything, that data could prove the difference in a market still in its earliest days. “This is a pretty traditional industry,” says Lewis, its CEO. “We can innovate so much if we trust each other.”
Citations
- http://bit.ly/2gpW761 Forbes
- http://bit.ly/2gpW761 – ttnews.com
Tech Firms Move Into the Renewal Energy Business in a Big Way
Microsoft is to buy all of the energy produced by a General Electric wind farm in Ireland, the companies have announced. The deal is notable not only because it gives Microsoft sustainable power for its cloud operations in Ireland—the base for the company’s European operations—but because of the nature of the equipment itself, and the implications thereof.
According to Microsoft and GE, this will be Europe’s first wind energy deployment where batteries are integrated into the turbines themselves. The companies will test using these batteries for storing energy and releasing it into the grid when it is needed.
This essentially means Microsoft is getting into the sale of power, not just consumption—it is buying an Irish energy supply license from GE, and has brought in Dublin-based energy trading company ElectroRoute to provide trading services. The Tullahennel facility, in County Kerry, will provide 37 megawatts of power.
“Our commitment will help bring new, clean energy to the Irish grid, and contains innovative elements that have the potential to grow the capacity, reliability and capability of the grid. This will make it easier to incorporate new clean power sources like wind energy, and that is good for the environment, for Ireland and for our company,” said Microsoft datacenter strategy general manager Christian Belady in a statement. Microsoft employs around 1,800 people in Ireland, where GE also employs over 1,500 staff.
Technology giants such as Amazon, Google, Apple, and Microsoft are big exponents of sustainable energy, partly for public relations purposes, but also because their data centers use so much power and countries have sustainable energy targets to reach. A recent analysis suggested 15% of Ireland’s total electricity demand will come from data centers by 2026.
In the U.S., clean-energy developers are finding plenty of interest in wind and solar power from businesses with sustainability targets, especially technology companies. Amazon’s CEO, Jeff Bezos, recently christened the 253-megawatt Amazon Wind Farm in Scurry County, Texas. It will deliver more than 1 million megawatt-hours of clean energy to the grid annually, Amazon said in a statement. It is among 18 Amazon wind and solar projects in operation, and the company has more than 35 projects in development. Amazon has bought more than 1.22 gigawatts of output to date from U.S. clean-energy projects, second only to Alphabet Inc.’s Google, with 1.85 gigawatts.
Corporations have agreed to buy 1.9 gigawatts of clean power in the U.S. this year, according to Bloomberg New Energy Finance, and are on pace to match the 2.6 gigawatts signed last year. “Companies are declaring 100 percent renewable-energy targets,” said Kyle Harrison, a New York-based analyst at New Energy Finance. “This will drive new-build regardless of government subsidies. Sustainability is a primary driver.”
Citations
- https://bloom.bg/2yAcJlx – Bloomberg
- http://for.tn/2fYAl9o – Fortune
The Good News Is . . .
- Purchase applications for home mortgages rose a seasonally adjusted 4.0% percent in the October 13 week, lifting the year-on-year rate by 2 percentage points to 9.0% in what is a positive signal for underlying home sales. Refinancing activity was up 3.0% from the previous week. Interest rates edged lower, with the average rate on conforming 30-year fixed mortgages ($424,100 or less) down 2 basis points to 4.14%. The week’s strong results bode well for the recovery of a housing market that stumbled during the third quarter, partly as a result of hurricanes.
- UnitedHealth Group, Inc., a leading provider of health care insurance and technology-enabled health services, reported earnings of $2.66 per share, an increase of 22.6% over year-earlier earnings of $2.17 per share. The firm’s earnings topped the consensus estimate of analysts by $0.10. The company reported revenues of $50.3 billion, an increase of 8.6%. Management attributed the results to strong growth in its Medicare and retirement health insurance segment, and it Optum health services group.
- Food services company Aramark said it would buy Avendra, majority owned by Marriott International, and uniform and linen supplier AmeriPride Services for a total of $2.35 billion, before tax benefit adjustments. Aramark said it would pay Avendra $1.35 billion, or $1.05 billion in net purchase price after adjusting for anticipated tax benefits. AmeriPride’s purchase price of $1 billion came in at $850 million after adjusting for anticipated tax benefits. Separately, Marriott, which owns a 55% stake in Avendra, said it would receive about $650 million from the sale. Aramark said it expected cost synergies of about $40 million from the purchase of Avendra and about $70 million from AmeriPride.
Citations
- https://bloom.bg/2eVhfSb – Bloomberg
- http://cnb.cx/2lwnm3s – CNBC
- http://bit.ly/2xchTkI – UnitedHealthGroup Inc.
- http://reut.rs/2yE1XLC – Reuters
Planning Tips
Guide to Special Uses for Trust Funds
You may be surprised to learn that trust funds serve a purpose beyond funding the lifestyles of young heirs. Trust funds are legal entities that may hold an assortment of assets including cash, stocks and other investments. These assets provide an income stream to benefit named individuals or organizations (beneficiaries). Trust funds may continue to pay out to beneficiaries long after they have been set up, outliving the original contributor (grantor). An attorney is required to set up a trust fund, so expect to pay legal fees. Trust funds created during the grantor’s lifetime are called living trusts. Despite the costs, trust funds are a useful way to manage money when certain factors come into play, or when a specific sequence of events occurs. Below are some situations where a trust fund makes sense. Be sure to consult with your financial advisor to make sure that a trust fund is appropriate for your situation.
A Special Needs Trust – If you have a family member that is physically or mentally disabled, setting up a Special Needs Trust to provide care makes sense. Benefits from a Special Needs Trust may be used for expenses not covered under public benefits programs, as long as they are paid directly to the service provider. This allows the public benefits to continue without being reduced, since a regular cash gift could potentially disqualify them for supplemental security income or Medicaid. Parents, siblings, or other family members related to a special needs individual may set up a trust. Since each state has specific guidelines for how these trusts can be spent, be sure to verify your state’s individual regulations.
Care Management Trust – Care Management Trusts are becoming more common as aging baby boomers and their children recognize the benefit of detailing exactly how they wish to be cared for in their final years. A Care Management Trust, with yourself as the beneficiary, can be used to appoint a person, or “trustee,” to make decisions for you once you become elderly and/or incapacitated. You may address anything you see as important to your future care, such as your wishes about receiving at-home care or moving into an assisted living or long term care facility. Setting up a Care Management Trust before it is actually needed prevents family members from having to second-guess your wishes and make stressful decisions at what may be an emotional time.
Trusts to Benefit Minor Children or Grandchildren – Sometimes a parent, grandparent or other family member passes away and leaves minor children as beneficiaries of their estate. In these cases, a trust fund is a good option to manage the inheritance since most children cannot yet make wise financial decisions. Trust funds for minor children may be set up as part of your estate planning, and could include details such as how the money should be used. Some examples of situations where a minor child trust fund makes sense include children becoming orphaned and receiving insurance funds, donations, or receiving an inheritance that must be managed and then distributed among several minor children. In these cases, aunts, uncles, or grandparents may use a trust fund to manage money for the children.
Trusts to Collect Funds from More Than One Person – In today’s world, a trust fund may even be thought of as a legally structured way to accumulate crowdfunding, especially when it comes to collecting funds from the public in order to benefit a child or a cause; for example, children whose parent(s) have been killed accidentally, or in the line of duty, or children who must undergo expensive medical treatments due to accident or illness. Trust funds can be set up to collect donations from the public to help with living and/or medical costs of beneficiaries.
A Living Trust to Avoid Probate – Some individuals may consider a living trust to avoid the often complicated process of probate when they pass away. This type of trust fund is set up by an individual while they are still alive, who then names themselves as the trustee. Their property is transferred to the trust, though they retain ownership of the property, simply as the trustee. Within the trust, you may name who you would like to inherit the property after your death, called the “successor trustee(s).” This transaction of property after your death is frequently far quicker and less complicated than probate. A living trust is particularly useful for people who own real estate (including vacation property) across the country, as probate of estates including multi-state real-estate can be complex and expensive endeavors.
Citations
- http://bit.ly/2xaJvGP – Nolo.com
- http://bit.ly/2yCpNGX – FindLaw.com
- http://bit.ly/2yxw5Zs – Investopedia
- http://bit.ly/1WvQW3r – LegalZoom.com
- http://bit.ly/2yDGSAx – Forbes
