In the trucking industry, “dwell and detention” times are the enemies of efficiency, profits and drivers. More than two billion hours are lost each year due to dwell — the time spent at a distribution yard or facility — and detention — the gap between when unloading or loading is supposed to begin and when it actually does.
Baton, a San Francisco-based startup developed out of 8VC’s incubator program, has developed a business that it believes will solve these long-standing problems for truckers. The company’s name gives a hint at its business model. Baton is developing a network of drop zones, 24-hour facilities it has sub-leased from partners, that are located outside of busy urban centers. Long-haul truckers can pull up and leave their loaded trailers at these drop zones. Baton then partners with local fleets of Class 8 trucks that will arrive at the drop site, grab the load and take the freight to its final destination.
The startup developed a software platform that coordinates vehicles, drop-zones, warehouses and local drivers through a single API. Customers also receive live automated updates via API as loads are delivered.
“In long-haul trucking, there’s a remarkable amount of wasted time,” co-founder Andrew Berberick said in a recent interview. Baton’s pitch is that it eliminates hours wasted with dwell and detention as well as the time spent sitting in traffic. The company says it can also help increase wages for drivers, who are typically paid by the mile and not the hour, as well as cut carbon emissions.
Baton has landed long-haul trucking firms as customers, including CRST, the private freight company that carries loads for some of the country’s largest retailers, including Walmart. And it’s also attracted a variety of strategic investors. The company raised its first $3.3 million from real estate corporation Prologis and 8VC, in a seed round that closed in December 2019. Now, it’s tacking on more capital and investors in a Series A funding round, co-led by 8VC and Maersk Growth, the corporate venture arm of logistics giant AP Moller-Maersk.
Baton raised $10.5 million in the Series A, and now has a post-money valuation of $50 million, co-founders Nate Robert and Berberick told TC. Prologis, Ryder, Lineage Logistics, Project44 CEO Jett McCandless, KeepTruckin’ CEO Shoaib Makani, Clarendon Capital operating partner John Larkin, I.S.G founder Trace Haggard and Cooley LLC all participated in the round.
Baton has several drop zones in Los Angeles, with plans to open more in the city. Robert and Berberick said their plan is to open zones in Atlanta, Chicago and Dallas in the next 12 to 18 months.
Baton’s short-term aim is to end waste in human-driven trucking operations. But Robert says the business model is well-positioned to handle what he says will be the first viable applications of autonomous trucks. “The answer is on highways only,” Robert said. “And for that to occur you’ll have to have a nationwide network of transfer hubs.”
Baton is already piloting the idea, which Robert called “autonomous relays,” with an unnamed self-driving trucks company on the Arizona-California border.
“As we see automated and eventually electric trucks become standard for certain routes, the network of Baton hubs and the coordination provided by its software will become seen as core infrastructure. Baton makes the transformation to automated trucking possible,” 8VC partner and co-founder Jake Medwell said.