Matt McKinney, Co-Founder & CEO at Loop (Photo/Courtesy of Loop)
In many ways, trucking is the backbone of the American economy.
In 2022, trucks transported nearly 11.5 billion tons of freight in the United States, representing 72.6% of the nation’s total by weight, according to American Trucking Associations, the industry’s largest trade organization. That same year, more than 3.5 million Americans worked as truck drivers, while another 8.4 million people were employed in jobs related to trucking activity, the trade group added.
Surprisingly, the business of moving goods from one place to another is marked by inefficiencies, confusion, archaic practices and a paucity of technological innovation.
Manufacturers, retailers and logistics companies all-too-often overpay to have their goods shipped. That’s because they have great difficulty keeping track of and thoroughly reviewing the myriad of invoices and other documents submitted to them by trucking companies, often in the form handwritten notes, PDFs and Excel spreadsheets for such things as fuel surcharges and late pickup fees. On the trucking side, it can take weeks for freight companies to receive payment because of invoice disputes, often forcing them to take out high-interest loans to cover expenses.
In this scenario, American consumers also lose. That’s because manufacturers typically hike prices to cover their higher transportation costs. Experts estimate that the producers of cars, clothes, washing machines and other goods overpay by as much as 2% to ship their wares by truck.
Rationalizing logistics payments
Matthew McKinney, B.S. ISE ’13, believes there is a better way. McKinney is the co-founder and chief executive of Chicago-based Loop, a company that, in his words, “aims to unlock profit trapped in the supply chain” by removing friction in logistics payment to increase liquidity for every stakeholder.”
Loop, which also has offices in San Francisco, leverages proprietary artificial intelligence to help logistics businesses digitize shipment data. That makes it possible to quickly resolve any disputes that arise between manufacturers and trucking firms when invoices are higher than agreed upon contracts due to additional charges. At present, Loop data shows that up to 20% of invoices have some sort of error.
“Our generative AI unifies all this unstructured data so you get a single representative view of the shipment and costs for both sides, with everything cleaned up and normalized in real time,” he said. “If everyone’s on Loop, then you remove all this paperwork and reconciliation hell because now everyone has the same source of truth.”
With Loop, McKinney added, manufacturers can easily scrutinize all invoice and associated charges to make sure they don’t pay too much. These insights help them “right size” their shipping network by identifying the most efficient and cost-effective trucking companies. On the trucking side, freight firms benefit because they get paid on time or even early. This means they have more cash on hand and no longer must borrow money to cover operating costs arising from invoice disputes.
Additionally, Loop’s workflow automation means that manufacturers and trucking companies no longer need people performing tedious, error prone tasks. Instead, they can refocus their workforce on high-value strategic work. Said Jeff Toman, a finance executive at Loop’s customer Great Dane: “Loop has turned my team from processors to analysts.”
High-profile customers and investors
That vision has won three-year-old Loop some high-profile customers and investors.
Clients include Gillig Busses, the largest manufacturer of transit busses in North America; Alliance Rubber Company, the biggest American maker of rubber bands; Primo, the leading global manufacturer of customized plastic extrusion solutions for energy, transport, and industry sectors; and Great Dane, a trucking equipment manufacturer.
Said Chuck O’Brien, Gillig’s VP of aftermarket parts: “Loop transformed the way we do business, enabling us to capture data and utilize it for better insights on decision-making from how we allocate transportation spend to negotiating carrier contracts. They identified 6% in transportation savings for us.” –
Luke Sikora, managing director and partner at J.P. Morgan Growth Equity Partners (Photo/Courtesy of Luke Sikora)
Loop has raised $65 million to date, including a recent $35-million round led by J.P. Morgan Growth Equity Partners, and Index Ventures. McKinney said his 65-person firm plans to use the money for sales and marketing, research and development, and to expand internationally in 2025. “We’re focused on growing the business,” he said.
Luke Sikora, managing director and partner at J.P. Morgan Growth Equity Partners, said the quality of Loop’s leadership, engineering team and technology make it a good bet to flourish.
“Loop built their platform from the ground up using artificial intelligence, and this is the first time in the market that someone has taken the right approach to automate and correctly audit all the invoices being received,” he said. “Loop can really improve the way that all parties within transportation and logistics operate together today.”
Added Damir Becirovic, a partner at Index Ventures: “I think Matt is a special founder in the making. He has incredible tenacity, the ability to energize people and partners who work with him, and tremendous clarity on the problem he is tackling and how it can be solved,” said Becirovic, adding that he thinks Loop could eventually become a $1 billion company.
The vaunted Trojan network also appears to have helped Loop.
As a 2006 USC Marshall School of Business double major in finance and accounting, Sikora said McKinney’s USC pedigree gives him extra faith in Loop. Similarly, Becirovic, a 2013 USC Marshall graduate who encouraged Index Venture to invest in Loop, roomed with McKinney in their senior year at Troy.
Damir Becirovic, a partner at Index Ventures, roomed with Matt McKinney their senior year at USC (Photo/Courtesy of Damir Becirovic)
Said McKinney: “The Trojan family grows, grows every year in value, and it also runs very deep.”
Supply chain nirvana
McKinney’s initial exposure to supply chain management came at USC, where he took several courses on the subject from Maged Dessouky, USC Viterbi Dean’s Professor of Industrial and Systems Engineering. McKinney’s academic efforts and intellect made an indelible impression on his favorite professor.
“There are some students a professor never forgets,” Dessouky said. “Matt had a deep passion to learn and understand the fundamentals, and it was clear to me that someday he would be developing his own product based on AI and computational algorithms to address an important problem at the intersection of supply chain and finance.”
McKinney credits Dessouky and his time at USC Viterbi for equipping him with the tools to succeed. “USC prepared me to be a leader, to be a thinker, and to be an entrepreneur that goes out and solves the world’s problems,” he said.
The idea for Loop came to McKinney and co-founder Shaosu Liu when they both worked at the freight unit of ride-sharing company Uber Technologies. The pair noticed that Uber constantly dealt with billing issues. That prompted them to leave corporate American to venture out on their own.
Looking forward, McKinney said he’s upbeat about Loop’s future. Because of the supply chain snafus during the Covid-19 pandemic and increasingly strained U.S.-China relations, many companies are onshoring, or moving production to America from overseas. That trend, he said, should only increase demand for Loop’s high-tech solutions.
“I love what I do. I get to understand new supply chains. I get to see the macro trends at a global level that are happening. And I get to work with companies that contribute to a better economy for America,” he said. “I mean, there’s nothing more fun than that.”
Published on April 11th, 2024
Last updated on April 11th, 2024
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