FreightTech could contribute to a digital transformation in vehicle logistics, and Rochester, Michigan-based Auto Hauler Exchange (AHX) and its investors are betting on it.
The company announced Tuesday it has raised $5 million in Series A funding led by MHS Capital with participation from AHX’s seed investor, Golden Ventures, to enhance its digital marketplace, aiming to eliminate traditional brokerages’ inefficiencies in the vehicle transportation space.
Royce Neubauer, AHX’s founder and CEO, founded Service First Logistics (SFL) in 2011, initially focusing on food and produce before expanding into the automotive sector. It was in this space that Neubauer identified a fundamental flaw in the industry: an oversaturation of brokers, leading to inefficiencies, lack of transparency and unnecessary costs.
Neubauer told FreightWaves in an interview that he had observed a trend of large, asset-based trucking companies creating brokerage divisions at the time, further crowding the landscape. Even though large fleets secured major contracts, a significant portion of that freight was brokered out to smaller, independent carriers, creating unnecessary fragmentation in the market.
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“Chaos was being created by an overabundance of brokers in the space,” Neubauer explained.
Determined to address these challenges, he launched AHX in 2022 as a direct digital marketplace for vehicle logistics. His goal was simple: Remove the middleman, connect shippers and carriers directly, and leverage technology to drive efficiency between parties.
Impact of the marketplace model
AHX’s platform has grown rapidly, onboarding over 300 shippers and 3,500 carriers in its first year alone, according to Neubauer. Today, the platform drives a network of over 5,000 carriers and 350 shippers actively using its services to move vehicles.
Neubauer explained eliminating the need for traditional brokers, carriers can select shipments that best align with their routes while allowing shippers to set their own rates. This model creates a competitive, market-driven environment that benefits both parties.
By empowering carriers to choose their preferred shipments and giving shippers the autonomy to set prices, AHX seeks to boost cost savings across the industry.
“Within our marketplace, we don’t do the negotiations. That’s not our job. Our job is to create an ecosystem to let carriers and shippers to negotiate together,” Neubauer said.
The direct connection also helps carriers maximize trailer capacity, reducing deadhead miles and increasing profitability. Meanwhile, shippers gain access to a larger, more reliable pool of carriers without paying brokerage markups.
Technology makes it work
Neubauer told FreightWaves he has always been a firm believer in the power of technology to improve freight brokerage services, addressing long-standing industry challenges.
Transparency and real-time data are pivotal in vehicle logistics, and AHX incorporates live tracking, digital time stamps and automated updates to provide accurate, real-time information.
“It’s mind-boggling how little data these large shippers have on their own inventory,” he said.
These innovations can also help eliminate disputes over issues such as detention times and enhance trust among stakeholders.
The company also optimized head count – something that had to be done to keep up with AHX’s early scaling efforts.
Neubauer explained that by streamlining AHX’s operations and reducing his auto-hauling staff from 96 employees to just 30, the company simultaneously achieved 300%-400% business growth in a four-year span.
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With Series A funding secured, AHX plans to invest heavily in expanding its technology infrastructure to enhance its marketplace capabilities and launch new SaaS products aimed at improving shipper visibility.
Additionally, AHX is focused on talent acquisition, hiring top engineering and marketing talent to drive further innovation and industry adoption. Beyond logistics, AHX is exploring consumer-facing products that could redefine vehicle transportation at an even broader level.
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