B.C. technology company Switchboard connects the logistics dots

Vancouver startup supports trucking compliance and freight matching

Switchboard co-founders Sagar Malhi (left) and Michael Ip in downtown offices they will soon move out of to make more room for their growing startup | Chung Chow

Sagar Malhi pulls out his phone and calls up a map of North America, covered in 7,200 pink dots. They speckle the continent, streak down the West Coast and cluster around cities like Chicago.

Each circle represents a truck fitted with one of Vancouver-based Switchboard’s electronic logging devices (ELDs).

“We bet huge on ELDs,” said Michael Ip, who co-founded the now nine-person startup with Malhi.

“This ELD was a big boon because this U.S. government mandate forced pretty much 20 million trucks to adopt this new technology. That’s crazy.”

After years of discussion, the U.S. government announced in 2017 that truck drivers would be required to log their hours on the road with ELDs, a measure to help ensure compliance with limits on time spent driving.

In December of that year, Ip said, Switchboard saw 20,000% sales growth as fleet owners and trucking companies were forced to adopt technology to replace a problematic pencil-and-paper logging system that could all too easily be cheated.

ELDs or grandfathered automatic on-board recording devices were required as of April 1, 2018. At the end of this year, all carriers will be required to have ELDs.

It has not been a smooth transition, and that is something Canada is learning from.

“One of the lessons learned is in the United States, ELD manufacturers self-certify their product. What’s happened is there’s a proliferation of manufacturers that have made ELDs that are editable,” said Dave Earle, president and CEO of the BC Trucking Association (BCTA).

“What you’ve done is gone from a logbook that can be mucked about with to an electronic logging device that can be mucked about with.”

Canada is in the process of designing its own ELD mandate. While the implementation date is still unknown, Earle is expecting a deadline for mandatory compliance to land early in 2021. He expects regulations to be enacted before the end of June 2019.

Anecdotally, Earle said, around 60% of the BCTA’s members already have ELDs installed in their fleets, either because they run shipments north to south or because they recognize the devices will be a Canadian requirement in the future.

By contrast, no members of the Northern BC Truckers’ Association take trips south. Operations manager Dennis Felhauer said it is still unclear whether the rules – which he says are primarily driven by the needs of highway haulers – will apply to all kinds of trucking. It is also unclear what kinds of ELDs will be allowed.

“A one-size-fits-all doesn’t work, for sure,” he said.

Despite remaining uncertainty, the idea behind such regulations has broad industry support, and for many companies in Canada, it has been a long time coming.

“We’re already well along the path with ELDs,” said David Zavitz, chief administrative officer at Canada Cartage, the country’s largest supplier of outsourced fleet services.

The devices have been installed on the company’s cross-border and interprovincial trucks.

“We will have the rest of our fleet completely ELDed this year,” Zavitz said. “So well in advance of when it becomes mandatory.”

While ELDs remain a focus for Switchboard, Ip said the devices are a “Trojan Horse” of sorts; an entry point to a much bigger idea.

“The big goal right now is to actually leverage the data from the devices to power freight matching,” he explained. “It’s not an electronic logging device. Now, it’s a fleet management service.”

Switchboard launched that management platform expansion in December. The company says it can offer freight brokering much more efficiently by disrupting the third-party brokering process. Clients looking for trucking capacity would still call or email Switchboard – like they would a broker – but finding an available truck in the right location would be an automatic process powered by the company’s platform.

It’s a space that has the attention of Uber, which launched Uber Freight in May 2017. With an app that connects carriers and shippers, the company generated more than US$125 million in revenue in the fourth quarter of 2018. Since its launch, it has contracted with more than 36,000 carriers and served more than 1,000 shippers.

Switchboard recently returned to Vancouver from three months at Y Combinator, the California-based accelerator known for having supported companies such as Airbnb, Reddit and Dropbox.

“I think the biggest take-away was ‘Aim really big, and be confident that you can do that,’” Malhi said.

“At the end of the day, if you have a trucking company, we want you to come to Switchboard to run your company.”