“Without freight rail, many US industries would literally shut down…we spared the country that catastrophe,” President Biden proclaimed Friday as he signed legislation to avoid a rail workers strike that had been brewing for months. Estimates suggested a strike would have cost the US as much as $2B per day, and removed a shocking 1% of US GDP if it extended for a month. And although the work stoppage has been averted in the short term, the critical yet often overlooked role that freight rail plays in our economy has now taken center stage. While the bulk of the conversation the last 3 years has been focused on the position that maritime shipping and trucking play in our supply chain, rail represents a $100B market in North America alone.
When we first met Harris Ligon and the team from Telegraph.io last year, the phrase freight rail conjured up a mental image looking something like this:
And I hate to tell you, but it hasn’t changed all that much! On any given day, more than 40% of all goods in North America travel on a freight railroad, and yet the industry is still running on Lotus Notes, MS-DOS, and a healthy dose of good ol’ paper and phone. It is an area of our supply chain that we believe has one of the greatest opportunities for innovation, where the application of technology can automate and augment manual systems and processes to give freight rail the degree of flexibility and resiliency it, and the US supply chain, so desperately needs.
The demand for modernization is coming first and foremost from customers. More shippers than ever are looking for cheaper, efficient, and more sustainable methods of transporting their goods. (A single freight train can take as many as 800 trucks off the road and is more than 4x as fuel efficient as trucking.) But shipper expectations have risen. Modern software has transformed the trucking space. Digital brokers like Uber Freight have been growing market share, and basic tech-enabled programs from load boards to TMS’s have, together with horizontal enterprise software systems, advanced the trucking experience for shippers. Freight rail has remained woefully behind, until now.
Telegraph is the first cloud-based operating system for railroads, shippers, logistics service providers, and railcar leasing companies, providing price transparency, shipment visibility, and proactive business intelligence. Telegraph lowers the barrier for shippers and logistics companies to work with freight railroads without sacrificing the visibility, transparency, and relative ease they’ve experienced with trucking.
The company was born out of Harris’ formative experiences in two worlds. He spent close to a decade working at some of the largest railroads in operating positions, before becoming an early employee at Uber Freight where he led teams building freight marketplace software in a high growth environment. He saw firsthand both the power of rail as a pillar of the US supply chain and the increasingly sophisticated software solutions developing elsewhere in logistics that had yet to touch rail. Few others were in the position to have this insight and the experience to execute it. At Construct, we couldn’t be more excited to support Harris and team Telegraph for the past year and half as they become the central source of data truth and software operations for the industry. We are thrilled to continue to invest in Telegraph’s Series A joined by our friends at Crosslink, 8VC, Box Group, Slow Ventures, and 9Yards.
Telegraph is actively hiring for several roles, if you’re interested please reach out!