Trucking Company Invests in Schneider Chemicals Supply Market

Terms of the investment, which would give Schneider a 12% to 13% stake in the business, were not disclosed. ChemDirect founder and chief executive Tyler Ellison, a former senior executive at Schneider, said the company expects to raise between $7 million and $12 million in the funding round at a valuation of between $30 million and $50 million.

On those financial terms, Schneider’s stake would cost between $3.6 million and $6.5 million.

This agreement gives Schneider a potential strategic expansion of its capabilities in specialized markets for bulk delivery to industrial customers. Schneider said its wholesale division, which accounts for 4% of its total business, carries most of the chemicals.

Shaleen Devgan, Schneider’s Executive Vice President, Chief Innovation and Technology Officer.

Mr Devgan said Schneider will provide trucks for shipments booked through ChemDirect and manage logistics with other companies, including using rail-truck intermodal operations.

Dean Kroc, a principal analyst at online freight marketplace DAT Solutions LLC, said he is seeing these deals more often.

“It’s about controlling more aspects of the supply chain to make sure your customers get their goods where they’re needed, when it’s needed,” Mr. Kroc said.

The move brings Schneider, which operates a fleet of about 9,000 tractors, deep into the US chemical industry, generating $486 billion annually according to the American Chemistry Council.

Mr. Ellison founded ChemDirect in 2019 with the goal of creating an online marketplace for chemical buyers and sellers, similar to e-commerce retail sites, to become part of the arena of businesses seeking to build it. Business-to-Business E-commerce Capabilities In industrial markets that often operate through established intermediaries and suppliers.

Mr. Ellison was an executive at Schneider for 12 years, and later chief executive officer of chemicals manufacturer Nova Molecular Technologies Inc.

ChemDirect says it takes about three-and-a-half days for its orders to be delivered, compared to the industry average of 12 weeks. The company gives chemical suppliers access to data about their buyers, Mr Ellison said.

The company is “really lifting that dark curtain of the supply chain and allowing manufacturers visibility to say, ‘Who’s buying, why are they buying, what else are they buying? Mr Alison said.

write to Liz Young at liz.young@wsj.com