5 Fast-Growing Startups Like Uber Freight

With global consumption growth, particularly in online shopping, the logistics and transport industry struggles to keep up. However, where an opportunity exists to build a business, innovators, entrepreneurs, and startups are willing to step up and take a pivotal role.

Specifically, five fast-growing on-demand trucking startups in the logistics and transport sector are getting the attention they deserve.

5 Fast-Growing On-Demand Trucking Startups

This article examines startups like Convoy and Uber Freight and how they add value to a booming industry due to eCommerce success.

Uber Freight

Uber launched its Uber Freight trucking business in May 2017. From the USA, the company expanded to Canada and Europe. Uber Freight connects truckers with shippers like the company’s ride-hailing app, which pairs drivers with those looking for a ride. It is part of Uber’s “other bets,” like its food delivery service, Uber Eats, and its New Mobility ventures, like Jump-branded electric bikes and scooters.

Uber for trucking offers many possibilities to its users, such as booking freight delivery using an app, access to transparent pricing and quick payments, tracking the delivery process from the moment of loading to delivery, submission of PODs (proof of delivery), and fleet management. The system matches shippers to carriers intelligently and can calculate a quote based on market conditions and other factors.

Many big companies, such as LG, Procter & Gamble, Wis-Pak, Premier Packaging, etc., are already successfully using Uber’s benefits for shipments.

Making sure that our freight is moving correctly, on time, and at the right price is getting more complex just about every day.… Having an innovation partner is supercritical. We see Uber Freight as a partner who can help us get there.

— says Paul Heffernan, Vice President, Supply Chain, LG Electronics USA

It’s worth mentioning that while big businesses enjoy the benefits of these apps, anyone can create their own application, like Uber, for trucking, and this is exciting for all innovators and entrepreneurs.

Convoy

The company launched its app App2015 when smartphones became widespread among truck drivers. Seattle-based Convoy co-founders Dan Lewis and Grant Goodale, both former Amazon employees who handled a massive logistics task, are also former Amazon employees.

During these 5 years, Convoy raised $265 million and reached a more than $1 billion valuation. Business is attractive for these well-known investors like CapitalG, the venture arm of Google’s parent company, Alphabet, Bono, Bill Gates, Jeff Bezos, Salesforce.com CEO Marc Benioff, and
Expedia chairman Barry Diller.

This startup’s main aim is to bring efficiency to the supply chain industry. It has two ways to achieve this goal. First, it reduces the number of empty trail trips, which currently account for 40% of the USA’s highway miles. Second, it tries to spread the Convoy trucking services app among small firms with just three or four trucks, which make up most of the trucking industry.

Convoy helps these truckers operate more efficiently and gives its customers (GE Appliances, Home Depot, Anheuser-Busch, and Unilever) better tracking and pricing data. The app Appo offers free access to all available loads, payment with Convoy QuickPay™ without fees, document uploads electronically, etc. The company makes money by taking a percentage of each transaction on its platform.

Founders Dan Lewis and Grant Goodale are confident that using data-driven software to better match shippers and truckers can save them time, money, and CO2 output.

BlackBuck

An Indian startup founded in 2015, BlackBuck is trying to overcome a major inefficiency problem in India’s trucking system. Truck drivers often struggle to find work returning from the unloading point. BlackBuck helps them see 25% to 30% more work opportunities. The startup makes money by taking a fee between 15% and 20%.

Knowing the Indian realities, BlackBuck has developed a simple app for truck drivers, who typically aren’t avid smartphone users, to help them find work and quickly navigate to their destination using Google Maps. On the client side, businesses can use a similar app to place orders. Recently, it also tied up with insurance company Acko to secure all the trucks on its network.

BlackBuck’s matchmaking technology is similar to Uber’s for trucking and includes dynamic pricing that considers route demand and job requirements. Indian on-demand trucking apps can offer loads across Europe and India with no registration fee, payment guarantee, and always available issue management.

Today, BlackBuck is the largest trucking network in India, and the company’s technology platforms deliver reliability, efficiency, and a seamless experience for shippers and truck drivers. And that is not all. In 2019, BlackBuck entered the European market and operates in Germany, Poland, France, Denmark, and other countries.

BlackBuck has over 30000 shippers and forwarders who provide over 5,000 shipments a day to about 10,000 clients, including Unilever, Nestle, Mondelez, P&G, Colgate, Samsung, Reckitt Benckiser, Coca-Cola, and others.

Huochebang

As the country with the largest population and developing production system, China is also trying to keep up with the latest technologies and logistics know-how. 75% of all commercial cargo in China is handled by local companies. Some companies have also started using on-demand trucking technologies to minimise fuel costs and increase efficiency.

Huochebang, founded in 2008, is the largest trucking company in China, with 6,000 employees and a network of 5.2 million drivers. The cloud-based logistics platform helps decrease fuel costs and carbon emissions by matching supply and demand at the needed time and place. Thanks to its O2O (Online-to-Offline) truck freight platform, the company provides real-time integrated services to shippers and truck owners.

The startup’s revenue model is unique, as the company doesn’t charge for essential matching services. Huochebang earns money by offering additional services, from loans and insurance for its truckers to selling auto parts and second-hand trucks. Huochebang partnered with Alibaba’s cloud unit and Zhong An Online Property and Casualty Insurance, China’s first internet-only insurer.

Like Uber, the Huochebang platform has a rating system where shippers can evaluate truckers on punctuality, services, reliability, prices, etc.

In this way, drivers are motivated to provide better-quality services for higher ratings, which leads to a higher possibility of getting the following order and more clients. This is essential for individuals who own trucks (90% of freight trucks in China are owned by individuals) and don’t have many clients or orders.

Using this platform, they can avoid downtimes, empty return freights and overconsumption of fuel (as the app Appds more fuel-efficient routes).

Huochebang has achieved massive growth in the last couple of years. Big giants like Tencent Holdings, Baidu, and International Finance Corp. came as investors and companies raised about US$370 million in a financing round, which valued the startup at over $1 billion.

CargoX

Due to the fragmentation and colossal information asymmetry in the Brazilian trucking market, on-demand tracking startups have an excellent opportunity to take their place in the sun. With about 400,000 trucks in Brazil, 40% of the time, they run empty. So, a startup like CargoX, even with no assets, can get benefits matching the shippers and the truck drivers.

Federico Vega founded CargoX in 2013. The company’s headquarters is in San Paulo, Brazil. The business is so attractive that even Uber co-founder Oscar Salazar became an investor.

The company’s main idea is to offer a free market for transport, which mainly connects the cargo with the transport companies, where the shipper, for example, can track his shipment in real time.

In 2013, they launched only a website as most truck drivers had no emails or anything related to the internet. However, with the appearance of free phone calls in WhatsApp and increasing smartphone usage, CargoX decided to invest in the on-demand trucking app. The percentage of truck drivers using the application was higher than those using the website.

Later, the company also launched a shipping platform based on blockchain technology, which offers a secure and decentralized environment to shippers and freight forwarders to exchange digital documents securely.

The pandemic also influences the app’s additional functions. In response to the country’s pandemic restrictions, CargoX inserted a tracking number for snack bars and stops for truck drivers operating on the platform. That shows that the company is flexible and ready to develop itself and adapt to new conditions.

Currently, CargoX has a network of 150,000 trucks. Sometimes, truckers only contact the company if they’ve made a delivery and are looking for freight for their return trip. But stable clients already get all their freight from the company.

Summary

New startups that inspire encourage us to aspire to improve and offer more in our respective industries. Apps are the now and the future, so it’s no surprise these five startups have done well with their on-demand trucking apps.

But even in this space, there is still much room for improvement and development. For example, smaller markets and companies that lack new technologies do not reap the rewards of having on-demand apps.

Maybe it’s as straightforward as adding specific features to stand out from competitors, and who knows, maybe your app will be the next Uber – read our article on product-market fit to get started.