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 looks at startups like Convoy and Uber Freight and how they’re adding value to a booming industry due to eCommerce success.
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, pretty, in the same way, the company’s ride-hailing app pairs drivers with those looking for a ride. It is a part of Uber’s “other bets,” like 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 like booking freight delivery using the app, access to transparent pricing and quick payments, tracking the delivery process from the moment of loading to delivery, and submission of PODs (POD – 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 like 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 the big businesses have been enjoying the benefits of these apps, anyone can create their own application like uber for trucking and this is exciting for all innovators and entrepreneurs.
The company launched its app in 2015 when smartphones just started to be widespread among truck drivers. Co-founders of Seattle-based Convoy are Dan Lewis and Grant Goodale, both former Amazon employees, who handled a massive logistics task.
During these 5 years, Convoy raised $265 million and reached a valuation of more than $1 billion. Business is interesting for these well-known investors like CapitalG, the venture arm of Google parent company, Alphabet, Bono, Bill Gates, Jeff Bezos, Salesforce.com CEO Marc Benioff and
Expedia chairman Barry Diller.
The main aim of this startup is to bring efficiency to the supply chain industry. There are 2 ways to achieve this goal. First, they reduce the number of empty trails trips currently 40% of the USA’s highway miles. Second, they try 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, among them) better tracking and pricing data. The app also offers free access to all available loads, payment with Convoy QuickPay™ without fees, upload of documents 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 by using data-driven software to better match up shippers and truckers, they can save time, money and CO2 output.
An Indian startup founded in 2015, BlackBuck is trying to overcome a big inefficiency problem in India’s trucking system. Truck drivers often struggle to find any work on their way back from the unloading point. BlackBuck helps them to 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 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 issues management.
Today, BlackBuck is the largest trucking network in India, and the company’s technology platforms deliver reliability, efficiency and seamless experience for shippers and truck drivers. And that is not all, in 2019, BlackBuck has entered the European market and operates in Germany, Poland, France, Denmark and other countries.
BlackBuck has over 30000 shippers and forwarders that provide over 5000 shipments a day to about 10000 clients like Unilever, Nestle, Mondelez, P&G, Colgate, and Samsung, Reckitt Benckiser, Coca-Cola and others.
As the country with the largest population and developing production system, China is also trying to be on the top of all newest technologies and logistics know-how. 75% of all commercial cargos in China are done by local companies. To minimize fuel costs and increase efficiency, some companies have also started to use on-demand trucking technologies.
Huochebang, founded in 2008, is the largest trucking company in China with 6 thousand employees and a network of 5.2 million drivers. The cloud-based logistics platform helped decrease the fuel costs and carbon emissions by matching the supply and demand at needed time and place. Thanks to O2O (Online-to-Offline) truck freight platform company provides integrated services to both shippers and truck owners in real-time.
The startup’s revenue model is pretty unique, as the company doesn’t take any fee for essential matching services. Huochebang earns money by offering additional services, starting from loans and insurance for its truckers to selling auto parts and second-hand trucks. Huochebang also 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 the trucker on punctuality, services, reliability, prices etc.
In this way, drivers are motivated to provide a better quality of their services for higher ratings, leading to a higher possibility of getting the next order and more clients. It is essential for individuals who own trucks (90% of freight trucks in China are owned by individuals) and don’t have many clients and orders.
Using this platform, they can avoid downtimes, empty return freights and overconsumption of fuel (as the app finds more fuel-efficient routes).
Huochebang has achieved huge 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 that valued the startup currently at over $1 billion.
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 are running empty. So such a startup as CargoX, even with no assets, can get benefits matching the shippers and the truck drivers.
CargoX was founded in 2013 by Federico Vega. Headquarter is located in San Paulo, Brazil. The business is so attractive that even Uber co-founder Oscar Salazary became one of the investors.
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, has access to track in real-time his shipment.
In 2013, they launched only web-site as most truck drivers had no emails or anything related to the internet. But with the appearance of free phone calls in WhatsApp and increasing smartphone usage, CargoX decided to invest in the on-demand trucking app. And the percentage of truck drivers using the application was higher than those who used 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 in a secured manner.
The pandemic also influences the additional functions of the app. Due to the country’s pandemic restrictions, CargoX inserted a tracking for snack bars and stops for truck drivers that were in operation on the platform. That shows that the company is flexible and ready to develop themselves 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 to take on their return trip. But there are already stable clients who get all their freight from the company.
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 a lot of room for improvement and development. For example, the smaller markets and companies which lack the new technologies are not getting rewards from having on-demand apps.
Maybe it’s as straightforward as just add some specific features to stand out from competitors, and who knows, maybe your App will be the next Uber?