Startups target inefficiencies of freight and last mile delivery

Much like Uber and other startups looking to disrupt entrenched markets, last-mile B2B delivery solutions provider Shippify started as an illegal business three years ago.

“Brazil’s postal service sent us a cease and desist letter because we were violating their monopoly,” says CEO and co-founder Miguel Torres. “It turned into great publicity for us!”

Shippify – which has since expanded operations to Chile, Ecuador and Mexico, and is targeting Colombia and Peru in 2020 – is one of a slew of digital platforms offering solutions such as cargo consolidation and fleet tracking software to target inefficiencies in Latin America's freight and shipping services sector.

The platform crowd-sources its fleet of drivers, who work on a commission-based system similar to Uber's, delivering shipments of up to 20kg for retailers like Falabella and e-commerce platforms such as MercadoLibre. Some clients have their own fleet and turn to Shippify's software as a service.

"B2B is not just consolidating boxes to make a delivery; other important factors are routing and density," says Torres, who has received funding from Mena Venture Investments and 1776, among other funds. "We offer an elastic SaaS solution: you can use our fleet of drivers during high season, or use our same SaaS tech to track your own fleet."  

Source: shippify.co

T-CARGO

T-Cargo is a different type of startup focusing on the South American freight segment, and particularly on cross-border cargo of at least 4 tonnes and usually more than 20t. 

Launched last year in Argentina and recently in Chile with funding from Mendoza-based Grupo Altasur, it offers a bidding marketplace for companies and freight providers to come together.

"Trucks return empty in 54% of deliveries in Chile. Shipping cargo from Santiago to Arica costs about 2mn pesos [US$2,800], but by consolidating the cargo through our platform you can lower it to 1.3mn," says chief digital officer Matías León Feldman. 

T-Cargo – which charges freight providers a 7% commission and expects to break even in the second half of 2020 – hopes to eventually expand its presence to Brazil, Peru and Bolivia to cover the bioceanic freight corridor, as the platform includes customs forms and other functionalities designed specifically for cross-border shipments.

León Feldman says that while Uber and new startups are increasingly moving into the freight space, the market is big enough for multiple players. He foresees freight customers and providers using different platforms simultaneously or depending on the need, much like commuters with ride-hailing apps.  

"Chile has nearly 4mn trips per year. The country spends US$12bn to US$15bn in freight services per year; Brazil spends US$160bn... Argentina, US$23bn," he says.

"If in five years all of us competitors obtain 10% of the market, that is extaordinary, plus the benefits to society and the economy." 

Source: T-Cargo