Uber, the ride-sharing platform that has disrupted the taxi industry, has inspired a thousand new business ideas and the ambition to “Uber-ize” just about everything. Cargomatic has latched onto this idea and raised $2.6 million to do exactly that for, of all industries, trucking. They will connect people who have cargo to move with truck drivers who have the spare capacity to move it. How will this disrupt traditional fleet companies?
Branding itself as the “Uber for local trucking,” Cargomatic’s plan is to connect truck drivers with availability and capacity with businesses that have a lot of freight to move in a short amount of time.
According to company Chief Executive Jonathan Kessler, 80 percent of urban deliveries are made by small trucking companies and they are completed in a very inefficient way.
Kessler described Cargomatic as a cloud-based app that allows shippers to post and offer loads on a first-come basis to drivers within a 10 to 20 mile radius. Cargomatic handles proof of delivery, invoicing and payments, Kessler said to Fleet Owner. Additionally, there is no direct fee for either the shipper or carrier. However, pricing is not based on real-time demand – an Uber trait. Instead, the company determines what it deems a fair price for carriers plus a 20 percent markup
“We address this [industry’s] fragmentation by bringing the sharing economy to business-to-business logistics,” Kessler said in a recent interview. “Cargomatic aggregates these small companies under one platform. It’s a completely underserved market that we are now ready and excited to serve.”
Cargomatic has been in beta since January but has already completed thousands of shipments with hundreds of trucks that now use the platform every day.
Additionally, Kessler said that Cargomatic runs over 100 deliveries per day, and the average driver hauls more than 1,000 pounds of freight at a time. The average shipper pays about $120 per ticket, Kessler explained.
At the end of last month, Cargomatic raised $2.6 million in early stage funding. Sherpa Ventures was one of the firms that donated in that found. Company founder Shervin Pishevar backed Cargomatic because of the founding team’s long history building successful tech startups and its domain expertise in logistics. Pishevar added that trucking is a highly fragmented market and the sector could benefit from a “unifying” mobile app like Cargomatic.
So far, Cargomatic is running in Southern California, with operations centralized in Los Angeles. However, coverage extends to Santa Barbara County, San Diego County and San Bernardino County. Company executives reported that they plan to expand the service to the East Coast within the next few months.
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