Ask anyone who has sat in Los Angeles traffic if things move efficiently in the city and you’re bound to get a dead stare. So, it’s fitting that Cargomatic, a startup focused on improving shipping efficiency, is based and launched here. The startup, which is backed with $2.6 million in venture capital, sees Los Angeles’ inefficiency not as a problem, but as a possibility.
The opportunity Cargomatic sees is the large number of trucks that move in and around Los Angeles with less than full loads, and the large number of potential shippers who are looking for someone to move their goods around the city, but have to suffer long waits.
Cargomatic has built an app that connects the two parties. Currently available on Android, and eventually iOS, the app works as a dispatch for a network of hundreds of trucks throughout Los Angeles. Anytime a shipper in Los Angeles needs something moved they put their job on Cargomatic and nearby truckers are notified. Those truckers can accept jobs to fill in extra space and earn extra money for the effort.
“Mainly our trucks are located in places like Compton and Ontario. You know areas were there is a lot of shipping going on,” said CEO and co-founder Jonathan Kessler. “They work for us. They work for other people. They fill in. We are about un-utilized resources.”
And the speed by which loads are picked up and delivered is quite quick. “About 70 percent of the time shippers are entering in stuff and wanting it picked up within four hours,” said Kessler. “We have a very high book to completion ratio. In the high 90’s[percent of] shipments that come in get covered.”
Yet, as much as Cargomatic is about poorly used trucking capacity, it is also about poorly used time. The shipping industry has long been plagued by an archaic system of paper documents, carbon copies and faxes. Shippers and truckers spend a lot of time just trying to figure out what's going on.
“I call it the cable guy problem. You’re waiting for the cable guy, you don’t know when he’ll show up,” said Kessler. “We try to give as much transparency into the transaction as possible. That allows people to act efficiently and doesn’t require as much communication.”
For warehouses that receive and send loads 30 to 40 times per day, “it can be painful to find out where the truck is that is supposed to be picking up for you,” said Kessler. To solve that problem the Cargomatic app shows shippers where their requested truck is on a map and readies them as it approaches their warehouse.
“When the geofence is tripped we send out automatic notifications, so that the pickup location knows that the truck is going to be their shortly, and they can make sure that their warehouse is available and can act in a more efficient manner,” said Kessler.
Also, instead of wrestling with paper documents Cargomatic handles all of shipping, receiving, and invoicing documentation within the app.
“We try to make sure everything is on the system, so people aren’t chasing paper,” said Kessler. “Just like in ride-sharing, with Uber, payment processing is a pain in this business, so we are trying to solve for that as well.”
In the future, Cargomatic sees broad opportunity improving the shipping industry in other areas. Many smaller trucking companies use their app as a defacto dispatch, tracking their trucks on Cargomatic’s digital map. The company will eventually roll out new features to help assign non-Cargomatic originated shipping jobs.
Kessler sees possibilities around helping consumers move large items like desks and grocers move perishable goods too — the company sees itself enabling any shipment 60 pounds or above. With companies like Amazon, Google, Postmate and Uber all taking aim at smaller, more consumer focused deliveries, Cargomatic wants to tighten up the middle part of the supply chain, moving loads closer to places where those companies can deliver them quickly, and helping the whole system run more efficiently.
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