project manager Steve Schlesak, left, and capacity
sales executive Ivy Gamboa track one of their
drivers, United We Ship's Mishael Israel, who is
off to his first Cargomatic delivery in the Orange
County area on Aug. 21, 2014
who own their vehicles loathe trips with an empty truck
bed. But when Mishael Israel faced the money-sapping
bind on a recent morning, he had a solution. An Uber-style
first freight pickup awaited about 60 miles from his Los
Angeles-area home. Before leaving, he accepted a $30
pickup close by through an app called Cargomatic to
deliver some sprinkler parts. He more than paid for the
gas used for the longer-distance job without a
significant detour, he said.
is aiming to do for short-range trucking what Uber and
Lyft have done for taxi drivers: use the capabilities of
smartphones to connect drivers to freight and people
nearby that need moving. With more than $3 million
raised from Volvo’s venture capital fund and others,
the Los Angeles startup is already helping hundreds of
are boosting income per mile, and picking up bigger
profits, by slashing the time their trucks are on the
road with little to no cargo. As the trucking industry
struggles to hire enough drivers to meet demand,
maximizing the time of those on staff is essential,
experts said. Consumers could benefit from faster
delivery of online purchases and improved air quality
if, as hoped, hundreds of thousands of truck routes
become more efficient.
promises to be another example of mobile technology’s
power to squeeze out excess inventory by better matching
supply and demand. Smartphone apps like Uber and Lyft
fill up empty seats in passenger cars. OpenTable, the
restaurant reservations app that’s proved a lot faster
than calling around by phone, fills tables that might
otherwise go empty. Cargomatic wedges freight into extra
space in trucks that normally rumble past with a partial
service still must prove itself outside Los Angeles —
New York City is next — but analysts said that stodgy
transportation and logistics companies will be forced to
embrace technology over the next few years and
Cargomatic is poised as much as anyone to be a supplier.
you look at every industry out there, whether it’s
hotels, films, newspapers, the middleman is being
eliminated," said Donald Broughton, chief market
strategist at Avondale Partners. "Technology is
allowing buyers and sellers to see one another very
the case of Cargomatic, companies needing freight
shipped submit their request online. The first trucking
company that accepts with a driver in close range gets
the job. The average order is moving 1 ton of freight 20
miles for about $145. Cargomatic, which targets haulers
with a fleet of 10 or fewer trucks, charges a 20 percent
companies can be paid weeks sooner than normal because
drivers confirm delivery through the app. Dispatchers
don’t need to call drivers as often because the app
tracks their location. They also make fewer calls to
traditional freight brokers who help secure extra loads.
result is a dashboard cleared of paperwork and an ear
spared of confusion, Israel said as he edged a
six-wheeler through Los Angeles traffic on a summer
Cargomatic has found a way to do is lower my cost of
business without taking out any value," Israel
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company, UnitedWeShip, treats four or five Cargomatic
orders a day as "filler" that’s bringing him
closer to a vision for a national brand. Having started
in the delivery business as a 19-year-old on a scooter,
the 45-year-old added a seventh truck and a new
dispatcher this month.
Parker, Cargomatic’s co-founder and chief operating
officer, said smartphones have made big dreams ever more
possible in "one of the last Wild West
opportunities" to make a living.
family owns Triangle Group, a company that delivers
apparel to distribution centers of major retailers. Two
years ago, he told friend Jonathan Kessler about the
time-consuming chore of finding and vetting drivers. In
a pinch, Parker wanted a service that could connect him
to pre-verified truckers that didn’t come to mind
because they lacked marketing budgets.
an adventurer and technology tinkerer who’s gone from
being an Alaskan fisherman to building button-making
machines in Ecuador, liked the idea of adding
transparency to shipping. Cargomatic became the eighth
startup in which the car-less, Uber-reliant Kessler has
been involved — four of the companies have sold for a
sum of nearly $800 million.
truckers on Cargomatic say that it raises revenue by 15
percent to 25 percent, or about $500 to $2,500 more in
the bosses’ pocket each week.
feeling that mom-and-pop trucking shops were being
underserved by technological innovation led Volvo Group
Venture Capital to invest in Cargomatic, according to
investment director Jonas Landström.
model of connecting through the mobile app and a
marketplace they are not paying for makes a lot of
sense, and it has the possibility to add more
services," Landström said.
AC Freight Services Inc., Cargomatic has freed manager
Sarah Chavez from her desk. She recently took pizza and
gift cards to thank regular customers and made visits to
is the future," she said of apps. "I’m
second-generation truck driving, and having to fax
things and mailing things and calling, it’s so
rise in online shopping has broadened demand for
same-day shipping, and truckers will need technology to
keep pace, Chavez said.
not Cargomatic, but there will be people similar like
them," she said.
Cargomatic, shippers like Hudson Jeans can move goods
within an hour for half the cost of an overnight FedEx
or UPS delivery.
long as they keep the same business model — to fill a
hole — everybody will make money," said Daniel
Barcenas, senior vice president of operations at Hudson.
are also using Cargomatic to place orders. Where it
might cost them $100 to make a far-flung delivery for a
prized customer, they could have a nearby driver from
another company do it for $30. Truckers turning the
platform around is validation to Parker and Kessler that
their effort to build a community is working.
Delco, a trucking industry analyst at Stephens Inc.,
said the market for brokers such as Cargomatic is
growing as shippers push harder for the cheapest price
possible. As along at it can stay cheap and reliable
while expanding quickly, he said, "a system like
this could work."