Launched in January, Cargomatic says it has already generated thousands of B2B shipments by connecting shippers with available truckers for local deliveries through its online service.
Paul Demery , Managing Editor, B2B E-commerce
What the online Uber ride-finding service provides to taxi hailers, Cargomatic is offering to shippers in need of a carrier in the coastal metropolitan areas of southern California.
“80% of deliveries in metropolitan markets are made by small trucking companies, and they are completed in a very inefficient way,” CEO and co-founder Jonathan Kessler says. “We address this fragmentation by bringing the sharing economy to business-to-business logistics.”
Cargomatic has built online connections with hundreds of trucks operated by small businesses in an area that includes Los Angeles and stretches from Santa Barbara County south to San Diego and east to San Bernadino County, the company says. Shippers, including manufacturers, distributors and retailers, use Cargomatic’s desktop or mobile application to enter information on what they need shipped, including weight, time and destination, to find available truckers within minutes of posting their information, Cargomatic says.
Cargomatic is handling more than 100 deliveries per day, with shippers paying an average of $120 per delivery, chief operating officer and co-founder Brett Parker says. The average trucker carries more than 1,000 pounds at a time, he adds.
Cargomatic charges carriers a commission of 20% of the fee paid by shippers, Parker says. It also reviews the reputation for service and safety of each carrier and individual trucker through in-person interviews, including inspections of vehicles and checks of online trucking databases, he adds.
Cargomatic has received $2.6 million in funding from investors, including SV Angel, Morado Venture Partners, Winklevoss Capital, Nicolas Berggruen, Justin Mateen, Scott Banister, Acequia Capital, Structure Capital and Sherpa Ventures.
Cargomatic will use those funds to continue expanding its services area and developing its software for connecting shippers and carriers, Parker says. This summer, the company plans to launch its services in one of three areas under consideration and yet to be named on the East Coast.
"As early investors in Uber and other companies in this space, Scott Stanford and I see the great potential in Cargomatic," says Shervin Pishevar of Sherpa Ventures. "Jonathan Kessler, Brett Parker and their Cargomatic team are poised to change an entire industry for the better, and we are happy to be along for the ride.”
For Kessler, Cargomatic is not the first entry into an online startup. His other ventures have included Getthere.com, a travel services site that was acquired in 2000 by Sabre Corp., and Internet communications technology company Camino Networks, which was acquired in 2006 by Internet communications company Skype, which is now part of Microsoft Corp.
Parker has been in the trucking and logistics industry for 15 years, and is a former chief marketing officer of Triangle Group, a provider of logistics services.
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