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Tech Startups Add to Wave of App-Based Freight Services

He predicted that these firms will carve out a niche in the industry and could push brokers to ramp up their technology investments, but won’t displace them.

Earlier this year, at the Transportation Research Board’s annual meeting in Washington, technology executives and researchers said the emergence of Uber-like services to arrange on-demand freight shipments could lead to more efficient supply chains.

Cargomatic, for example, is working to streamline shorthaul freight transportation, which is “inherently a very inefficient market,” Dan Harman, general manager of East Coast operations, told TRB.

The company’s app-based platform, which connects shippers with local truckers who have available capacity, launched in 2014 in Los Angeles and now is available in the New York and San Francisco metropolitan areas as well.

“As with any startup, we’re here to solve a pain point,” Harman said. “On the demand side, the challenge for shippers is broad. Sometimes it can be very difficult to actually find capacity, especially if it’s a good that you’re not moving frequently.”

At the same time, small trucking companies and owner-operators are under financial pressure to find backhauls whenever possible to minimize deadhead miles.

“If you’re on Cargomatic, you can pull up the app and see if there’s any freight available on the way to your next job or heading back to your warehouse. If it fits on your truck and the payout is appropriate for you, you can select it and fill out that excess capacity,” Harman said.

In recent months Cargomatic laid off part of its workforce — reportedly about half of its employees — but also hired two logistics industry veterans to boost its sales efforts and cited continued growth of its platform.

At TRB, Jennifer Pazour, an industrial and systems engineering professor at Rensselaer Polytechnic Institute in Troy, New York, agreed that these types of on- demand logistics services can improve asset utilization and flexibility.

“What this on-demand economy allows us to do is tap into those unused resources and use them very efficiently,” she said.

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By Seth Clevenger
Technology Editor

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