Here’s How Cargomatic, an On-Demand Shipping Platform, Became so Successful- Startup Story #33

Cargomatic has become a famous name in the shipping industry as it instantly connects shippers with licensed carriers owning a truck to process shipments. In the era of On-Demand platforms, Cargomatic has come out to be a big success as it has not just secured funding amounting to $11 Million (till Dec 2015) but has also expanded in 3 major cities of the US i.e. – New York, Los Angeles and San Francisco.

Cargomatic was founded by Jonathan Kessler (CEO), Brett Parker (President) and Martin Hendleman (Director of Engineering). We interviewed Kessler in order to know how they pushed their on-demand startup to be successful. We asked him some questions related to technology and the marketing strategies used by the company to gain traction. Here’s what he had to say:

Q) Starting an on-demand local shipping platform is definitely a great idea. Tell us a little about Cargomatic and your personal motivation for starting this service?

We started Cargomatic to help small truckers grow their businesses while bringing more efficiency and transparency to the local trucking market. Many of the methods still used in local trucking are antiquated and time-consuming. Cargomatic leverages the advantages of mobile devices and cloud-based technology to connect businesses that need to ship goods locally with truckers who are nearby and have available capacity on their trucks. It’s a win-win scenario for both parties.

Q) Can you give us a rundown of how it works?

B2B shippers go to our web portal and type in their shipment details. Nearby truckers using the Cargomatic smartphone app can view available jobs and choose which ones they want to accept. There is no charge for shippers or truckers to use our service. But when we do connect the two parties and provide business for them, we take a percentage of that.

Q) What is the value proposition you are offering to the customers?

Shippers benefit from using Cargomatic because they are able to get instant access to trusted drivers in their area. They are able to track the movement of their goods in real-time and get status updates sent to their email or phone. No paperwork is involved. All documentation and payment is handled digitally. Truckers benefit from Cargomatic because it helps them keep their trucks full. Instead of driving around with a half-empty truck, they can increase their yield and make more money. The environment benefits, too: more efficient driving routes mean less fuel consumption and less traffic congestion.

Q) You are present in CA as of now. Do you plan to launch services in new regions? If yes, what would be your strategy?

We are a Los Angeles-based company and have been serving the Southern California market since early 2014, including the Ports of Los Angeles and Long Beach, which handle nearly 40 percent of U.S. imports. Our service was so well received in Southern California that customers were asking us to expand to the east coast. Naturally, that meant New York. In August 2015, we launched service in the greater New York City metro region and now handle shipments in New York, New Jersey, Connecticut and Pennsylvania. In December 2015, we expanded service to the San Francisco Bay Area, which was an obvious place to be as it is the home of technological innovation, as well as one of the largest transportation hubs in the U.S. We’ll certainly be expanding service to others cities in the future, too.

Q) Could you shed some light on the technology and tools used to build Cargomatic?

We’re managing the state of thousands of concurrent objects, logging events at every transition.  Since drivers depend on our platform for their livelihoods, and businesses depend on our service for the delivery of time-sensitive freight, our Service Level Agreement has to be world-class.  Managing real-world state changes asynchronously is a real challenge.  That’s why we’ve embraced functional reactive programming. Scala, Akka, and react.js lend themselves particularly well to this problem space.

Q) What is one particular Marketing Tool or process which you swear by, that has helped you gain more users on the service?

The product itself is our best marketing tool. Our shippers and carriers love us, and they’ve helped spread the word. We’ve also gotten a lot of media coverage.

Q) What is your onboarding process for shipping partners (drivers), if any? Are they on a contractual basis or full-time basis?

We provide educational materials for all our drivers, teaching them how to navigate the Cargomatic app on their smartphones. Many drivers are tech-savvy and understand the app quickly while others require a bit more help. But they all love it as it empowers their small businesses to grow. Cargomatic drivers are not on contract; they are free to use the platform whenever they want.

Q) What is Cargomatic’s biggest achievement to date? How did you go about accomplishing this?

We work with hundreds of different shippers and truckers on both the east and west coasts of the U.S. Over the past two years, Cargomatic has helped expedited tens of thousands of shipments for customers in Southern and Northern California and the greater New York metro region.

Q) Where do you see Cargomatic in five years?

We plan to continue to improve and expand our service in the markets we currently serve while seeking out opportunities for expansion in other markets in the U.S. and internationally.

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