Traditional Trucking Meets the 'Sharing Economy' With Miami Tech Startup Cargo42
Startup Spotlight: Through a simple-to-use app, Cargo42 provides companies an option to ship locally for a lower rate with trucks that have empty space in them. At the same time, trucking companies enjoy an additional revenue stream and maximize the trucks’ productivity.
Company Name: Cargo42
Headquarters: CIC Miami, 1951 NW Seventh Ave.
Concept: Through a simple-to-use app, Cargo42 provides companies an option to ship locally for a lower rate with trucks that have empty space in them. At the same time, carriers (local trucking companies) enjoy an additional revenue stream and maximize the trucks’ productivity.
Story: The truck-sharing economy concept came from Francine Gervazio’s professional experience in the logistics and tech industries. She frequently saw trucks driving nearly or completely empty, and her company was paying the price for that empty space. Once Gervazio came to the United States in 2015, she confirmed this was not only a problem in her home country, Brazil, but a global issue.
She decided to spin the opportunity into an actual business during her Babson College MBA program in 2015. That’s where she met Murilo Amaral and Alfredo Keri, who were essential pieces to make this happen. After having performed a pilot test in Boston, the Cargo42 team moved the operations to Miami last summer because of the big opportunities as a result of inefficiencies in this important U.S. logistics hub. The decision was also based on a competitive analysis and strategic positioning for future expansion and market growth, the founders said.
“We knew already that Miami was a very big logistics hub, but we were really impressed when we saw the numbers and said, yea, that’s where we are going,” Gervazio said.
Before attending Babson for their MBA degrees, Cargo42’s co-founders had diverse experiences and backgrounds, including logistics, supply chain and operations as well as e-commerce and marketing and sales.
"In the last four years, 20% of the small trucking businesses have closed their doors in Florida. We are changing the rules and leveling the field to get them back in the game," said Cargo42's co-founder, Murilo Amaral.
Gervazio managed new operations for Easy Taxi, a Rocket Internet company, in Southeast Asia and Latin America, after working in logistics in Brazil and Australia. Amaral founded a packaging company with 250-plus employees, which acquired 6 percent of the Brazilian market share. Keri worked in sales and marketing for multinational companies, including British American Tobacco in Latin America.
Last summer, the founders spent their summer going door to door in the South Florida territory to build their initial truck base. That was followed up with online marketing, cold calling and lots of networking at trade shows and industry events. Today, the company has 85 shipping companies and 380 carriers using the service. Its goal is to partner with a large company so it can expand much faster.
Gervazio participated in the WIN Lab, Babson’s accelerator program for female founders, in Boston, and the whole team is part of StartUP FIU’s Cohort 2 now in progress.
“With Cargo42, we are sure we can help carriers reduce their empty miles and get more customers, as they have limited resources to acquire new customers. We also support their cash flow problems, issuing payments three times faster than the industry. For shippers, we provide a lower price, increasing their tight margins. Also, our platform saves their time giving real-time quotes and online tracking even when using a small trucking company. Finally, we also play an important role to help to reduce the traffic and pollution in communities and cities, by making more effective use of the trucks,” Gervazio said.
“In the last four years, 20 percent of the small trucking businesses have closed their doors in Florida,” Amaral said “We are changing the rules and leveling the field to get them back in the game.”
Launched: July 2016.
Website: https://www.cargo42.com/
Management team: Co-founders Murilo Amaral, Francine Gervazio, Alfredo Keri.
No. of employees: Eight team members, including interns.
Financing: Self-funded.
Recent milestones: 85 shipping companies and 380 carriers are now using the Cargo42 platform.
Biggest startup challenge: Customer acquisition. The trucking industry is very traditional, and it takes time for people to accept and embrace the changes to the process they have been doing for years, Keri said. “But once they give it a shot, they immediately see the benefits.”
Next steps: Closing important strategic partnerships that could lead to exponential growth and begin the company’s geographic expansion.
Adviser’s advice: Nabil Malouli, vice president of Customer Solutions and Innovation at DHL, said Cargo42 has developed a model that can be flexible at this stage. “I have recommended to use a multi-channel approach, such as partnerships with established companies that have complementary products and solutions, and to focus on the big deals. The sales and implementation cycles of small and big deals are very similar, and you have to focus on the big deals that will truly help you grow the business.” He also recommended that the team focus strongly on Cargo42’s first customers and have them become the indirect sales team. “First customers need to have an amazing experience so they can help you grow the business much faster,” he said.
Malouli believes Miami, already a global logistics hub, has the potential to become a global hub for logistics innovation. “This is a huge opportunity and we have to keep promoting entrepreneurship in the logistics industry in Miami, as Cargo42 is doing.”
