'Uber of trucks' hauls big business in Los Angeles
COMPTON, Calif. — Cesar Lopez is one happy trucker.
There's congestion at the ports, shipments are tougher to come by, and his days can be quite long.
But now there's a new app that's bringing in more business. Way more business.
Lopez, who runs his own independent trucking company, started using the Cargomatic app nearly a year ago to fill space on his truck with additional shipments.
Business is up 35% since, he says. Asked to clarify, he says, "Over $100,000…no, more — $120,000."
The extra bucks are coming in handy. Big trucks cost more than $150,000 to purchase, warehouses charge to use their services and it can cost as much as $1,000 to fill up a tank before heading down the highway.
The app, from Jonathan Kessler and Brett Parker, is starting to catch on. Most of the 700 truckers working with Cargomatic are seeing $500 to $2,500 extra per shipments by working with the app, says company CEO Kessler.
"We fill space on the trucks," says Kessler. "So Instead of being 50% full, now they're 75% full."
Cargomatic, which currently operates just in southern California and New York, has been called the "Uber for truckers." Its app connects shippers with drivers looking for extra shipments to haul.
Similar to Uber's founders, Kessler and Parker are trying to use technology to change an established business (in this case, a $70 billion business) with trade associations, unions and a long-established way of doing business.
But Cargomatic isn't trying to replace established truckers and their rigs with a new set of drivers, Kessler says. "We're just trying to help them make more money."
Still, there's some pushback. Weston LaBar, the executive director of the 6,000- member Harbor Trucking Association, which serves the Los Angeles and Long Beach ports, says his members are "skeptical" of the app , and none have signed up.
"Anytime there's something new, there are people who don't understand it," Kessler says.
The founders chose trucking as a business opportunity, they say, because of the huge impact it makes on all our lives.
"Everything from the clothes on your body, furniture in your house, food in your refrigerator all comes on trucks," Kessler says. "Everything you use in your daily life will be on a truck at some point."
Cargomatic is working with companies like Williams-Sonoma, Perry Ellis and Bass Pro Shops, offering lower-priced local shipments. When a new shipment comes in, it's broadcast to Cargomatic's network of truckers, along with the warehouse address and final destination.
If the trucker is going that direction, he or she can select it in the app, and nab the job.
"You don't have to call in, 'Where's my next dispatch?'" Lopez says. "Everything's at the click of one button. If it fits for you, you take it. Then you're done with it. "
Kessler and Parker raised $11 million to get Cargomatic off the ground, and are still raising more money as they look to wider expansion in 2016.
One investor is the Volvo Group, which sold off its car business and now makes 70% of its profits from its fleet of trucks.
Jonas Landstrom, investment director for Volvo Group Venture Capital, says Cargomatic is off to a "promising start, but it's early on their journey." Volvo invested, he says, because Cargomatic has "huge possibilities in terms of efficiency gains. But they have a lot of hard work ahead of them."
Meanwhile, Lopez is happy with all things Cargomatic, except for one. He wants more business.
"I wish they had more loads," he says.