Transportation accounts for around 23% of global greenhouse gas emissions, of which 72% is inland transport, and of that, 69% is from road vehicles. Given that an empty or unloaded truck produces more emissions than all international flights combined, increasing efficiency in an industry still dominated by manual labor could help reduce many of those emissions. That's part of the reason Belgium-based startup Qargo has raised £11 million ($14 million) in a Series A round led by Balderton Capital.
The logistics industry is facing rising operational costs, pressure to decarbonise, soaring fuel prices and cyber attacks, making it a difficult time for companies in the sector. In the UK alone, a number of transport companies have gone bankrupt. There is clear pressure to digitise the industry in order to realise cost savings.
The transportation industry uses legacy software platforms such as Mcleod Software, Rose Rocket, and Dash Doc, but many of these platforms date back to an earlier era.
Qargo hopes its new technology will help it leapfrog competitors in this area.
Founded in 2020 by Adriaan Coppens (CEO), Jori de Turk (CTO) and Sander de Wilde (Head of Engineering), Qargo’s solutions integrate with customers’ systems and the company claims they can process orders up to 10 times faster than traditional tools. They can auto-import PDFs, automate address searches and combine truck loads into more optimal itineraries to reduce distances, minimize empty loads and cut carbon emissions.
“Most of the big logistics companies use traditional transportation management systems – basically big databases that require a lot of manual data entry. Our system has more integrations, AI and planning optimization and basically does the same thing but much faster and more efficiently,” Coppens said.
“Logistics is an old industry where environmental considerations are not very important. Trucking is a very inefficient and polluting sector and one of the last frontiers where software has not yet penetrated well. Companies' planning is mostly done on paper or in Excel sheets.”
Qargo claims that UK-based Anglia Freight has used its platform to save more than 200,000 miles per year and achieve more than 20 minutes of route optimization per vehicle per day.
Coppens feels that customers like Qargo because it's an operational system: “So if we went out of business, which some of our customers are concerned about, they'd be in big trouble because we do the planning and the invoicing. Hopefully this funding announcement gives them more confidence. We're not just a startup that comes and goes, we're a company that's here to stay.”
The transportation management software market is expected to grow to $19.1 billion by 2032, according to market research firm Fact.MR.
“Logistics is a $5 trillion market globally but it is often overlooked by software companies, with most companies in the sector still using hugely outdated software that doesn't meet their needs and still managing via whiteboards and telephones,” Rob Moffat, partner at Balderton Capital, said in a statement.