The January 2016-founded startup has developed an algorithm to utilize trucking capacity more efficiently. This way, volumes can be optimized, costs reduced, and greenhouse gas emissions lowered, states the company. Meanwhile, the Hamburg, Germany-based logistics innovator manages the movement of thousands of trucks.
Old school trucking was yesterday. With Cargonexx appearing on the scene, the truck business is undergoing a profound transformation, abandoning beaten tracks, venturing off to new shores. Or
else, how could be explained that more than 3,700 transport companies operating 60,000 trucks have already registered with Cargonexx, one might ask.
With the startup’s appearance, artificial intelligence penetrates the trucking market rather sooner than later, offering partnering companies a digital platform for allocating their transport capacities more efficiently compared to traditional habits. Their proven technology automates tedious processes and optimizes truck runs, evidenced by an average quality rate of 99 percent, applying for all orders placed, states their founder and CEO Rolf-Dieter Lafrenz. In Germany alone, about 3,700 registered road hauliers are collaborating with Cargonexx, making the capacity of no less than 60,000 trucks available to multi parties for digitalized freight booking via the service provider’s site.
The deal is done at the speed of light
The business process is quite easy: The only thing the registered partners, like forwarding agents, shippers or airlines, have to do in case they request a transport and quote, is to feed the Cargonexx-provided, cloud-based software with their specific loads and the desired route. Once done, Cargonexx takes over the role as liable forwarder and matches the shipment request with other transports booked already in its network and starts pooling loads. Simultaneously, the system calculates the market price for each tour, visible within seconds on the user’s screen. Finally, a mouse click suffices to accept or reject the proposal.
In its role as contractual partner, Cargonexx pays the calculated transport price within five days, withholding an agreed margin, Herr Lafrenz assured CargoForwarder Global in an exclusive meeting. “We purchase market capacity and manage the pick-up and flow of goods entirely from beginning to end,” he tells.
Looking into the future
After the company’s promising start, the team of currently 28 staff is working on extending the firm’s reach, spanning the network all across Europe. The risk seems to be manageable. Thanks to a self-adapting algorithm the tours can be fine-tuned day after day, increasing the load factor constantly, avoiding empty runs thus benefitting the customer and the environment thanks to less greenhouse gas emissions. Based on the growing stream of inflowing data and their being matched with existing statistics, “we will even be able to forecast truck loads on many routes,” announces the manager. This accounts particularly for daily system traffic – say, between Hamburg and Frankfurt or Dusseldorf and Munich. “The driver receives his information via smartphone or tablet where to pick up shipments next while being on the road,” says Mr Lafrenz.
Quintupling cargo volumes
The electronically controlled system, based on high-performance data transfers and real-time message streaming, steers the entire capacity provided by trucking companies. “Our partners only provide their vehicles; the rest we take care of thanks to our self-learning algorithm and our platform that allows us to automate and smartly manage the trucking business from A to Z,” Herr Lafrenz states. He expects the shipment volume booked by customers to quintuple this year, making it necessary “to double our staff in 2018.” Not an unrealistic aim, it seems, given the fact that, statistically, one out of three trucks traveling on German autobahn is empty.
However, a major problem cannot be solved by Cargonexx’s smart IT-tool: the lack of drivers. Currently, German trucking companies are short of 40,000 drivers. And the situation is deteriorating because 500,000 will retire within the next decade. Due to the high employment rate in Germany, low pay and unattractive working conditions truckers are facing, the retirees can only be replaced by drivers coming from eastern Europe, particularly Poles, Ukrainians or Belarusians – if at all!