Disrupting the transport industry – South African startups take aim

Finding a reliable carrier or transporter can be a daunting prospect. Especially for SMEs (small and medium-sized enterprises) or individuals not accustomed to the transport industry. Traditionally, transporters were armed with a phone and fax, with email arriving much later. Calling and mailing transporters for quotes take time and resources, especially where speed is of essence. Not to mention the complexity around insurance.

Rates can vary substantially and are determined by pick-up, destination, weight and class. Identifying the best offer is difficult for even the most seasoned operator. For fleet owners connecting with potential customers remains a challenge. Especially for smaller transporters with a limited marketing budget it is difficult to identify and secure new business. Transporters also have to deal with Less-Than-Truckload (LTL), that could contain half a full load, a single pallet, or even a single box or case. Trading excess space is challenging, as shippers and transporters aren’t always aware of opportunities. transportation For customers working with transporters, LTL is often given a lower priority, as transporters try to increase truck productivity and reduce costs.  Some companies might also handle LTL only on certain types of shipments and some transporters avoid it all together. However Two South African startups, Bidship and eShip aim to reduce the pain points and create marketplaces that connects shippers and transporters through reverse auctions. In a reverse auction, the transporter competes to obtain the business from the shipper and prices will typically decrease as transporters underbid each other. Customers can review quotes, evaluate customer reviews, and make the booking online.

Customers are provided with tracking details via email or mobile app. eShip targets customer-to-business (C2B) with Bidship focusing on the business-to-business (B2B) segment. For companies and individuals that don’t have access to transportation management systems (TMS) to compare carrier rates, a reverse-auction marketplace provides a real option. Internationally, companies such as Cargomatic, UberCARGO, and Uship have been leveraging the fundamentals of social networks and crowdsourcing for transportation for a while. However, the biggest focus has been individuals and smaller customers in the LTL segment.

For large companies, relationships with carriers have always been the cornerstones of any long term partnership. It will be interesting to see, to what extend the new transportation marketplaces could disrupt traditional players. However, many companies are over-reliant on one transporter and online marketplaces allow companies to create a pool of carriers to reduce supply chain risk. There is increased recognition that an efficient supply chain can provide a considerable competitive advantage for a company, and technology will play a more dominant role in this.