LONG BEACH, July 11 – Less than truckload (LTL) shipping is big business in Los Angeles, a metropolitan area that hosts the largest seaport complex in the US, a maritime industrial hub that sees the majority of the country’s containerized cargo traffic passing through, most of it carried by trucks.
Cargomatic is at the very center of that hub. Founded in 2013, the Long Beach-based firm has been targeting a specific niche: the local truck shipment moving within a 150-mile radius in major urban markets such as the Los Angeles metropolitan area, offering a technology platform that connects shippers with trucking companies that have unused capacity.
“A lacking infrastructure to move freight efficiently leads to constrained capacity – which can significantly disrupt the supply chain – impacting the entire economy,” according to Cargomatic Head of Strategy Weston LaBar.
“Cargomatic’s on-demand marketplace can handle all parts of the process of moving freight, from the port pickup to warehouse and white glove delivery,” he said.
“Using advanced data and proprietary technology, Cargomatic’s platform connects local shippers and carriers – streamlining the process and eliminating waste,” LaBar added.
An attractive business model…
It’s a business model that has attracted national attention, according to analyst Dun & Bradstreet which said in a recent report that a growing number of technology companies in the US are setting their sights on “streamlining” the local trucking industry.
“Similar to services like Amazon and Uber, new on-demand trucking services connect shippers and local truckers through smartphone apps,” D&B said.
“By eliminating broker fees and reducing carriers’ reliance on phone conversations, faxes, and emails, such services promise to reduce administrative costs for carriers and make it easier for shippers to quickly find trucks and track shipments on their smartphones,” D&B said.
That’s exactly what Cargomatic does through its “same day” LTL shipping solutions in Los Angeles and other markets where shippers weigh and measure the size of the cargo which is then posted for truckers to see on the platform. Once the shipper’s posting is accepted, the LTL trucker transports that cargo along with the consolidated loads of several shippers on a single truck, delivering goods at multiple points along the way.
From the moment a trucker collects the cargo, the shipper has full visibility via the platform, including a Track Your Shipment page and proactive notifications when the cargo has reached its destination. Proof of delivery, invoices, and other necessary documentation are all collected electronically through the Cargomatic platform.
… that surpasses older ways of doing things…
This service is in marked contrast to the traditional LTL model where shipments are unloaded at a terminal and each shipment is rated and weighed to allow customer bills to be processed. Next, the LTL cargo shipment is loaded onto outbound vehicles which contain shipments for other customers all within the same geographic area.
From there, outbound shipments are trucked to their appropriate regional terminals and unloaded. The LTL cargo shipments are sorted and placed on local vehicles to begin delivery. Each individual shipment is handled a number of times from the time it is picked up from the customer to the time it is delivered – a time-consuming and expensive procedure.
There are many LTL providers who offer this service, though a challenge for some shippers is that the time it takes to weigh, process, and sort LTL cargo can add unnecessary hours or even days to a delivery. That’s where the Cargomatic model beats the traditional approach: it saves time, saves space, saves fuel and reduces emissions by locating unused carrier capacity and consolidating cargo enroute through its platform.
… as new methods are now in demand
According Dun & Bradstreet the rapid growth of online shopping and quick delivery options is expected to change patterns of demand for trucking services. In particular, D&B said online purchases “will increase the need for LTL hauls”, along with the need for medium-duty commercial vehicles, short-haul, and last-mile transportation.
And there’s no need to think that Cargomatic’s LTL business will lessen during the current period of inflation. Indeed, according to participants at the recent SMC3 Conference held in San Diego, California, LTL shipping is likely to hold up even better than well during this inflationary period.
“You’ve got more imports coming, regardless of where the economy is right now,” said one panelist at the conference. “That’s going to impact the volume of shipments moving through LTL networks.”
“We’re seeing a lot more requests to come in with drayage solutions,” he added. “And people are diverting shipments from one warehouse to another to get it to its destination faster.” The need to deliver smaller palletized shipments rapidly over shorter lengths of haul benefits LTL, he said.
Another speaker summed up the situation even more aptly: “LTL is going to be, for the next several years, the most valuable set of letters in US transportation.”
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