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Logistics startups aim to save the environment, boost efficiency

July 1, 2015

The transportation sector accounted for around 27% of total greenhouse gas emissions in the U.S. in 2013, according to figures from the EPA. One of the major factors contributing to that is the energy-intensive logistics industry, moving freight from one place to another. Now a host of new startups are attempting to make the process more efficient, increasing profits and helping to lower emissions.

One of the major players in this space is Cargomatic. The L.A.-based company is sometimes referred to as ‘Uber for truckers’, and its platform allow shippers to list jobs for truckers in the area. The truckers with spare capacity can then accept those jobs.

This approach can drastically reduce the wasted capacity in a truck, which ultimately benefits the environment. “If you go from a 20% utilization to a 60% or 70% utilization then you have less trucks on the road moving the same amount of freight,” says Cargomatic co-founder and CEO Jonathan Kessler. “We also want to give the right truck the most efficient move at the right time.”

When Kessler started the company the environmental effect was very much at the forefront of his mind. “From the very beginning there were two concepts that inspired us to start the company and one of them was the environmental impact and the other was the social impact. It’s been really inspiring to work on this project,” he explains.

Cargomatic was launched in 2014 and in January raised $8 million in funding from the likes of Canaan Partners and Volvo Group Venture. The startup is a perfect example of using existing technology to reduce emissions, without forcing huge costs on shipping companies. In fact, truckers have the opportunity to make more money, and shippers save cash through an increase in efficiency.

Other innovations in the logistics industry require more investment, but could pay dividends in the long run. In May it was announced that Nevada had cleared self-driving trucks to be tested on public roads.  The same month Daimler unveiled its ‘Inspiration Truck’ an 18-wheeled self-driving truck licensed to run on U.S. roads.  The truck requires a driver to be present as it cannot complete all maneuvers itself, but if the driver does not respond it will pull safely over to the side of the road. This technology also has the potential to make truck driving more fuel efficient.

“Autonomous trucks are expected to drive future OEM focus and usher in a new era in the trucking industry. This change will come from consumers demanding advanced technologies to help reduce operating cost, improve fuel efficiency, resolve regulatory compliance issues, enhance resource productivity, increase asset connectivity, and enhance fleet safety,” says Frost & Sullivan Automotive & Transportation Senior Industry Analyst Wallace Lau.

However, some experts have expressed concerns over the potential human impact of autonomous truck fleets. There are millions of truck drivers employed in the U.S., and they will be a lot more enthusiastic about startups such as Cargomatic which try and increase their revenue, rather than self-driving trucks which would ultimately leave them unemployed.

Enterprise logistics platforms such as Shipwire and Cloud Fulfillment also help to increase the efficiency of logistics, which in turn can help the environment. On the ambitious end of the scale, are companies such as Matternet, which offers a drone-delivery system. The startup has tested its drones in Haiti, delivering medical supplies to areas which are difficult to access, and has recently agreed to test delivering mail in Switzerland with Swiss postal service. The company’s Matternet ONE drone can transport items weighing up to 1 kilogram (2.2 pounds) over about 12 miles with one charge.

There are many exciting developments in the logistics industry which could greatly minimize the greenhouse gas emissions the sector produces, and they largely can be divided into two categories. On the one hand there are the moonshot projects with long development times and in some cases uncertain outcomes, and there are the companies using existing tech to make a difference today. The distant future of the industry may involve cleaner vehicles, airborne deliveries and autonomous trucks, but for now the bump in efficiency offered by companies such as Cargomatic are more than welcome.

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Filed Under: Enterprise, North America, Startups

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