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The perfect match: how digital platforms connect truckers and freight

The perfect match: how digital platforms connect truckers and freight
All Blogs| Americas| Digital Innovation

The perfect match: how digital platforms connect truckers and freight

  • 16 September 2019

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Brazil is the third-largest trucking market in the world after China and the USA, but has historically struggled with poor road freight infrastructure and a supply-and-demand imbalance between freight and trucks.

CargoX, which has been called the Uber of Brazilian trucking, is using big data, machine learning, and the sharing economy concept to radically overhaul the country’s cargo transportation system.

CargoX has built a marketplace via mobile app that connects over 250,000 truckers with shippers moving goods around Brazil. The app reduces costs for shippers, boosts truck drivers’ income, and increases efficiency.

Since it launched three years ago, CargoX has enjoyed massive success, attracting millions of dollars of investment and swiftly dominating the Brazilian trucking market.

We spoke to founder and CEO Federico Vega about the company’s success, and about how machine learning and big data are transforming trucking.

How is CargoX using data and machine learning to improve Brazilian trucking?

We’ve been compiling and analyzing data since 2013, and more than 60% of truckers in Brazil now connect to our app on a monthly basis.

This level of market penetration provides us with an unrivaled level of data, which makes our real-time updates incredibly accurate. The richness of our data, paired with our technology, is what puts CargoX ahead of any competitor and makes our app so effective.

Our machine learning algorithms can calculate where trucks are likely to be at a certain time, solving the problem of 40% to 60% of trucks in Brazil running empty because they can’t find a load. For example, if a truck is in São Paulo now and will be in Rio de Janeiro in a few days, the algorithm can predict this and can match the truck capacity with freight that needs to be transported.

Machine learning can also help to improve safety and decrease the chances of freight theft, which is quite common in Brazil. Data on freight robberies such as location, type of freight, and time of year are used by the machine learning algorithm to calculate ways of lowering the risk.

By using data and machine learning to improve trucking safety and efficiency, we’re making a positive difference for shippers, truckers, and the wider community.

Why do truckers choose to work with CargoX?

We estimate that truckers can earn around 30% more when they work with CargoX because with other carriers they spend a lot of time traveling empty. Our business model ensures that they are always traveling with a full load, so they make more money per kilometer.

It also provides a more efficient, streamlined process for the truckers. On average, truckers in Brazil have to travel 60 kilometers to find loads. With the CargoX app, you can search for a load nearby, and then secure it and pick it up.

We also solve the problem of truckers going unpaid, by conducting credit checks and background checks on the shippers who use our platform. And once a driver has accepted and delivered a load, they’re paid by CargoX, so we guarantee their payment and take some credit risk on their behalf.

And what about the benefits that CargoX provides for shippers?

Once you open a CargoX account, you can post your freight on a web dashboard and then it gets pushed to drivers via the mobile app, along with the pricing. When a trucker accepts the load, they deliver it and get paid. 

Our dashboard enables shippers to track and analyze their loads, which is really useful when shippers are moving hundreds or even thousands of loads every month.

CargoX launched in 2016, and has been very successful in a short period of time. What has been the key to your rapid growth, and what advice would you give to other entrepreneurs?

We were in a good position to grow fast without making as many mistakes as competitors because we had the involvement of highly knowledgeable investors like Agility. CEO Tarek Sultan has  been excellent at providing advice and pointing us in the right direction. He’s also been able to make valuable introductions to everyone from financial investors to potential clients, and provided information on things we could do here in Brazil that Agility has done elsewhere in the world.

With a board of directors, advisors and investors who go beyond being sources of capital and who really understand your business, you can get ahead of the competition. We are a trucking company, but we’re also a technology company. One of our investors and directors is Oscar Salazar, co-founder and former CTO of Uber, who has the knowledge needed to run the technology side of the business. And then someone like Tarek has deep knowledge of how to run a logistics business, but also has the entrepreneurial expertise, and knows how to rapidly grow a company. And the involvement of Eddie Leshin, the former CMO of US freight marketplace Coyote Logistics, has been invaluable too.

This depth of knowledge and experience really makes a difference when you’re starting and scaling your business, and also commands more investment, as people can see that you have the involvement of people with experience and you’re more likely to thrive.

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