The idea of digital freight brokerage has been around for quite a while now, with multiple startups and industry incumbents hard at work digitalizing transactions within the trucking market. However, the road freight industry is highly localized and throws up glaringly different challenges across contrasting demographics, leading companies to zero in on market-specific issues to gain relevance.
Sendengo, a Mexico-based digital freight brokerage, is doing just that via a platform that enables users to control transactions and monitor freight as it is hauled to its destination.
One key challenge in Mexico that Sendengo is addressing is freight security, as cargo thefts are more frequent there than in the U.S. market.
"The biggest differentiator for a freight brokerage firm here in Mexico is security. We create value proposals for carriers, help them use technology, and provide visibility over the best routes to prevent cargo theft," Marco Reyes, COO of Sendengo, told FreightWaves.
Reaching that point has been a learning process for the company. When Sendengo was founded in 2016, the platform was live only for a brief period, closing down within three months, owing to an imbalance in the number of published loads and the carriers on the platform.
"We weren't able to match loads and carriers in the way we expected. We spoke with carriers on the platform over the disconnect. While doing those iterations on what will work, we ran into Unilever, and that has helped us bring more traction to the community of shippers and carriers," said Alejandro Garcia, CEO of Sendengo. Being a massive consumer goods company, Unilever ships enough volumes to create a balance with the carriers present on Sendengo's platform.
Moving digitalization forward in the Mexican trucking industry also was a top priority. Reyes explained that the industry continued to work predominantly with paper for proof of deliveries and invoices, lengthening payment cycles and reducing efficiency.
Another Mexico-centric issue is the movement of goods to and from its ports. Mexico City, the biggest city in the country by far, suffers from being too distant from the coast, with the nearest ports roughly 600 miles away. Reyes noted that this is in marked contrast from countries in Europe or the U.S., where big cities are generally closer to ports.
For Sendengo, it was about gauging market needs and developing a solution that responded to these and other industry challenges.
"We have a mobile app for the carriers, where they can monitor their fleet. We've digitalized all the onboarding and development processes. They can decide which truck and driver will go and pick up the load, and the shipper also has full visibility into these decisions. This way, we can ensure the security of the cargo," Garcia said.
Today, the company primarily serves transnational companies that make roughly 2,000 shipments a month.
"We work with them because they are the ones that have spot requirements and generally ask for the highest standards of security and quality, on-time shipping, and several such KPIs," Reyes said. "We have around 20 big customers now. This year, we are going to run a new solution in the market for small and medium enterprises as we see huge scope there."
Miguel Angel Salazar, CTO of Sendengo, pointed out that in a pool of over 5,000 carriers that have signed up on Sendengo, only about 300 were actively hauling loads with the big shippers. This is primarily due to the high standards on safety and visibility set by large shippers — a requirement that is often hard for small carriers to match. Salazar hoped that Sendengo's new application will help small carriers tackle these requirements.
For most of the smaller players in the trucking market, digitalization can be a major headache. Garcia explained, however, that only when businesses digitalize operations can they make them scalable.
"Over the last couple of years, we've managed to optimize internal processes of the carriers registered on our platform. We are closing our Series A round of funding and are currently the market leaders in the digital freight brokerage space in Mexico," he said. "We expect to continue our growth like last year. Our priority is to improve logistics processing across Mexico by getting rid of physical papers and also look at digitalizing reverse logistics like in the U.S. and Europe."
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