Periodic Reporting for period 1 - CargoList (Freight Auction, reinvented)
Reporting period: 2016-01-01 to 2016-06-30
Although Road Freight Transport industry plays a central role for European Economy accounting for more than 70% of all inland freight transport, it is very inefficient! According to Eurostat, the overall efficiency of Road Freight Transport is only 43%, with freight vehicles in the EU driving in average 24% of km completely empty. Moreover, when they are not driving empty, trucks are (in average) loaded at only 57% of their capacity.
To change this and improve the load factors for trucks, CargoList has introduced a real time auctioning platform for the Road Freight Transport Industry, where transport providers and transport clients trade shipping requests and offers.
The company is focusing on 2 main objectives:
1) Increase the level of capacity usage by introducing modern information and communication technology (auctioning system, messaging system, feedback and rating system, price suggestion algorithms, centralised dispatch and a GPS-enabled continuous freight search system.)
2) Enhance the business climate by introducing specialised financial services, custom designed for the freight industry needs. (Online payment processor, Payment guarantee and quick payment option by corporate credit offered through an external partner)
These 2 problems are the root cause of the most important inefficiencies in this very big industry, thus solving them represents a tremendous opportunity for the company, as well as for the industry itself.
To change this and improve the load factors for trucks, CargoList has introduced a real time auctioning platform for the Road Freight Transport Industry, where transport providers and transport clients trade shipping requests and offers.
The company is focusing on 2 main objectives:
1) Increase the level of capacity usage by introducing modern information and communication technology (auctioning system, messaging system, feedback and rating system, price suggestion algorithms, centralised dispatch and a GPS-enabled continuous freight search system.)
2) Enhance the business climate by introducing specialised financial services, custom designed for the freight industry needs. (Online payment processor, Payment guarantee and quick payment option by corporate credit offered through an external partner)
These 2 problems are the root cause of the most important inefficiencies in this very big industry, thus solving them represents a tremendous opportunity for the company, as well as for the industry itself.
Caroglist deployed live its auctioning and freight searching technology, in a closed Alpha Test which included 17 transport clients (regarded as market creators) and 312 transport providers. A total of 2138 transport orders were processed.
The functional assessment confirmed that the functionalities introduced have a significant impact, increasing the level of capacity usage by up to 37%.
The Economics assessment suggested an adjustment in the business model is appropriate, as the A/B Testing showed that clients would prefer to have a centralized dispatching system and algorithms for automatic price adjustment, based on the demand of trucks on a specific route, rather than using just a market place where companies have to negotiate themselves the price.
Moreover, A/B Testing was employed to study in a comparative approach the impact of the GPS-enabled Continuous Freight-Capacity Matching system, that proved to dramatically increase the productivity in the sector of small parcels that are shipped for distances of over 450 km, and also for shipments over short distances, lover than 100 km.
Based on the results of processed Alpha Tests data, partnership negotiations were made with the market creators participating in the study, and IP was enhanced through copyright and trademark applications.
The functional assessment confirmed that the functionalities introduced have a significant impact, increasing the level of capacity usage by up to 37%.
The Economics assessment suggested an adjustment in the business model is appropriate, as the A/B Testing showed that clients would prefer to have a centralized dispatching system and algorithms for automatic price adjustment, based on the demand of trucks on a specific route, rather than using just a market place where companies have to negotiate themselves the price.
Moreover, A/B Testing was employed to study in a comparative approach the impact of the GPS-enabled Continuous Freight-Capacity Matching system, that proved to dramatically increase the productivity in the sector of small parcels that are shipped for distances of over 450 km, and also for shipments over short distances, lover than 100 km.
Based on the results of processed Alpha Tests data, partnership negotiations were made with the market creators participating in the study, and IP was enhanced through copyright and trademark applications.
The feasibility study confirmed the initially expected impact on the industry, with the level of capacity usage increasing by up to 37%.
Moreover, we adjusted the business model offering a smart combination UBER-style functionalities and freight exchange functionalities, in such a way that different transport clients can publish their transport request on the platform, by themselves, but the price will be set by our automatically adjusting algorithm.
Based on the feasibility tests, this upgrade in the business model is expected to increase the impact of the project even more, creating more jobs and more revenue, as it attracts companies that don’t use traditional freight exchanges and usually drive empty for the “return trips”.
Moreover, we adjusted the business model offering a smart combination UBER-style functionalities and freight exchange functionalities, in such a way that different transport clients can publish their transport request on the platform, by themselves, but the price will be set by our automatically adjusting algorithm.
Based on the feasibility tests, this upgrade in the business model is expected to increase the impact of the project even more, creating more jobs and more revenue, as it attracts companies that don’t use traditional freight exchanges and usually drive empty for the “return trips”.