Dive Brief:
- Maergo has ceased operations and is no longer providing parcel delivery services, software provider EasyPost, which gave shippers access to the carrier, said in a July 25 carrier update.
- Maergo previously utilized existing carrier capacity to deliver parcels across the U.S. in one to three days. It had partnerships with all major U.S. passenger airlines for middle-mile package transport, along with last-mile partners, according to an archived version of the company's website.
- Executives for Maergo, including CEO Mark Lavelle, did not respond to requests for comment ahead of publication. The delivery company's website and LinkedIn page are no longer active. Additionally, Shippo, another shipping software provider, said it removed the company from its list of supported carriers earlier this month.
Dive Insight:
Maergo, formerly known as X Delivery, experienced rapid growth in the thick of the COVID-19 pandemic as shippers scrambled for capacity to meet heightened home shipping demand. In November 2021, it reported surging revenues and a growing employee base.
The next year, it closed a $20 million funding round, with Ryder’s venture capital arm as one of the investors. When the company announced the funding, it had delivered more than 8 million shipments and counted Saks Fifth Avenue, Allbirds and Chubbies among its customers.
"With the growth of ecommerce and resulting capacity constraints, shippers are looking for more flexible parcel solutions," Karen Jones, Ryder's chief marketing officer and head of new product development, said in 2022. "Through Maergo's tech-first approach to parcel delivery, they're leveraging existing capacity to offer an end-to-end solution."
Parcel delivery market conditions have shifted since then, as a more cautious investment environment, a slowdown in volume growth and large carriers' discounting activity are straining some startups. Same-day delivery company Point Pickup ceased operations earlier this year before Delivered acquired its assets.
Former Maergo employees said aggressive pricing from major carriers challenged the company.
Maergo specifically struggled to compete with "bare bones" FedEx and UPS rates and convince retailers that its two-day and three-day shipping speeds were worth it, Sandy Gregory, Maergo's vice president of logistics, said on LinkedIn last week.
"That was the downfall of Maergo," Gregory said. "We were able to differentiate our service. Our existing clients loved us. We had an amazing product. Getting buy-in from retailers for a name they have never heard, that was tough."
Kevin Noto, Maergo’s head of product and product operations, echoed that sentiment in his own LinkedIn post, saying current shipping market conditions were too much for the young company to overcome.
“In a different economic climate, we could have achieved great things, but our model was not designed for the low-cost, slower shipping options shippers are currently leaning towards,” Noto said.
