Dive Brief:
- Cargomatic, a two-year old trucking technology startup whose key product is a mobile load board connecting shippers with short-haul drivers, has only 60 days of operating capital, DC Velocity reports.
- Slow pickup of the firm's app reportedly forced the firm into the long-haul brokerage market, an already crowded space full of experienced competitors. DC Velocity suggests the move intensified Cargomatic's financial woes.
- The company has suffered management shake-ups this year: the startup's CFO and COO recently resigned, and the firm is still without a chief executive after a co-founder was forcefully demoted by investors last year.
Dive Insight:
Cargomatic is one of at least 27 companies hoping to disrupt the traditional freight-brokering market through technology, the Wall Street Journal reports. The company's business model sought to digitize the load board for short haul drivers around major ports, allowing drivers to fill loads from a variety of sources through a mobile app.
However, despite the buzz generated around Cargomatic and similar "Uber for Trucking" startups, the market has yet to be transformed by the offerings. DC Velocity claims the slow pick up may be due to the sensitive nature of freight, which leads shippers to prefer established relationships with 3PLs over independent contractors. Cold chain shippers, for example, are less likely to place goods on a load board.
