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Deliveree is smoothing Southeast Asia’s bumpy logistics landscape – TechCrunch

Logistics in large parts of Southeast Asia is not only complicated, but also expensive. recipient wants to solve this problem with a platform that not only lets customers book trucks, but also uses algorithms to determine the best route based on location, truck loads and even the weather. The company announced today that it has raised a $70 million Series C led by Gobi Partners and SPIL Ventures with participation from returning investor Inspire Ventures. This brings the company’s total since its inception in 2015 to $109 million.

The high logistics costs mean consumers end up paying higher prices, said founder and CEO Tom Kim. “From our point of view the market is number one, the inefficiency in trucking and freight transport has driven up costs significantly. Imagine you are in California, Los Angeles, and you are shopping for a pair of Nike shoes. What proportion of these sales costs is spent on logistics, transport and warehousing? The answer is very well documented. It’s about 8%. If you buy the same Nike shoes in China, the answer is around 15%. And if you buy the same Nike shoes in Indonesia, Thailand or the Philippines, the answer is much closer to 25%, maybe even over 30%.”

The company says it has grown its gross transaction value by 3.2 times over the past 24 months and will surpass $100 million this year. It currently has 500 employees and 100,000 drivers on its platform.

Deliveree is currently available in Indonesia, the Philippines and Thailand. It mainly focuses on large trucks that move trade goods or large items. Kim said it is more searched than other logistics companies, according to Google Analytics. These include goods sixGo Box, Kargo Tech and Logical in Indonesia; Mober, Inteluck and TheLorry in the Philippines; and Giztik, TheLorry and Ezyhaul in Thailand.

Kim added that the logistics war is particularly heated in Indonesia, where many logistics startups like Waresix have received funding.

“There’s a lot of startups and breakthrough technology being built in space here, and it’s definitely a very active market,” he told TechCrunch. “There are all these well-known players like Waresix or even Kargo Tech. The Philippines and Thailand are also interesting and great markets, but there are fewer players in the logistics space, especially freight, truck and freight.”

One of the problems Deliveree solves is the inefficient use of trucks. For example, trucks deliver a load of goods but then return empty to the warehouses. However, if it’s part of Deliveree’s system, businesses can book it to ship goods on the return journey. This makes better use of the money spent on fuel, time and dispatch teams.

“In Thailand, the Philippines and Indonesia, there’s an insane amount of empty trucks driving around because everyone has their own corporate fleets,” Kim said. “They only deliver in one direction and the truck comes back empty. This even applies to long-distance shipping, when you’re sending goods from a warehouse to a facility in another city. Same thing happens: you send the truck full one way and it comes back, sometimes hundreds of miles, empty.”

Deliveree solves these problems with a dynamic marketplace that Kim says currently has tens of thousands of customers and suppliers, including a combination of independent drivers and trucking companies. The marketplace’s technology combined with its volume can identify customers on a truck’s journey in both directions, so it rarely runs empty. The marketplace aggregates demand and determines optimal routes to keep trucks full. Kim said that prior to Deliveree’s launch, a usage rate of 40% to 50% was considered above average. However, with Deliveree’s marketplace, trucks can achieve up to 80% utilization thanks to Deliveree’s internally generated dataset, which has been in the works for five years.

“Even though it’s far from perfect, it’s getting smarter every day because we make thousands of bookings every day, and it’s able to make more accurate predictions about the length of the booking, the day of the week, the time of day, and even the weather. Those are all things that have drastic long-term implications,” Kim said.

This also means that the warehouse has shorter queues as Deliveree’s algorithms can predict loading and waiting times.

Most companies have their own fleets, which means they need to hire dispatch teams, admin teams, security teams, parking lots, and security guards. It’s still the most prominent way, Kim said, and involves a lot of overhead for the companies. Kim said his argument in introducing Deliveree to companies was that they could deleverage their balance sheets and book trucks on an asset-light basis. That means they only pay for trucks when they need them. When the pandemic struck, many companies saw their revenue decline, and Kim said that led to greater adoption of Deliveree as they attempted to increase revenue. This growing adoption of Deliveree as more businesses looked for ways to save money and turn their fixed costs into variable costs.

The courier monetizes by charging the customer a fee and splitting it with the carriers. The standard supplier ratio is 80% to the independent truck driver or trucking company and a 20% commission to the company.

In a prepared statement, Kay Mok, Managing Director of Gobi Partners, said: “Post-pandemic, we are moving into an inflationary environment plagued by supply chain issues. Deliveree has built the best technology platform for customers, enabling them to optimize and reduce the total cost of ownership for the logistics and shipping company.”

Deliveree is smoothing Southeast Asia’s bumpy logistics landscape – TechCrunch Source link Deliveree is smoothing Southeast Asia’s bumpy logistics landscape – TechCrunch

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