Matchmakers

Why OnTruck Isn’t The “Uber For Trucks”

Iñigo Juantegui, co-founder of OnTruck, tends to hear the word “Uber” a lot. As the head of a platform that connects short haul truckers to shippers in Spain and increasingly across Europe, he knows that “Uber for Trucking” is the natural comparison.

Still, he told David Evans, economist and author of the book, Matchmakers: The Economics of Multisided Platform, in a recent The Matchmaker Is In episode, it isn’t his favorite comparison in the world.

“I don’t like it that much. I don’t think Uber is who we want to be compared to,” saying that technically, Uber is already Uber for trucks (referring to Uber Freight for long haul trucking).

Most importantly, however, is the fact that the problems one has to solve on a ridesharing platform when matching supply and demand are a good deal less complicated than the issues one must deal with when matching freight to a short haul shipper.

“The basic problem we face,” Juantegui told Evans, “is although every human can hop into any given taxi (or Uber), not all cargo fits in all trucks. Once we’ve sorted that out, the next big challenge is scheduling because of the interconnectedness of the system. If there is traffic in one city or a pickup or delivery issue in one location, it can ripple through the entire schedule.”

Solving that problem — and finding progressively better ways to solve it — is well worth that challenge, Juantegui said, because in just the short 18 months OnTruck’s been in the market, it has become very clear that connecting supply and demand for short haul runs is a problem that has been calling out for a solution for a long time.

“Right now, there is a lot of intermediation in a market that is very segmented, fragmented and doesn’t offer a lot of good ways to connect. That is what we do — connect shipper and carriers through an easy app interface.”

Shippers, through the OnTruck platform, can post jobs. OnTruck then quotes them a price. If they like it, they accept it, and the job is sent out to carriers. First one to accept wins the bid.

So how did they step into a niche that had somehow gone unfilled — and what’s next?

Making Better Connections for Small Shippers

The shipping companies that OnTruck works with are smaller, independent proprietorships with one to five trucks total. In their early days of building out the platform a year and half ago, Juantegui found that aggregating the supply of small independent truckers to cover the last leg of the value chain that OnTruck targets was a priority. That was one thing, Juantegui said, that went more smoothly than expected.

“It was surprisingly easy to get supply at the beginning, which made me super happy.”

Once OnTruck had a stable of 150 trucks to choose from, they began ramping up their demand efforts with marketing, emails and (most effectively) good old-fashioned cold calls. That, Juantegui noted, also went fairly smoothly.

“Once we started seeing demand, we saw a lot of repeating demand, and we saw the company really start to explode,” Juantegui recounted.

All really great until OnTruck hit one of the typical platform speed bumps — the demand for OnTruck was quickly outpacing the supply of drivers and carriers.

That exposed a bigger need in the market than the OnTruck team had planned for — the degree to which the larger-scale shipping and shipping logistics firms and local carriers viewed them as a collaborator and a partner and not a competitor.  The large-scale shippers that are very good at transporting something from Hong Kong to Madrid also needed a supplier to get the goods that last 50 or 100 kilometers. And those smaller, more localized services work regionally, so they weren’t the competitors he thought they might be — or perceived them to be.

What that told Juantegui and the team at OnTruck is that there was a ton of demand, but matching supply to it was going to be tricky, particularly for those looking for late-in-the-day, same-day delivery.

“If you don’t send the trucking companies shipments, truckers go elsewhere. Early morning shipments are easy to get fulfilled. But as the day passes, it gets harder — and by the end of the day, it is impossible to find a truck that is available.”

To fill the need that the market so clearly had, OnTruck has had to think differently about how its platform matches supply and demand — and to get ambitious about what its tech can do in the future.

The Changing Paradigm

OnTruck today is working differently with its suppliers.

“We find we can pay for availability so that the companies will accept a lower rate for a guaranteed day or week of capacity as opposed to doing it on a shipment-by-shipment basis,” Juantegui explained.

The broader goal, he said, is to make sure that there is capacity to spare — and that the system is ideally optimized.

“Most of our orders are pick-up tomorrow, so we have some time to do the routing properly and efficiently,” Juantegui said, “but optimizing a schedule in shipping is tough because there are always unexpected issues. The big difference for us and our platform stakeholders will be when they can do this level of optimization for same-day shipments.”

Because like most startups, OnTruck is focused on growing, and as their service gets bigger, the need for ever better optimization becomes clearer.

Growth, he noted, has become paramount, as their recent launch in London has demonstrated — more cities in the shipping business often means exponentially increased opportunities.

“Every new hub that you open increases our lifetime value from that client,  because our clients operate in more than one city.”

It’s a lot of work. But Juantegui likes hard work — he started his first business (a food delivery platform) when he was 24 and successfully sold it off a few years later. He made it about two weeks into retirement before becoming desperate to be back at work.

Optimizing delivery routes for short hauls in real time will not be a simple endeavor — and building it into a worldwide operation will also be challenging.  Juantegui likely has a lot of time before he has to worry about being bored again.

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