Descartes System Group, a Canadian logistics company with global reach, has acquired ShipRush, a Seattle-based shipping company that connects small- and medium-sized businesses (SMBs) with delivery carriers across the U.S., for $14 million.
Descartes is a logistics technology platform provider — that is, it offers software solutions that help large companies handle such functions as inter-routing and scheduling to private vehicle fleet management to duty, tariff, customs and security solutions for cross-border commerce. Its focus is on transportation and logistics, and that’s where ShipRush comes in.
ShipRush is a general purpose multi-carrier shipping system for small- to medium-sized companies and offices that make five to 1,500 shipments a day (around 500 is their “sweet spot”). Its network of providers ensures that ShipRush customers get the best deal and fastest delivery time from a variety of eCommerce shopping carts, including Shopify, Magento eBay, and, yes, even Amazon.
Shipping is a huge slice of the pie in retail, and that’s true from eCommerce giants like Amazon all the way down to little startups. But whereas Amazon can, and does, take a hit on shipping costs, such a hit could cripple a small- to medium-sized business that’s just trying to get off the ground.
Through its relationships with shipment operations such as FedEx and the U.S. Postal Service, ShipRush provides real-time, side-by-side carrier rate and delivery date comparisons, shipment tracking, bulk label printing, low-cost declared value coverage and discount postage for those SMBs. Streamlining supply chains and reducing transportation costs can make or break the little guys in a very big way.
ShipRush’s tools, such as the ability to create shipping labels automatically from emails that contain an address and elements of its tech stack, could be deployed anywhere in the world. But the company’s focus is on shipments with U.S. origination.
“The partnership unlocks a lot of things for ShipRush,” said Rafael Zimberoff, the company’s founder. “The global orientation of Descartes is a big boost to ShipRush because, while our solution is in use by a small number of shippers in Europe and in India, we don’t have go-to-market resources in those regions.”
Even for domestic users of ShipRush, the benefits of the acquisition are clear: As their business grows, and as they, perhaps, find customers in other countries who want to buy their retail products, Descartes can provide that through the shipments and delivery platform those businesses are already using.
As small companies grow into medium companies and then into large ones, their warehouses grow larger and more complicated. They may need specific picking and packing solutions — in short, they may need new logistics solutions. Enter Descartes.
So what’s Descartes getting out of the deal?
If ShipRush is growing broader through the partnership, then Descartes is growing deeper.
“The carrier relationships and the kinds of licensing arrangements that ShipRush has are really quite unique in the ecosystem that ShipRush operates in,” Zimberoff said. “We’ll see how we can bring those to benefit the larger Descartes organization.”
Mavi Silveira, Descartes’ vice president of global marketing, said the businesses complement each other perfectly.
“We’re all feeling the effects of eCommerce as it pervades both business-to-consumer — and now, in a major way, business-to-business — textures, where a lot of the change and the dynamics and the driving factor and opportunity for revenue and market share is really in the small- to medium-sized space,” Silveira said.
The ShipRush team has “a very significant presence and an excellent solution and a great footprint for small- to medium-business parcel shipping that rounds out our enterprise cost systems for larger organizations,” Silveira said. “We get market share and footprint and some great domain experts in the space, and on the other hand, the ShipRush family gets access to greater resources, global reach, we can leverage our partner relationships and volumes a little bit more, so it’s a really great combination.”
Descartes Systems Group was founded in 1985 and went public in the mid-1990s. It was one of the first logistics companies to move to the cloud, with a solution stack built natively to be Software-as-a-Service.
“A lot of other players are just starting to make that move,” Silveira says. “We’re really focused on innovation.”
ShipRush is published by Z-Firm LLC, which started in 1992. ShipRush was born in 2000 and hit the market a year later. In fall 2016, the company decided it was time to become part of a larger organization. It found Descartes fairly early in the search process.
“We’ve always seen ourselves as a tool maker,” Zimberoff said. “We make a hammer, and we’re looking for the largest arm around to swing that hammer.”