South African startup EmptyTrips has launched an open marketplace paired with smart algorithms to better match demand and supply of cargo transport.
Launched in April, EmptyTrips uses smart-mapped spaces to reduce wastage on moving vehicles to offer cost-savings.
“These lower transport costs, reduces the barriers to entry of products across Africa, and inflation linked increases for consumers,” Benji Coetzee, co-founder and chief executive officer (CEO) of the startup, told Disrupt Africa.
“Furthermore, reduced number of vehicles are needed due to better utilisation, leading to lower congestion, which as such is better for the environment.”
EmptyTrips is also bringing transparency to the cargo space, with an online bidding portal for logistical shipments, and aims to assist with the delivery of aid to places where it is needed, for less.
“We are proving that new business models and innovative thinking can connect Africa and enable growth, assuring the investment community that we are moving Africa forward, smartly,” Coetzee said.
Coetzee had the idea for EmptyTrips in 2015, and officially launched the platform in April after two years of development. Uptake has been swift, with more than 40 transporters and 60 shippers registered within the first month, and signups growing by 12 per cent week-on-week.
“As this is a new technology and model, we are earning the trust and educating the market. We have received very positive feedback from the market and have strategically partnered ourselves in the industry. We have a strategic alliance with Hollard Insurance Company to develop the model and support scaling it into countries where they have a geographic footprint,” said Coetzee.
Deloitte has also identified EmptyTrips as a smart disruptive model within its technology commercialisation practice in Africa, and will be working with the startup in its development. Coetzee said he believed the transport industry has been lagging behind other industries in terms of their technology and innovative flair, something which needed to be put right.
“The logistics industry is also fragmented and suffers from underutilised assets, and it is said that between 30 per cent and 40 per cent of vehicles return empty. This is economic space that could be used, so we spotted this gap in the market and are now filling empty spaces using technology and online bidding,” he said.
The company is self-funded thus far, but in the process of raising funding to scale and replicate its model globally.
“We will not stay local, we are thinking global,” Coetzee said.
EmptyTrips currently operates in South Africa, as well as across the Southern Africa Development Community (SADC) region, but is already thinking about moving further afield.
“We are already in talks with Hollard and Grindrod to follow their geographical footprint into other countries to make it not only an African platform, but a global trip exchange,” Coetzee said.
“We also aim to partner with SOE Transnet on supporting industry growth and we want to have a joint venture with the World Food Programme on a pilot to move aid into African countries. Big things will come as we are determined.”
It is free for users to signup for EmptyTrips, but upon success of a trip matching the platform charges a set service fee that is shared between the transporter and shipper. It successfully completed a trip in its first month, which Coetzee said was not expected, and is aiming to break even within one year.
“Our cash-burn is low due to the model setup, but we are looking to grow the sales team. Based on our assumptions of securing between 0.5 per cent and 2.5 per cent of the market in the first five years, our revenues will be north of US$22 million per year for South Africa only.”
One major challenge is the fact the logistics industry is very traditional, meaning introducing technology into it is not without its difficulties.
“The key challenge we are expecting to face is that of educating people who have been in the industry for decades and to convince them that the technology will assist them with reducing space wastage,” Coetzee said.
“Most people in this industry don’t even have an email address, and this is a challenge on its own! But we remain committed as we know this is the way of the future. Now we have first-mover advantage. We have come this far, and we will keep on pioneering.”