South Africa’s EmptyTrips, an open marketplace paired with smart algorithms to match demand and supply of cargo transport is using smart-mapped spaces to reduce wastage on moving vehicles to offer cost-savings and lower transport costs hence reducing the barriers to entry of products across Africa.
Speaking to TechMoran, Benji Coetzee, Founder and CEO EmptyTrips said, “Proving new business models and innovative thinking can connect Africa and enable growth assures the investment community that we are moving Africa forward, smartly. Ultimately, we aim to reduce the number of empty vehicles due to better utilization, leading to lower congestion, and as such, is better for the environment.”
According to Benji the inspiration to start EmptyTrips came to her approximately 2 years ago when she was on route to Johannesburg from Durban and passed many empty trucks and rail wagons.
She recognized the irony of his consulting clients’ complaints of expensive transport costs absorbing margins. Applying economic theory it simply didn’t make sense; excess supply leads to lower prices? So the idea of matching demand and supply for transport to create an equilibrium price would be more fair…she thought.
That is when she decided that something needed to be done, a smart market for transport was needed and technology held the key. Benji and Herman Strauss, the CTO committed time, effort, funds and agility to develop what EmptyTrips now offers.
“By closing the gap, this simple, yet practical innovation would change the face of an old and traditional industry, by filling empty spaces to places for less it enables sustainable growth of sectors and reduces the impact on the environment,” Benji told TechMoran.
The South African freight industry is estimated around R500bn (USD38bn) per annum, growing at ~6,6% year on year. Within this industry, a major issue of high capital costs, low yields and reality of 30-40% inefficiency in the form of empty return legs (i.e. vehicles returning empty) is what EmptyTrips is tackling. By using smart-mapped spaces it aims to reduces wastage on moving vehicles to offer cost-savings. It also encourages competitive transparency in the industry with its online bidding portal for logistical shipments and aim to support delivery of aid to places where needed for less. These lower transport costs, reduces the barriers to entry of products across Africa (enabling trade), and lowers inflation linked increases for consumers in every-day products.
“We aim to go global, where the logistics industry is estimated at + USD 8,1 trillion, a very large opportunity given that we can replicate and scale our solution,” Benji told TechMoran.
EmptyTrips also created one of the first digital cargo insurance products of its kind, which it aims to white-label and make available with or without purchasing cargo transport via EmptyTrips. Insurance is offered to the cargo owner and is underwritten by Hollard insurance, with it has a strategic alliance. The global cargo / marine insurance industry is estimated at USD33bn in premiums per annum.
Furthermore, logistics is one of the largest contributors to carbon emissions Benji says adding that the firm aims to reduce the number of vehicles that are needed for transport reducing empty return legs with economic goods providing better asset utilization, leading to lower congestions, and as such, is better for the environment.
EmptyTrips use an open marketplace paired with smart algorithms to better match demand and supply of cargo transport. It’s self-developed algorithms match the route of the transport with geo-mapping, the size of the decks-space and the date (with flexibility) creating multiple if-functions to find matches at cost.
Benji thanks the government for doing what it has done for hard infrastructure but says its now time to look into soft infra.
“Often the exponential impact and potential that technology holds for public sector and society is undermined,” Benji told TechMoran. “Government often believes “tech and innovation” is for private sector, and the bureaucracies of institutions are just not conducive for a start-up that needs agility, quick decision making and timely debtor payments.”
Benji adds that if they had the opportunity to assist Transnet for example with their road to rail strategy, a small investment into its tech could support a cargo shift, which will lower road maintenance burdens on the tax budget and validate Transnet’s expenditure on South Africa’s extensive rail network.
It’s rather sad that EmptyTrips had to travel to Dubai to engage with funding and investors, when its government should be supporting more strategically.
EmptyTrip’s target customers include corporates that have cargo to move (e.g. mines, farms, manufacturing, fertilizer etc), transport companies and logistical service providers, procurement divisions of governments, aid organistions, SME’s and Entrepreneurs trying to get their goods to market competitively and consumers to fulfil their transport requirements between countries.
EmptyTrips is free to sign-up, however, upon successful trip matching or bidding it charges a set service fee that is shared between the transporter and shipper. Everything is paid securely online with Payfast It also offers cargo insurance online, where it earns a referral fee, this is underwritten by Hollard insurance. In future it plans on providing big data insights on cargo movements, volumes and incidents. Ideally patterning with a tracking and telematics company.
Though security risks or loss involved in cargo transportation especially high value goods is an age-old problem, EmptyTrips shippers can opt-in to insure certain cargo types instantly upto R1,5m , underwritten by Hollard Insurance (strategic alliance). As it is for the cargo owner to insure is interest, this will protect them against fire, theft, hijack and overturning.
Secondly, the firm requires each transporter to complete a short questionnaire to calculate their “star rating”, where minimum acceptance criteria apply and verify the company details. Shippers are able to rate the transporter after a trip and a rule of “three strikes and you out” applies.
Lastly, it also aims to integrate automatic insurance claim history “checks” to a large insurance company database (this is under discussion).
Some of EmptyTrips competition include Freightos, Loadfox, Uber Freight, Freighthub but EmptyTrips is Africa’s first, and not only focuses on land transport, but also rail, air and sea. It’s technology algorithmic matching and smart positioning with anonymous bidding assist transparency and reduces potential collusion or preferred user abuse.
Benji concurs that the logistics industry in Africa is very old and traditional, and the key challenge its 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.
Most people in this industry don’t even have an email address, and that’s a challenge on its’s own but he adds that the firm will remain committed as it has first-mover advantage and will keep on pioneering
As a start-up company EmptyTrips would like to align itself with competitions that offer it great exposure, network and support on a global scale. “Seedstars will open doors for us to be recognized as a tech company that is bringing about much needed change in the economy,” Benji told TechMoran. “We want to be seen as a local South African brand, that has taken the “world” by storm. Transporters recovering costs, shippers paying less, and the economy growing. We want to be seen as the star team that provides a simple solution to Move Africa for less, and Seedstars is providing that platform.”