Last-Mile Deliveries Accessible to New E-Commerce AdoptersBy Andrea Villar | Thu, 12/10/2020 - 05:00
Q: What is Cargamos’ business model and how does it work?
A: Cargamos is a logistics platform that aims to shorten the distance between e-commerce brands and the end customer. It works with urban last-mile warehouses. Our mission is to be able to connect the digital world with the street around your house. An essential point that was missing was that there was no connection between the brands and the last-mile networks that were on the streets, like motorbikes, cars and the collaborative economy network that already exists. Something was needed to bridge this gap. Cargamos does this with digitally prepared warehouses to ensure fast deliveries. Another problem we noticed was that brands' warehouses were not prepared to deliver packages to players in the collaboration economy. That is why we established on-demand warehouses at strategic urban areas. We participate in the supermarket, fashion and technology industries.
Our goal is to be as close as possible to the end-user and we have found opportunities to use unoccupied space at companies’ offices, parking lots and shopping centers to accomplish this. There are already many companies that focus on optimizing these spaces. Cargamos does the same. It seeks to make the dead spaces in shopping centers, car parks or warehouses profitable through alliances with the owners.
Q: You say your distribution centers are digitally prepared. What do you mean by this?
A: When a huge company has sales through e-commerce, it faces big challenges. Although it has warehouses available, these are usually on the outskirts of cities. This complicates logistics because if this company wants to make same-day deliveries, it has to connect with different players in the city. Warehouses are prepared to make only one large delivery to shipping companies and not several during the day. If suddenly 300 or 500 small vehicles started arriving to pick up small packages, warehouses would collapse as their processes and software is very complex.
What we do is provide them with digitally prepared warehouses, meaning that we connect with both last-mile companies and the brands that need to use these resources and spaces to deliver quickly. We have the software, the established processes and a special layout to turn those small locations into dispatch centers. Once a vehicle arrives for a package, riders have it in their hands in less than 3 minutes. This is known as the automated trade match, which is one of the missing links in logistics today.
Q: What sets Cargamos apart from other companies in the last-mile logistics industry?
A: We do not know of any companies that do anything like this. We know companies that have motorbikes or vehicles to make last-mile deliveries and we also know large companies in the game but we do not compete with either. Cargamos stands between both and acts as a bonding agent. We organize and prepare ourselves to handle the entire volume of orders and we distribute it among last-mile delivery companies. In Latin America, where last-mile logistics are not as developed as in other regions, there is no one else like us.
Our strategic focus is on products distributed directly to a customer or retail chain with no storage time. Companies get the packages ready to be sent and we collect them from their warehouses, take them to ours, distribute them through micro-warehouses in the city and then send them through last-mile companies.
Q: How do you assess your clients’ needs to develop more focused or customized solutions?
A: We assess needs by industry. By grouping our clients by industry, we are able to visualize their needs on a large scale. We can make deliveries in 15-25 minutes because we have the product ready no more than 1-2km away from the end consumer.
Q: How do you adapt to different company budgets?
A: The focus of our company is on medium and large companies. We do not yet serve individual users as our business is focused on large volumes. This does not mean that a small company that wants to deliver a certain number of products cannot do so through us. We have the capacity but they are not our main focus.
Q: What are the biggest challenges the last-mile industry has faced in recent months?
A: The pandemic took all industries by surprise. Companies had to leave their comfort zone to cope with this new reality in a few weeks. Overnight, most of their clients migrated to the digital world and that demanded better logistics. Some did not know how to react, some closed operations, others opened and others changed. Having to adapt to different models was a great challenge.
Q: Are companies venturing into e-commerce aware of the logistics challenges?
A: When we used to discuss logistics, we used to sit down and talk to the director of the company's logistics department. Today, however, it is the marketing director who cares the most. Logistics is seen as a competitive advantage among companies. Users used to have eight- to 10-day delivery expectations but new players in the market are changing the rules by offering same-day deliveries. The challenge now is to push every company to adopt this. More than a business model, it is a value proposition that today's customer expects. The change can be radical and require significant transformation in times and processes. Cargamos’ solution can help to make this transition easier.
Cargamos is a last-mile cargo and delivery service platform launched in November 2019 that links companies with delivery service providers